3. FRAUD
Meaning and essential elements of fraud [section 17] : The term 'fraud' means a false representation of fact made willfully with a view to deceive the other party. Fraud includes following:
Wrong suggestion about a fact, knowing that it is not-true;
E.g. X sells to Y locally manufactured goods as imported goods charging a higher price, it amounts to fraud. OR A seller claimed that his projector is made in Singapore, and sold it for Rs. 100,000/- However the fact is that "Projector was made in south India".
Active concealment (Hide) of defect in goods:
E.g. "A car-painter, uses paint to hide the scratches over the old furniture and sold it claiming that is Now". This is fraud. OR X a furniture dealer, conceals the cracks in furniture sold by him by using some packing material and polishing it in such a way that the buyer even after reasonable examination can not trace the defect, it would tent amount to fraud through active concealment.
Promise made without intention to perform:
E.g. "A man and a woman underwent a ceremony of marriage with the husband not regarding it as a real marriage. Held, the husband had no intention to perform the promise from the time he made it and hence the consent of the wife was obtained under fraud. OR "A farmer agrees to supply 100kg potato that will be produced by him out of his field, after three month". Two months has been lapsed, but the farmer neither implant seeds, nor does cultivation. This is case of fraud.
Any activity declared fraud as per other law; under companies act and insolvency acts, certain kinds of transfers have been declared to be fraudulent.
Note: In case of fraud, the seller is always liable even though buyer has an opportunity to check the fraud.
Any activity fitted (supported) to deceive. It covers those acts which deceive but are not covered under any other clause.
Effect of Fraud[section-19]
The effects of fraud are as follows:
(a) The party whose consent was caused by fraud can rescind (cancel) the contract but he cannot do so in the following cases:
Where silence amounts to fraud, the aggrieved party cannot rescind the contract if he had the means of discovering the truth with ordinary diligence;
Where the party gave the consent in ignorance of fraud;
Where the party after becoming aware of the fraud takes a benefit under the contract;
Where an innocent third party before the contract is rescinded acquires for consideration some interest in the property passing under the contract.
Where the parties cannot be restored to their original position.
(b) The party whose consent was caused by fraud may, if he thinks fit, insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representation made had been true.
The party whose consent was caused by fraud, can claim damage if he suffers some loss.
Meaning and essential elements of fraud [section 17] : The term 'fraud' means a false representation of fact made willfully with a view to deceive the other party. Fraud includes following:
Wrong suggestion about a fact, knowing that it is not-true;
E.g. X sells to Y locally manufactured goods as imported goods charging a higher price, it amounts to fraud. OR A seller claimed that his projector is made in Singapore, and sold it for Rs. 100,000/- However the fact is that "Projector was made in south India".
Active concealment (Hide) of defect in goods:
E.g. "A car-painter, uses paint to hide the scratches over the old furniture and sold it claiming that is Now". This is fraud. OR X a furniture dealer, conceals the cracks in furniture sold by him by using some packing material and polishing it in such a way that the buyer even after reasonable examination can not trace the defect, it would tent amount to fraud through active concealment.
Promise made without intention to perform:
E.g. "A man and a woman underwent a ceremony of marriage with the husband not regarding it as a real marriage. Held, the husband had no intention to perform the promise from the time he made it and hence the consent of the wife was obtained under fraud. OR "A farmer agrees to supply 100kg potato that will be produced by him out of his field, after three month". Two months has been lapsed, but the farmer neither implant seeds, nor does cultivation. This is case of fraud.
Any activity declared fraud as per other law; under companies act and insolvency acts, certain kinds of transfers have been declared to be fraudulent.
Note: In case of fraud, the seller is always liable even though buyer has an opportunity to check the fraud.
Any activity fitted (supported) to deceive. It covers those acts which deceive but are not covered under any other clause.
Effect of Fraud[section-19]
The effects of fraud are as follows:
(a) The party whose consent was caused by fraud can rescind (cancel) the contract but he cannot do so in the following cases:
Where silence amounts to fraud, the aggrieved party cannot rescind the contract if he had the means of discovering the truth with ordinary diligence;
Where the party gave the consent in ignorance of fraud;
Where the party after becoming aware of the fraud takes a benefit under the contract;
Where an innocent third party before the contract is rescinded acquires for consideration some interest in the property passing under the contract.
Where the parties cannot be restored to their original position.
(b) The party whose consent was caused by fraud may, if he thinks fit, insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representation made had been true.
The party whose consent was caused by fraud, can claim damage if he suffers some loss.
0 comments:
Post a Comment