Counsel seeks permission to approach the dice. Much obliged.

The council will be dealing

with the issue that,

II. ASSUMING THE CONTRACT IS NOT VOID, IT IS VOIDABLE BY VIRTUE

OF FRAUD UNDER INDIAN CONTRACT ACT,1872

The counsel has following contention TO MAKE:

a. DRAZON DELIVERY IS LIABLE FOR COMMITTING FRAUD UNDER

SECTION 17 OF INDIAN CONTRACT ACT,1872

b. FRAUD IS NOT JUSTIFIED BY THE DEFENCE OF DUE DILIGENCE

c. THE CONTRACT IS VOIDABLE THEREFORE DRAZON DELIVERY IS

OBLIGATED TO RETURN THE PURCHASE PRICE OF NAM02 AND ALSO

TO PAY DAMAGES UNDER TORT OF DECEIT.

A. Your lordship, drazon delivery represented themselves as the owner of the

machine and after the delivery of the said machine it was found that the

machine was stolen by the Drazon Delivery from Fairtel Ltd 1 and Therefore,

Drazon delivery is liable for Fraud under section 17 of Indian Contract

Act,1872.

As held in Gauri Shankar v Manki kunwar, AIR 1924 All 17 false assertion made with

the knowledge that it was not true amounts to fraud.

In the present case because false assertion was made by Drazon Delivery with the

knowledge that it was not true. It amounts to fraud.

According to Derry v Peek2 fraud is proved when it is made with knowledge.

1
preposition, 10.
2
(1889)14 App Cas 337 (KB).
In Jewson &Sons Ltd v Arcos Ltd (1933) it was held that commission of fraud is proved when the

misrepresentation is made and party is induced to act upon it

In the present case, Drazon Delivery misrepresented the title of the machine which gave the

impression of having the ownership and induced Mr Rambani to act upon it, which proves the

commission of fraud . (also it is against section 27 of sales of goods act there cannot be a sale by a

person who is not an ,jm,kjk,mj,kmjm,jjkm,jk,mjk,mjmkjmk,owner.)

According to Kerala High Court in the case of Sayu Mohammad Abdulla v Neelkantan

Krishnan, AIR 1958 , misrepresentation as to title even made by vendors made recklessly,

cannot escape the charge of fraudulent misrepresentation3.

(i) Drazon Delivery actively concealed the material fact i.e. title of the goods

which amounts to Fraud under 17(2)4.

In Aktar jahan Begum v Hazari Lal it was held, Selling the property of other and

concealing about its title despite the agreement that the seller could not be held

responsible for defect in title is fraud .

(ii) Drazon Delivery had duty to speak

Drazon Delivery had the duty to speak about the title since it was highly material which

amounts to fraud. In re Nursey Spinning & Weaving Co Ltd it was held that Duty to speak

arises where in contracting party reposes trust and confidence in the other.5

In the present case Mr. Rambani was in friendly terms with Mr. Badshah Khan who was the

CEO of Drazon Deliveries since both of them were classmates in high school.6

3
AIR 1958 ker 322.
4
Indian Contract Act,1872.
5
ILR (1880)5 Bom 92.
6
Proposition, 4.
 B. FRAUD IS NOT JUSTIFIED BY THE DEFENCE OF DUE DILIGENCE

If the representor is untrue , it is no defence that the person to whom the

representation was made had the means of discovering, and might with reasonable

diligence have discovered that it was true, or that he made a cursory inquiry into the

facts. To escape liability the defendant must show either that the plaintiff had

knowledge of the facts which showed it to be untrue, or that he stated in terms, or

showed clearly by his conduct that he did not rely on the representation as held in

Redgrave v Hurd.7

C. THE CONTRACT IS VOIDABLE THEREFORE DRAZON DELIVERY IS

OBLIGATED TO RETURN THE PURCHASE PRICE OF NAM02 AND ALSO

TO PAY DAMAGES UNDER TORT OF DECEIT.

A contract consent to which is obtained by fraud, is voidable under section section 198 .The

party who has committed fraud is liable to restore the benefit received by him under s.649 and

may recover damages.

The measure of damage is recoverable as is applicable to the tort of deceit10 i.e all actual loss

directly flowing from the transaction induced by the fraud, including the heads of

consequential loss, and not merely the loss which is foreseeable as held in Smith new court

securities ltd v. S. Vickers ltd.

7
Redgrave v Hurd.(1881) 20 h D1;Dobell v Stevens (1825) 3B &C623.
8
Indian Contract Act,1872.
9
ICA.
10
Prithuram Kalitha v Mayaram Sarma,AIR 1925 Cal 555.
The damages for fraudulent misrepresentation, under the general rule, are arrived at by

considering the difference in the position the plaintiff would have been in, had the

representation been true and the position he is actually in, in consequence of its being

untrue11.

CONCLUSION

1.Therefore it is submitted that in the in the present case the court should find that

Drazon Delivery is obligated to return the purchase price of the machine

2.to pay damages to the plaintiff which resulted because of fraudulently

misrepresentation under Tort of deceit.

11
Firbanks Executors v Humphreys,(1886)18 (QB)