[Cites 6, Cited by 0]
Gujarat High Court
Rajarshee Enterprise vs Sanjay Ambalal Patel on 8 May, 2026
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3152 of 2025
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025
In R/FIRST APPEAL NO. 3152 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA Sd/-
and
HONOURABLE MR.JUSTICE L. S. PIRZADA Sd/-
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Approved for Reporting Yes No
✔
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RAJARSHEE ENTERPRISE & ORS.
Versus
SANJAY AMBALAL PATEL & ORS.
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Appearance:
MR NV GANDHI(1693) for the Appellant(s) No. 1,2,3
MR JAY SNEHAL SHAH(13391) for the Defendant(s) No. 3.1,5,6,7,8
MR SP MAJMUDAR(3456) for the Defendant(s) No. 3.1,5,6,7,8
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE L. S. PIRZADA
Date : 08/05/2026
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE L. S. PIRZADA)
1. Heard learned advocate Mr.N.V. Gandhi for the appellants -
original plaintiffs and learned advocate Mr.S.P. Majmudar with
learned advocate Mr. Jay Snehal Shah for the respondents.
2. The present appeal is preferred by the present appellants -
original plaintiffs under Section 96 of the Code of Civil
Procedure, 1908 (for short, the "Code"), directed against the
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judgment and decree dated 11.10.2024 passed by the learned
20th Additional Senior Civil Judge, Vadodara in Special Civil Suit
No.100 of 2024, allowing an application preferred by defendant
Nos.29/1, 30, 31, 32, 33 and 34 vide Exh. 49 under Order VII Rule
11 of the Code, whereby the learned Trial Court rejected the
plaint under Order VII Rule 11 of the Code.
3. For the sake of there brevity, the parties herein shall be
referred to as per the original status as narrated in the suit.
4. Factual matrix leading to the present appeal are that the
original plaintiffs have filed the Special Civil Suit No.100 of 2024
before the learned Trial Court for cancellation of the sale-deeds
dated 24.02.2023 and 27.03.2023, and also for declaration that
the plaintiffs have pre-emptive rights to purchase the suit land.
4.1. In a nutshell, the case of the plaintiffs before the learned
trial Court is that the Plaintiff No. 1 is a partnership firm, and
Plaintiff Nos. 2 and 3 are its partners. Defendant Nos. 1 to 26 and
their ancestors have executed a memorandum of understanding
and an agreement to sell.
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4.2. It is the case of the plaintiffs that the suit land, which has
been specifically stated in the paragraph No.2 of the plaint, i.e.,
the land situated at village : Gotri, Taluka & District : Vadodara,
bearing Block / Survey No.838 and Khata No.191, admeasuring
9004 sq. meters, in T.P. Scheme No.63, Final Plot No.87, and area
of the FP 6753 sq. meters, i.e., non-agricultural, has been
allotted to the said land. Now, it has been termed as "Suit Land".
4.3. Further, as per the case of the plaintiffs, in the year 1988,
the ancestors of Defendant Nos.1 to 26 have executed an
irrevocable Power of Attorney in favour of Defendant No. 27, viz.
Sanjaybhai Ambalal Patel, and pursuant to this, Power of
Attorney - Sanjaybhai Ambalal Patel entered into an agreement
on 15.06.2006 with Plaintiff No.1-Firm, and the sale consideration
was fixed at Rs.141 per square meter. As per the condition of the
said agreement, 25% amount of the sale consideration, i.e.
Rs.25,51,000/-, was paid to the Power of Attorney holder of
Defendant Nos.1 to 26, and as the suit land was new tenure land,
it was agreed between the parties that the said suit land was to
be converted into old tenure land, and second installment of
25% of the sale consideration was to be paid on 15.08.2006;
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pursuant to which the process regarding conversion of land
would start.
4.4. Subsequently, Defendant No. 27 - Sanjay Ambalal Patel,
entered into an agreement to sell on 02.06.1998 with Defendant
No. 28, Govindbhai Vitthalbhai Patel, and for the suit land,
Defendant No. 28, Govindbhai Vitthalbhai Patel, filed Special Civil
Suit No. 882 of 1998 before the Principal Civil Judge, Vadodara,
for specific performance of the agreement to sell dated
02.06.1998. In the said civil suit, consent terms were filed, and
pursuant thereto, a decree was drawn on 28.08.2002. Pursuant to
this decree, the ancestors of Defendant Nos. 1 to 26 were to
execute a sale deed as per the decree.
