Home Secretary Theresa May has been criticised by the Court of Appeal for her department's "glaring shortcomings" in a case in which a visitor from India won "over-the-top" damages for her alleged ill treatment on arrival at Heathrow Airport.

Rhada Patel was awarded £125,000 when the High Court ruled she was bullied and harassed by immigration officers guilty of "outright dishonesty, malicious behaviour and conspiracy".

Three appeal judges have blocked the award and decided that, although aspects of Mrs Patel's treatment might have been heavy-handed, the decision cannot stand and her case must be reheard.

The judges were equally scathing of both Mrs May - said to have taken "an unaccountably cavalier attitude towards the proceedings" - and the deputy High Court judge who awarded the damages and whose reasoning was described as "profoundly unsatisfactory and unfair".

The UK Border Agency, and those advising it, were also condemned for "a litany of failures" on their part by Lord Justice Moore-Bick, Lord Justice Underhill and Lord Justice Christopher Clarke.

Deputy Judge Anthony Thornton QC awarded Mrs Patel the damages at a hearing in London in July last year after finding her human rights had been violated.

Lord Justice Clarke said the amounts, including aggravated and exemplary damages, "appear to me extravagant and as over the top as the findings of fact which the judge made".

In his ruling, Judge Thornton said Mrs Patel's visit to England was intended to be a "family visit of a lifetime", but it turned into "a nightmare of unimagined proportions".

Mrs Patel, 34, claimed for her unlawful detention between May 23 and 28 2011, for the "deliberate and malicious ill-treatment" when she was interrogated, for the concoction of admissions she was alleged to have made and for her treatment following her detention.

The judge said that the housewife, who lived in Gujarat State, India, was invited by her younger sister, who had emigrated to the UK in 2003, to stay as a guest at the family home in Harrow, Middlesex, while her husband was working in the Seychelles and her two children were being cared for by her in-laws.

Her sister sponsored her visit by paying for all her travel and living expenses for what was intended to be a three-month visit.

Regrettably, said the judge, Mrs Patel's preliminary check point interview at Heathrow was neither fairly conducted nor reliably noted down on the landing card and the language in which it was conducted was Hindi, which she barely spoke.

After a more detailed interview later the same evening, immigration officers decided that she intended to work in the UK, contrary to the terms of her visa, and refused her leave to enter and decided she should be detained until her removal back to India.

What seemed to have happened, said Judge Thornton, was that an immigration officer had an "initial hunch or prejudiced assumption" that her purpose in coming to the UK was to obtain unlawful employment sewing curtains for her sister and to remain after her visa had expired - and that her answers as translated to him which appeared to deny any intention to work or overstay were lies.

The judge said that Mrs Patel's evidence was "credible and reliable" - she had never intended to take paid employment sewing curtains and consistently denied this throughout the lengthy interviews she was subjected to on her arrival.

The judge found that during the interviews, unsuccessful attempts were made to bully, frighten and cajole her into making admissions and, despite her having not wavered in her denials, her leave to enter was cancelled.

Awarding her £110,000 in general and aggravated damages and under the Human Rights Act, and £15,000 in exemplary damages - which are recoverable where the abuse of power by public officials is particularly oppressive and arbitrary - the judge said that the case was a "precautionary tale".

He said it had arisen because of the "outrageous behaviour" of an immigration officer and a chief immigration officer who considered it appropriate to manufacture evidence to secure what they considered to be the rightful outcome of an unlawful entry even though there was no basis for that belief.

Today the appeal court ruled the judge had gone wrong, but the Home Secretary also had to bear the blame because no attempt was made to ensure that the immigration officers involved were called to give evidence and defend the challenges to their integrity.

Lord Justice Moore-Bick said of Mrs May: "She must also bear the blame for failing to place before the court detailed witness statements from all of the officers who could give useful evidence...."

Judge Thornton also did not have the benefit of seeing officers cross examined.

But he had been prepared "to draw positive inferences of the most damaging kind from the failure of the secretary of state to provide in full evidence which he considered to be available to her".

Lord Justice Moore-Bick, vice-president of the appeal court, said the judge was placed in a difficult position because of the failure of the secretary of state to adduce evidence that might have enabled "many troubling questions" to be answered.

But that did not entitle him "to draw inferences that are not properly supported by the evidence" and make findings of dishonesty "if other explanations, such as muddle, mistake or incompetence, are equally plausible."

The appeal judge added: "Despite the glaring shortcomings in the way in which the secretary of state chose to advance her case, I do not think that (Judge Thornton) was entitled on the limited evidence before him to make findings of outright dishonesty, malicious behaviour and conspiracy on the part of the various individuals concerned. I would therefore allow the appeal."

The judge stressed it did not follow that Mrs Patel herself was dishonest. There was "room for misunderstanding in the critical interviews".

It was therefore not possible to reject her case and "regrettably" there would have to be a rehearing.

Also allowing the appeal, Lord Justice Underhill described Judge Thornton's reasoning as "profoundly unsatisfactory and unfair and does not come close to justifying the factual findings that he made."

The case was "a striking example of a claim being decided on paper where live evidence was plainly required".