Ahmedabad, 30 September - In a significant decision that may resonate across rural Gujarat, the High Court has set aside a 2007 decree which had directed two brothers to execute a sale deed for over 18 vighas of farmland in Abrama village, Navsari district. Justice Hemant M. Prachchhak pronounced the order on Monday, criticising the lower court for “erroneously treating a money lending arrangement as a sale agreement.”
Background
The dispute began back in 1999 when Natubhai Dhirubhai Naik and his brother borrowed ₹3.5 lakh from Alkeshbhai Kashiram Patel and his father. According to Patel, the brothers agreed to sell their agricultural land - Block No. 2409, measuring 4 hectares 17 ares 84 sq.mtrs. - for ₹9 lakh. He claimed to have paid ₹5.4 lakh and said possession of the land was handed over. The remaining ₹3.59 lakh, Patel argued, was to clear the bank’s charge on the land, after which the defendants were to execute the sale deed within six months.
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Naik, however, denied any such sale. He alleged that Patel had taken signatures on blank papers under the guise of monetary assistance, and that the “agreement” was actually a loan security. The trial court in Navsari in 2007 accepted Patel’s version and ordered Naik to execute the sale deed.
Court’s Observations
The High Court heard senior advocate Jaal Unwala for the appellants and Chinmay Gandhi for the respondents. During cross-examination, Patel himself admitted the first transaction was a loan with land kept as security, and also conceded that he never actually got possession under any agreement. “Our transaction involved giving money and recovering it with interest,” Patel said in court.
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Justice Prachchhak noted that such admissions “demolish the theory of an outright agreement to sell” and show the plaintiffs were functioning as moneylenders without a valid licence. He pointed out that unregistered agreements dated 1999, 2001, and 2004 could at best be used as evidence but not as the basis for a decree of specific performance.
The bench also remarked that the plaintiffs had not complied with their own obligations, such as paying off bank dues within the stipulated time. Witness Babubhai Jividas, though supportive of Patel, admitted he never saw any possession receipt or bank payment records. “These admissions by the plaintiffs’ own witness corroborate the defendants’ stand,” the judge observed.
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Decision
Holding that the trial court had “gravely erred” in its approach, the High Court quashed the 2007 decree in Special Civil Suit No.3 of 2005. It ruled that the plaintiffs failed to prove readiness and willingness to perform their part of the contract as required under Section 16(c) of the Specific Relief Act.
The order reads: “Present First Appeal is hereby allowed. The impugned judgment and decree … is hereby quashed and set aside. No order as to costs.”
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A request by the respondents’ counsel to stay the order for eight weeks was also rejected, with the judge noting they had been “enjoying the possession of the land for more than 20 years without right.” The case record will now return to the Navsari trial court.
Case: Natubhai Dhirubhai Naik & Anr. v. Alkeshbhai Kashiram Patel & Anr.
Case No.: R/First Appeal No. 2331 of 2008 with connected Civil Applications
Date of Judgment: 29 September 2025