4.5. Further, subsequently, one Mr.Indrajitsinh Pratapsinh
Jadeja, a land broker, contacted Plaintiff No. 2, and the original
owner of the suit land, Defendant No. 27, the Power-of-Attorney
holder - Mr. Sanjay Ambalal Patel, and Defendant No. 28,
Govindbhai Vitthalbhai Patel, through his administrator, Ratilal
Manilal Patel and Ambarish Ratilal Patel entered into a deal for
the purchase of the said suit land, and at that time, an amount of
Rs. 2,00,000/- was paid to Shri Indrajitsinh Jadeja as brokerage by
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the plaintiffs, and Defendant Nos. 28 and 29.
4.6. Subsequently, Defendant No.27 - Sanjaybhai Ambalal Patel,
Defendant No. 28 Govindbhai Vitthalbhai Patel, and the
administrator of Defendant No. 28, i.e., Ratilal Patel, accepted Rs.
25,51,000/- from the plaintiffs towards the sale consideration,
and a receipt was issued in favour of the plaintiffs. It was decided
to sell the said suit land to the plaintiffs, and Rs. 25,51,000/- was
accepted on 15.06.2006 by Defendant Nos. 27 to 29 on behalf of
the original owners.
4.7. However, subsequently, the administrator of Govindbhai
Patel, i.e., Ratilal Patel, expired, and thereafter Defendant Nos.
27 to 29.1 and 29.2 were administering the said suit land. The
plaintiffs have frequently called upon the defendants to execute
a sale deed, but they were not ready to execute the same.
4.8. Thereafter, the plaintiffs came to know that Defendant
Nos. 27 to 29.1 and 29.2, in connivance with the original owners,
executed a registered sale deed for the suit land on 24.02.2023 in
favour of Defendant No.30, Rajesh Govindbhai Patel, upon
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receiving a sale consideration of Rs.9,79,20,000/-. Subsequently,
within one month, i.e., on 27.03.2023, the said Rajesh Govindbhai
Patel again sold the suit land by a registered sale deed to
Defendant Nos. 31 to 34 for a sale consideration of Rs. 10 crore.
4.9. Hence, the suit was been filed by the plaintiffs for
declaration and cancellation of the sale deeds dated 24.02.2023
and 27.03.2023. After filing of the suit, notices were issued to the
defendants, and they appeared through their advocate.
Defendant No. 29/1 and Defendant Nos. 30 to 34, vide Exhibit 49,
filed an application under Order VII Rule 11 of the Code to reject
the plaint, mainly on the ground that, as per the plaintiffs' case,
the Power of Attorney holder of the original landowner had
entered into an agreement on 15.06.2006 for the suit land, and
as the suit land was, at the time of execution of the said
agreement, new tenure land, and even in the revenue record it
was specifically mentioned that the said suit land was of
restricted tenure, which was also mentioned in the agreement to
sell as well as in the plaint, as per Section 43 of the Gujarat
Tenancy and Agricultural Lands Act, 1948 (hereinafter referred to
as "the Act of 1948"), there is a specific bar even to enter into
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such an agreement for new tenure land. Hence, mainly on this
ground, the application was preferred to reject the plaint as
being barred by law under the Act of 1948.
5. After hearing rival submission of the parties, the learned
trial court was pleased to allow the application preferred by the
defendants at exhibit 49 and rejected the plaint of the plaintiffs
by judgment and order dated 11.10.2024, and being aggrieved
and dissatisfied by the said judgment and decree of rejection of
the plaint, the present appeal has been preferred.
6. Learned advocate Mr. N.V. Gandhi for the appellants -
plaintiffs submitted that looking to the prayers sought in the
suit, the same pertains to cancellation of two sale deeds
executed by the landowners, in spite of the fact that an
agreement to sell had been executed by the Power of Attorney
holder of the landowner in favour of the defendants. Hence, in
view of the prayers, the plaint could not have been rejected at
the threshold under Order VII Rule 11 of the Code.
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6.1. It is submitted that the impugned order passed by the
learned trial court is contrary to law and the evidence on record
and is, therefore, required to be quashed and set aside.
6.2. It is submitted that the learned trial court has failed to
appreciate that, from the averments made in the plaint, the suit
of the plaintiff is not hit by Section 43 of the Act of 1948, as there
is a specific mention in the agreement itself that necessary
permission is required to be obtained prior to execution of the
sale deed.
