IMPORTANT POINT
Important Point : A subsequent agreement for property transfer is void ab initio if the transferor lacks title, and consent terms are binding and enforceable despite claims of subsequent purchasers.

JUDGMENT :

(R.I. Chagla, J.)

1. The Chamber Summons and the Interim Application filed in the above Suit have been heard together. By the Chamber Summons, the Applicant – M/s Zenith Enterprises (hereinafter referred to as “Zenith”) has sought impleadment in the Suit. Further, consequential relief has been sought in the Chamber Summons. By the Interim Application No. 55 of 2019 filed in the above Suit, the Plaintiffs have sought an Order from this Court under Order XXIII or Order XII Rule 6 of the Code of Civil Procedure (“CPC”), 1908, to pass a decree recording the compromise arrived at between the Plaintiffs and Defendant Nos. 1 and 2 in terms of the Consent Terms signed by the parties and their Advocates, annexed at Exhibit D to the Interim Application (hereinafter referred to as “the Consent Terms”), and for directions from this Court to permit the Plaintiffs to withdraw the amount of Rs.2.70 Crores deposited by the Plaintiffs with the Prothonotary and Senior Master of this Court pursuant to an Order dated 4th July, 2018 passed by this Court, together with the accrued interest thereon.

2. It is relevant to give a brief background of facts leading up to the filing of the present Suit as well as the above Applications and relevant orders passed thereon, which are as under:

(i) A Memorandum of Understanding (“MoU”) had been executed between the Defendant No.1 as Vendor and Plaintiff Nos. 1 and 2 as Purchasers on 27th May, 2004 whereby Defendant No.1 agreed to sell and transfer Flat Nos. 801 and 802, 901 and 902 to be constructed on the 8th and 9th Floors together with terrace admeasuring 1000 sq.ft. attached to Flat No.901, for consideration and on the terms and conditions stated therein. This had been preceded by an MoU dated 25th July, 2002 for construction of upper floors to be carried out in the subject building.

(ii) Thereafter an MoU was executed between Defendant No.2 and Zenith on 21st August, 2008 in respect of joint development of proposed construction on “B” Wing of the subject building described as “Mangal Kunj” “B” Wing CHS Limited.

(iii) An Allotment Letter was issued by Defendant No.1 in favour of Plaintiff No.1 on 11th September, 2010 allotting the complete 9th and 10th Floors of the subject building (floors under construction) in lieu of 8th and 9th floors which have been allotted earlier.

(iv) On 31st December, 2010 there were four registered Agreements for Sale executed by Defendant No.2 as Developer and Plaintiff Nos. 1 and 2 as Purchasers, whereby Defendant No.2 agreed to sell and transfer to Plaintiff Nos. 1 and 2, the Flat No.901, 902, 1001 and 1002 alongwith respective one open car parking space, at / or for the consideration and on the terms and conditions stated therein.

(v) Further, on 31st December, 2010, registered Agreement for Sale was executed by Plaintiff Nos. 1 and 2 as Vendors and Defendant No.2 as Purchaser, whereby Plaintiff Nos. 1 and 2, who had been transferred Flat No.G-1 in the subject building by Defendant No.1, agreed to transfer, convey and assign the said Flat No.G-1 in favour of Defendant No.2 at or for the consideration and in the manner contained therein.

(vi) Housing Loan of Rs.2.5 Crores was sanctioned by the Bank of Baroda in favour of the Plaintiffs on 18th January, 2012 in respect of purchase of the Flat Nos. 901 and 902, 1001 and 1002.

(vii) Letters dated 26th March, 2012 were addressed by Defendant No.2 giving No Objection to the Bank of Baroda giving loan to the Plaintiffs and mortgaging the Flat Nos. 901 and 902, 1001 and 1002.

(viii) The Bank of Baroda deposited / transferred on 31st March, 2012 a sum of Rs.1 Crore into bank account of Defendant No.2.

(ix) The Share Certificates bearing Nos. 14 and 15 were issued by the Society in favour of Plaintiff No.1 / Plaintiff No.2 and Plaintiff No.3 / Plaintiff No.1 respectively. Further, the Share Certificate pertaining to Flat No.G-1 was issued by the Society in favour of Plaintiff No.1 and Plaintiff No.2.

(x) A registered Sale Deed dated 2