Draft for discussion only

08.09.2022

Case laws On Elements Of Fraud

1) “Doyle v. Olby (Ironmongers) Ltd. establishes four points.

https://www.wikiwand.com/en/Doyle_v_Olby_(Ironmongers)_Ltd#/overview
First, that the measure of damages where a contract has been induced by fraudulent misrepresentation
is reparation for all the actual damage directly flowing from (i.e. caused by) entering into the
transaction. Second, that in assessing such damages it is not an inflexible rule that the plaintiff must
bring into account the value as at the transaction date of the asset acquired: although the point is not
adverted to in the judgments, the basis on which the damages were computed shows that there can be
circumstances in which it is proper to require a defendant only to bring into account the actual
proceeds of the asset provided that he has acted reasonably in retaining it. Third, damages for deceit
are not limited to those which were reasonably foreseeable. Fourth, the damages recoverable can
include consequential loss suffered by reason of having acquired the asset.” (at p. 777) In this
judgment of Lord Browne-Wilkinson

2) Dr Vimla versus Delhi Administration AIR 1963 SC 1572

http://www.scconline.com/DocumentLink/eEtX0UG3
Under para 15,
To summarize: the expression "defraud” involves two elements, namely, deceit and injury to the
person deceived. Injury is something other than economic loss that is, deprivation of property,
whether movable or immovable, or of money, and it will include any harm whatever caused to any
person in body, mind, reputation or such others In short, it is a non-economic or non-pecuniary loss.
A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived.
Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding
loss to the deceived, the second condition is satisfied.
Cited in

 http://www.scconline.com/DocumentLink/eC9E31Y8 Supreme court 2009

 https://indiankanoon.org/doc/154787655/ Gujarat high court, 2021

3) Derry and others v Peek

https://www.studocu.com/en-gb/document/university-of-london/tort-law/derry-and-others-v-peek-
full/3957972

I proceed to state briefly the conclusions to which I have been led. I think the authorities establish the
following propositions: First, in order to sustain an action of deceit, there must be proof of fraud, and
nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false
representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly,
careless whether it be true or false. Although I have treated the second and third as distinct cases, I
think the third is but an instance of the second, for one who makes a statement under such
circumstances can have no real belief in the truth of what he states. To prevent a false statement being
 Draft for discussion only
08.09.2022

fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the
whole ground, for one who knowingly alleges that which is false has obviously no such belief.
Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there
was no intention to cheat or injure the person to whom the statement was made

4) Ram Chandra Singh v. Savitri Devi and Ors. (2003 (8) SCC 319)
http://www.scconline.com/DocumentLink/Oenz589O

Under pr 16,17,18,19
"Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a
conduct either by letter or words, which includes the other person or authority to take a definite
determinative stand as a response to the conduct of the former either by words or letter. It is also well
settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also
give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists
in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It
is a fraud in law if a party makes representations, which he knows to be false, and injury enures
therefrom although the motive from which the representations proceeded may not have been bad.

5) S.P. Changalvaraya Naidu v. Jagannath

http://www.scconline.com/DocumentLink/tx393nX2
under point 6,
A "fraud" is an act of deliberate deception with the design of securing something by taking unfair
advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to
get an advantage

6) The State Of Andhra Pradesh & Anr vs T. Suryachandra Rao on 25 July, 2005
https://main.sci.gov.in/jonew/judis/27064.pdf
On page 3 of 5
From dictionary meaning or even otherwise fraud arises out of a deliberate active role of the
representator about a fact, which he knows to be untrue yet he succeeds in misleading the representee
by making him believe it to be true. The representation to become fraudulent must be of fact with the
knowledge that it was false.

7) Shanti Budhiya Vesta Patel vs. Nirmala Jayprakash Tiwari

https://main.sci.gov.in/jonew/judis/36250.pdf

It has observed that, it is a plain and basic rule of pleadings that in order to make out a case of
fraud or coercion, there must be (a) an express allegation of coercion or fraud, and (b) all the material
facts in support of such allegations must be laid out in full and with a high degree of precision. If
coercion or fraud is alleged, it must be set out with full particulars