6.3. It is submitted that the learned trial court has wrongly
applied the decision of the Larger Bench of this Court in the case
of Deceased Shaikh Ismailbhai Hushainbhai Through Legal
Heirs versus Vankar Ambalal Dhanabhai, reported in 2024 (1)
GLH 222.
6.4. Further, it is submitted that the trial court ought to have
appreciated that the application preferred under Order VII Rule
11 of the Code is not to be considered in a mechanical manner
and requires careful consideration of the pleadings, and hence
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the same is required to be quashed and set aside.
6.5. Further, it is submitted that as per agreement entered into
in favour of the appellant, it was to come into force only after
conversion of the land from new tenure to old tenure, and in
respect of the said new tenure land, a compromise decree has
already been passed by the competent civil court. Therefore, the
judgment of the Larger Bench of this Court with respect to
Section 43 of the Act of 1948 would not be applicable to the
present case.
6.6. Further, it is submitted that the learned trial court has also
failed to appreciate the said fact merely because there are some
discrepancies in the date of execution of the agreement and the
purchase of the stamp paper for the sale agreement to sell, and
the same cannot be a ground to reject the plaint at the threshold,
as it is a trivial issue involved in the suit, which requires a trial.
6.7. Further, it was submitted that learned trial court has
erroneously held that the suit of the plaintiffs based on the
agreement to sell is also barred by the law of limitation, whereas
the learned trial court has failed to appreciate the fact that time
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was not the essence of the contract and that the limitation would
run from the date of NA permission granted by the concerned
authority.
6.8. Considering the scope of Order VII Rule 11 of the Code and
the fact that only trivial issues are involved in the present case,
the learned trial court has not considered the facts properly and
wrongly rejected the plaint under Order VII Rule 11 of the Code.
Hence, the present appeal requires consideration and deserves
to be allowed, and judgment and decree passed by the learned
trial court is required to be quashed and set aside.
7. Learned advocate Mr. S. P. Majmudar with learned advocate
Mr. Jay Shah for the respondents has vehemently opposed the
said appeal and submitted that it is an admitted position that as
per the alleged agreement, it is specifically mentioned that the
suit land is a new tenure land, and considering the decision of
the Larger Bench of this court in case of Deceased Shaikh
Ismailbhai Hushainbhai Through Legal Heirs (supra), the
transaction is hit by Section 43 of the Act of 1948. It has been
clearly held by the Larger Bench that even an agreement to sell
cannot be entered into in respect of new tenure land, as it is hit
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by Section 43 of the Act of 1948. Hence, it is submitted that no
illegality has been committed by the learned trial court and the
present appeal is devoid of merits and is liable to be dismissed.
8. After hearing the submissions made by the learned
advocates for the respective parties, perusing the impugned
Judgment and also perusing the paper book, the following points
come before this Court for consideration:-
(i) Whether appellants prove that
the learned trial court has erred in
coming to the conclusion that
agreement to sale is hit by Section
43 of the Gujarat Tenancy and
Agricultural Lands Act, 1948, and
therefore plaint is to be rejected
under Order VII Rule 11 of the Code
of Civil Procedure, 1908?
(ii) What order?
9. The findings are as under:
1. Negative
2. As per the final order.
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10. So far as the controversy raised before this court is
concerned, the original plaintiffs have filed the suit on the basis
of an agreement of understanding, which has been produced
along with the plaint vide and marked as Exh. 4/1 and they claim
their right pursuant to the said agreement.
11. The said agreement was executed on 15.06.2006 in respect
of the suit land by one Mr. Sanjay Ambalal Patel, acting as the
power of attorney holder of one Ibrahim Mohamadbhai and 129
others.
12. The second party were partners of Rajshree Developers,
namely, Mr. Laxmansinh Sabalsinh Jadeja and Mr.Amit Dan
Rameshkumar Shah. As per the agreement of understanding, the
sale consideration has been fixed at Rs. 141 per sq.ft. and as per
the agreement, 25% of the first installment amounting to
Rs.25,51,000/- was paid. It also appears that the process for
conversion of the said suit land from new tenure to old tenure
was to be initiated and the expenses were to be borne by the
purchaser, the second installment was to be paid on 15.08.2006,
the possession was to be handed over to Rajshree Developers,
title clearance is to be obtained and thereafter, a development
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agreement or agreement to sell was to be executed.
