However, this decree was challenged in the high court. While passing the judgment, the division bench of Justice M R Calla and Justice Rekhaben M Doshit also directed the authorities to take a final decision either way about issue of declaration under section 21 of the Land Ceiling Act at the earliest, but not later than August 15, 1998.

The court also ordered that the defendant-appellant will maintain the same position about the land till the decision is taken by the concerned authorities . However, the court further held that even if the authorities take a final decision and sanction the scheme, the plaintiff-respondent will not enforce the decree for one month.

But partly allowing appeal, the court modified the decree saying that the plaintiff-respondent shall be entitled to enforce the trial court's performance, subject to condition that the authorities make final declaration about the land under section 21 of the Urban Land Ceiling Act.Going into the details of the case, late Shrimant F P Gaekwad and Savjibhai Patel of Ashok Associates entered into an agreement to construct a housing scheme for the poor at an estimated cost of Rs 89.3 crore in 1977. In March 1977, a memorandum of agreement (MOA) was executed between the two about the land known as Laxmi Vilas Palace Estate. A power of attorney (POA) in favour of Patel was also executed.

However in 1980, Shri F P Gaekwad reversed his decision, and sent his advocate's letter stating that the MOA and POA were void and illegal. A letter was also sent to the competent authority not to proceed with the applications on his property, which were either pending or which may be made by Patel.