JUDGMENT :

1. Heard the learned senior counsel Mr. R. G. Ramani with Mr. P. Kakodkar, for the appellants and Mr. Arun Bras De Sa, learned counsel for the respondents.

2. On 3rd April, 2009, the present appeal came to be admitted by formulating the single substantial question of law to the following effect:

'Whether the first appellate court fell in error in refusing declaration because Francisco Antonio Lucio Pereira and Hermogeneus Sebastiao Pereira were not parties.'

3. The sequence of events leading to the formulating of the said question of law can be briefly narrated as under:

The plaintiffs who are the appellants in the Appeal claim to be owners in possession of the suit property siutated at Village Arossim Taluka Mormugao bearing Survey No.72/1 and also owned other properties including part of a property known as Aframento bearing survey no.73/2 admeasuring 76625 sq.mts situated in the same village. The property vide survey no. 72/1 was inclusive of the alleged illegally occupied property of the defendants, by dispossessing the plaintiffs. The plaintiffs sold the total area of 800 sq. mts to one Francisco Antonio Lucio Pereira and Hermogeneus Sebastiao Pereira and an area of 600sq.mts each of the suit property is occupied by one Jacinto Quadros and Pedro Filipe Pereira, 160sq.mts of the area from survey no.72/1 was sold to the brother of defendant no.1 Rosario Santana Pereira. The plaintiffs retained the possession of remaining area, i.e. 1455 sq.mts of the suit property. The defendants and his brother Rosario Santana Pereira alongwith his wife claimed to be mundkar of the property bearing survey no.73/2 having their dwelling house. The plaintiffs were desirous of selling the property from survey no.73/2 to a third person and since the sale was expected to be free of any encumbrance, request was made to the defendants and the family members of Rosario Santan to shift their residence to suit property contained in survey no. 72/1. The plaintiffs agreed to sell 160sq.mts each to the defendants and Rosario Santan for a nominal price of 150/- out of which an amount Rs.of Rs.100/- was to be paid as earnest money on signing of the agreement and the balance to be paid after shifting of mundkarial house from the suit property to survey no.72/1. The agreement for sale to that effect was executed on 01.01.1986.

4. The case of the plaintiff as set out is that the defendant no.1 shifted his house as per the agreement but the defendants in flagrant violation of the agreement continued to occupy the house no.262. This compelled the plaintiff to sell the property to one Mohammad Saleem Pasha with the existing encumberance of mundkarial house of defendants. The defendants thereafter are alleged to have surrendered their rights in the house bearing no.262 located in the property to M/s. Carrington Hotel, to whom the purchaser Mohammad Saleem Pasha sold the property. This was in consideration of huge compensation being received by them from M/s. Carrington Hotel.

5. On noticing that the defendants had illegally trespassed into the portion of the suit property and started illegal construction, the plaintiff instituted a suit for declaration that the agreement for sale dated 1.1.1986 is null and void and that the plaintiffs are owners in possession of the suit property except the area occupied by Rosario Santan and the area sold by the plaintiffs.

The defendants contested the claim and also set up a counter-claim alleging that there are violations of the terms of agreement, as necessary provision for plan and NOC for construction of house in survey no.72/1 was not obtained, which constrained them to stop the construction. The breach was alleged as the appellants failed to transfer the suit plot in the name of defendants and it was pleaded that the agreement for sale is still existing and valid. By counter-claim, a declaration was sought for executing necessary sale deed and a permanent injunction was also prayed for restricting the plaintiffs from