13. Further, it is also stated in the agreement of understanding
that the purchaser has to bear all the expenses for converting
the suit land into old tenure land, and whatever premium was to
be paid, shall be borne by the second party purchaser. Further, all
other expenses incurred for obtaining NA, NOC, stamp duty, and
others shall also to be borne by the second party - proposed
purchaser.
14. Further, a Power of Attorney has been produced along with
the plaint and marked as 4/9. The said Power of Attorney was
executed by the ancestors of defendant Nos. 1 to 26 in favour of
defendant No.27 on 02.06.1998. Upon perusal of this document,
which is an irrevocable general Power of Attorney, it is found
that total seven persons had executed the said Power of
Attorney in favour of one Mr.Sanjaybhai Ambalal Patel for the
administration and other related works concerning the said suit
land.
15. Pursuant to the Power of Attorney, an agreement of
understanding was executed by the Power of Attorney holder in
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favour of the plaintiffs in the year 2006. Upon perusal of the
general Power of Attorney, it transpires that it is not an
irrevocable general Power of Attorney on its face and the said
power of attorney is not coupled with any interest. Further, it
does not transpire from the agreement of understanding
executed by the Power of Attorney holder in favour of the
plaintiffs that on 15.06.2006, whether any of the persons who
had executed the power of attorney in favour of Sanjaybhai on
02.06.1998 were alive at that time or whether they had already
expired.
16. Further, it is required to consider the averments made in
the plaint. In the plaint, the plaintiffs have specifically stated in
paragraph No.3 that the suit land was of a new tenure land and
that it requires a procedure to convert the said suit land into old
tenure land. Thus, from a plain reading of the plaint as well as the
documentary evidence produced along with it, it is apparent that
the fact that the suit land, at the time of the
agreement/understanding was of new tenure land, is not in
dispute.
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17. It is an admitted position that the suit land was new tenure
land at the time of the agreement/understanding. The learned
trial Court has relied upon the decision of the Larger Bench of
this Court in the case of Deceased Shaikh Ismailbhai
Hushainbhai Through Legal Heirs (supra) and recorded a finding
that the said agreement/understanding is hit by Section 43 of the
Act of 1948. In the said case, the Larger Bench has settled the
proposition of law wherein, the question of reference was
framed pertaining to "whether the plaint is liable to be rejected
under Order 7 Rule 11 of the Code of Civil Procedure on the
ground that the suit for specific performance of a contract based
on an illegal or invalid agreement to sell hit by Section 43 of the
Tenancy Act, 1948 is not maintainable", and by answering the
said reference, the Larger Bench, more particularly in paragraph
Nos.138, 139, 151 and 153, held as under:
"138. We may clarify that we are not concerned with the dispute
pertaining to the validity of an agreement, i.e. the dispute
whether an agreement is hit by Section 43 or not, i.e. whether it
is valid or not? The issue before us is plain and simple; as to
whether the agreement which has been executed with a view to
transfer a restricted tenure land as prescribed in Section 43(1),
without the permission of the Collector, can be specifically
enforced by the Civil Court by granting a decree of specific
performance of such an agreement." Our concern is about the
jurisdiction of the Civil Court to decide on the question of
enforceability of such an agreement of sale, which in our
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considered opinion clearly resides in the Civil Court as held by the
Division Bench in Ganpatlal (supra). The Civil Court alone will
have jurisdiction to adjudicate on the question of enforceability
of the agreement of sale, on the basis of which the suit for
specific performance has been executed. It is the Civil Court
which alone can look into the fact as to whether the agreement
on the basis of which the suit for specific performance is
instituted is a valid agreement, not hit by any statutory provision,
or forbidden by law or opposed to public policy.
139. The question as to enforceability of an agreement hit by
Section 43 of the Tenancy Act, 1948, to grant a decree of specific
performance, cannot be by any stretch of imagination, a question
within the scope of the jurisdiction of the revenue authority
under the Tenancy Act, 1948. There is no gainsaying that Civil
Court will not be required to stay a suit for specific performance
based on an agreement hit by Section 43(1) of the Tenancy Act,
1948 and relegate the parties to approach the Mamaltdar to
decide on the question of validity of such an agreement.
