Specific performance of unpartitioned property is restricted to the vendor’s undivided share without delivery of possession.

The Appellant (Original Defendant No. 1) owned a 1/3rd undivided share in an unpartitioned property at Nawab House, Jama Masjid

He entered into an Agreement to Sell (ATS) dated 18.06.2013 with the Respondent (Plaintiff) to sell the ground floor and roof for ₹80 Lakhs, acknowledging receipt of ₹10 Lakhs as earnest money in cash

When the Appellant failed to execute the Sale Deed by the deadline, the Respondent sued for Specific Performance

The Appellant contended the ATS was a result of fraud and collusion with his son and denied receiving the cash payment

The Trial Court dismissed the prayer for Specific Performance—citing the property's unpartitioned state and the Plaintiff’s lack of financial readiness—but directed the Appellants to refund the ₹10 Lakhs earnest money

1. Whether the Agreement to Sell dated 18.06.2013 was vitiated by fraud and misrepresentation?

2. Whether the sum of ₹10,00,000/- was actually paid as earnest money under the said Agreement?

3. Whether the Respondent was entitled to a refund of the earnest money given the unpartitioned status of the property?

Section 44 of the Transfer of Property Act, 1882, which permits a co-owner to transfer his undivided share but restricts the transferee from joint possession of a dwelling-house if they are not a family member

The Court relied on Satish Batra v. Sudhir Rawal (2013) regarding the distinction between "advance money" and "earnest money," noting that part-payments cannot be forfeited unless intended as a guarantee for performance

The Court followed Ramdas v. Sitabai (2009) and Sk. Golam Lalchand v. Nandu Lal Shaw (2024), establishing that a co-sharer can sell an undivided share but cannot deliver possession of a specific defined portion until the property is partitioned by metes and bounds

The Court found that the Appellants failed to prove fraud; the ATS was signed by the Appellant and witnessed by his son, which evidenced its genuineness

The Court rejected the Appellants' denial of the ₹10 Lakhs because the original Defendant failed to testify, leading to an adverse inference, and the ATS explicitly acknowledged receipt of the cash

Even if the transaction violated Income Tax norms, it did not invalidate the civil liability to refund

Legally, while the Appellant could sell his 1/3rd share, he was incompetent to contract the sale of a specific portion (ground floor and roof) of an unpartitioned property

Since specific performance of a defined portion was legally impossible without partition and the Respondent failed to prove readiness for the balance ₹70 Lakhs, the contract could not be performed; Consequently, equity demanded the restoration of the status quo through the refund of the advance

It held that the ₹10,00,000/- payment was duly proved via the written acknowledgment in the ATS

The Court upheld the Trial Court's decree, ruling that the Appellants are liable to refund the earnest money as the specific performance was rightly declined; The appeal was dismissed