(g) Enforceability of the agreement hit by Section 43 of the
Tenancy Act:-
151.On a careful reading of the provision in Order VII, Rule 11 of
the Code of Civil Procedure and the law laid down by the Apex
Court in Dahiben (supra), in light of the dispute before us, we
may note that in order to maintain the suit for specific
performance of agreement, which is hit by Section 43(1) of the
Tenancy Act, 1948, the plaintiff would be required to disclose the
cause of action for seeking a decree of specific performance of
such an agreement. The cause of action for a suit for specific
performance of an agreement of refusal by the Vendor inspite of
readiness and willingness of the vendee to execute the sale deed,
will not be existing in a case where the agreement itself is invalid
being hit by Section 43(1), inasmuch as, no cause of action can be
said to have arisen asking the defendant to perform his part of
the contract when there is no sanction and the agreement itself
is illegal or invalid. Further, on the averments made in the plaint,
in conjunction with the documents relied upon by the plaintiff,
the Civil Court will be in a position to ascertain the question of
enforceability of the agreement. It will be in a position to
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ascertain that the agreement, which is the basis of the suit,
whether is hit by Section 43(1) or not, inasmuch as, to seek a
decree of specific performance of agreement, the plaintiff is
required to disclose and establish two circumstances: (i) firstly,
that the documents, which is the basis of the suit is a valid
document in the eye of law and (ii) secondly, that the cause of
action has arisen prior to the presentation of the plaint. If the
documents, i.e. the agreement is an illegal or invalid document in
the eye of law, the Civil Court from the statement in the plaint
itself will ascertain the suit being barred by law. In any case,a suit
basis of which is an invalid document in the eye of law or where
there exists no cause of action to institute the suit on the date of
the presentation of the plaint, the Civil Court will have no option
but to reject the plaint, at the threshold, under Order VII, Rule 11
of the Code of Civil Procedure. The arguments that the Civil court
will be required to frame the issue as to the validity of the
agreement, which is the basis of the suit and must necessarily
proceed with the trial to arrive at the decision as to whether the
decree of specific performance of an agreement hit by law, is to
be granted or not, does not appeal to us.
153. We are in respectful agreement with the decision of the
Division Bench in Naranbhai Kanjibhai Gajera (supra), holding
that the Division Bench decision in Amarben (supra) can be said
to be 'per incuriam' ignoring statutory provisions and in view of
the decision of another Division Bench dated 21.06.2021 in
Vijaybhai Shambhubhai Patel (supra), which was challenged in
Special Leave to Appeal (Civil) No.5124 of 2022, and which has
been dismissed vide judgement and order dated 10.11.20222
affirming the Division Bench judgement in Vijaybhai
Shambhubhai Patel (supra)."
18. Therefore, considering the said reference, the Larger Bench
answered it in the affirmative that the plaint is liable to be
rejected under Order VII Rule 11 of the Code on the ground that
a suit for specific performance of a contract, based on an illegal
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or invalid agreement to sale, hit by Section 43 of the Act of 1948,
is not maintainable.
19. Considering this, it is an admitted position that in the present
case, the suit land in respect of which, the
agreement/understanding was executed, was of new tenure
land. Therefore, it is hit by the provisions of Section 43(1) of the
Act of 1948, as the agreement has been executed without
obtaining prior permission of the competent authority as
envisaged under Section 43(1) of the said Act. Further, in absence
of conversion of the suit land into old tenure land, no such
agreement can be entered into and since the agreement to sell
pertains to new tenure land, it is hit by Section 43 of the Act of
1948.
20. Considering the above, in our considered opinion, the
findings recorded by the learned trial Court are just and proper
and do not require any interference. The learned trial Court,
while coming to the said conclusion, has rightly relied upon the
ratio laid down by the Larger Bench in case of Deceased Shaikh
Ismailbhai Hushainbhai Through Legal Heirs (supra).
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21. Accordingly, the appeal is required to be dismissed as plaint
is liable to be rejected under Order VII Rule 11 of the Code as it is
hit by Section 43 of the Act of 1948. Hence, Point No.1 is
answered in the negative.
22. In view of the above, we are of the considered opinion that
the suit is hit by Section 43(1) of the Act of 1948 and, therefore,
the trial Court has rightly rejected the plaint of the plaintiffs
under Order VII Rule 11(d) of the Code.
23. In view of above, we do not find any merit in the present
appeal and the same is hereby dismissed. No order as to costs.
24. Decree is to be drawn accordingly.
25. In view of disposal of the present appeal, Civil Application
No.1 of 2025 would not survive and stands disposed of
accordingly.
Sd/-
(BHARGAV D. KARIA, J)
Sd/-
(L. S. PIRZADA, J)
KUMAR ALOK
