TaxTMI 
TaxTMI 
1972 (5) TMI 76
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....ant form the respondent in the year 1956 for the construction of 250 and 176 tenements for industrial labour in Ahmedabad at Mithipur Khokhra Mehmedabad. 3. The record of the case reveals that the respondent Board had under taken 5 projects for constructing residential tenements for industrial labour at Ahmedabad. All the relevant details of these 5 projects are shown by the learned trial Judge in his judgment in a tabular form. Two of these projects were at Malek Shaban or Bapunagar one at Mithipur, another one at Mithipur Khokhra Mehmedabad, and one at Asarwa all situate in Ahmedabad. For the purpose of suit contracts we concerned with the 4th project at Mithipur --Khokhra -- Mehmedabad area. This project was for the construction of 784 tenements and technical sanction thereof was obtained in he month of August, bad project of 784 tenements was divided into four groups. Out of these four groups, we are concerned in this suit only with two groups namely, group ' D' and group 'F'. Group 'D' Consisted of 1l76 tenements. The appellant- plaintiff has kept the contracts for the construction of these two groups of tenements. 4. In the month of January, 1956....
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.... notice inviting tenders Sch. `A' which is with regard to the materials to be supplied to the contractor by the department. estimates and details of the construction work, schedule of rates, specifications and the plan showing the details of the construction to be carried out. 7. The record of the case reveals that on 9th May, 1956 a meeting of the board was called to consider the items of agenda. as found at Ex. 200 . Items Nos. 3 and 4 thereof are relevant for the purpose of this appeal as they relate to the contracts which have been kept by the appellant firm. The contents of these two items reveal the nature of the negotiations which took place between the parties before the contracts at certain percentage less than the estimated cost shown in the notice s inviting the tenders and other papers relating to the tenders. There after on the same day the said meeting of the Board is found to have passed some resolutions as revealed form Ex. 199 which is a copy of the minutes of that meeting,. The resolution No. 1003 which appears in these Minutes reveals that finally the appellant firm's offers to execute the contracts at certain percentage below the published estimated c....
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....dea as regards the cost involved in execution of the contracts in question. 12. It is an admitted position that even for second Malek Shaban Project, which received technical sanction on 24th September, 1954, the original plan proposed one acqua privy to be shared by two tenements. But this plan was subsequently revised in the month of January, 1955. and it was decided to construct one acqua privy or each of the tenements. This obviously resulted in some additional work which was not covered by the original published estimate of cost,. Therefore, though the published estimate of costs of one block of 8 tenements was originally shown at the previously mentioned figure of Rs. 15,398, 50, (as mentioned with regard to the first project) the extra cost of Rs. 1,377/- per block of 8 tenements was offered to the concerned contractors by the respondent Board. 13. As stated above, there were two Mithipur Projects, the first which is at serial No 3 in the table contained in the Judgment of the trial court, is known as "Mithipur Project " while the second which is at serial No. 4 of the said table, is known as " Mithipur-Khokhra- Mehmedabad Project " . This first Mithipur project found ....
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....presentation was false to the respondent Board and since the established practice (according to the appellant plaintiff) was to publish only the scheduled rates, multiplied by the quantity of work, to be executed, it was cost was the actual estimate of cost arrived at by the said multiplication. in plaintiff the respondent Boar " deliberately and fraudulently mislead" it and schedule of rates constituted the basis of the rates on which the estimate was shown". The appellant says that this was a material statement of fact on the basis of which tenders were invited. It is alleged that relying upon this statement, which is proved to b false, it entered into the suit contracts, According to appellant therefore, making and misrepresentation as regards a very material and important fact with the result that the contracts were rendered avoidable and by their execution the plaintiff suffered substantial damage. 15. Proceeding further with the course of events that took place before the suit was filed, it is alleged that the plaintiff first came to know about this alleged fraud or misrepresentation during the course of the execution of the contracts when the first running account plainti....
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....osed to proceed with the revised plan " without prejudice". This letter further speak that all the payments of bills preferred by the appellant " already receive and to be "under ports". Correspondence between the parties thereafter ensued as found by reference to Exts. 59.60.61. 63. and 66. Reference to these documents shows that this correspondence took place between the parties form 17th December . 1956 to 13th February, 1957. It is clear by reference to this correspondence that the appellant and other contractors s had taken a specific and clear stand that they entered into the contracts under the belief that he published estimate of costs shown in the tender was correct. The officers of the respondent Board, however, did not accept these contentions of appellant. It is found that thereafter the appellant. It is found that thereafter the appellant proceeded with the work and completed the same in accordance with the plan. 17. On 11th December, 1957, the appellant addressed one letter to the Housing Commissioner of the respondent Board, as found at Ex. 70. intimating inter alia that the work of both the contracts was ready and therefore, the possession thereof should be taken....
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.... multiplied by the quantity of work executed. Since this is not done, the appellant has claimed different between what ought to have been paid to it according to the rates and what is actually paid to it according to the lump basis. This claim amounts to Rs, 1,22,000/- so far as 'D' group tenements are concerned. Thus, the appellant has made the total claim of Rs. 2,10,000/-. (Rs. 1,22,000/-+88,000/-) described it in the plaint as on account of "damages or losses sustained" by it. 20. Alternatively, the appellant has claimed that the respondent Board was not entitled to make any curtailment and to make deductions on that account on the basis of scheduled rates. It is said that such deductions are of the value of Rs. 84,800/- regarding both the contracts. The appellant has therefore contended the if its claim of Rs. 2,10,000/- is not allowed, this amount of Rs. 84,800/- should be decreed in its favour. 21. Next claim of the appellant is for Rs. 11,644/-. This amount represents the short payment which the appellant claims to have been made to it on account of the construction of two office buildings for groups 'D' and 'F' . Details of this claim are foun....
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....r contended in its written statement that schedules of rates which are incorporated in the tender contracts are meant only for putting valuations on additions and alteration made in the original contracts and, therefore, it was entitled to deduct the value of the curtailments on the basis of these schedules of rates. This, according to the respondent Board would not change the character of the contracts from one of lump sums to that of percentage. 27. The respondent has also contested the appellant's claims as regards office building and decorative "pattas" by contending that these works were covered by the contracts themselves. 28. The learned trial Judge has held that the appellant plaintiff has filed to prove the case of fraudulent misrepresentation as, in his opinion, there was no evidence to show that the members of the defendant Board or the Executive Engineer acting on behalf of the Board in publishing the estimated costs, had knowledge that the published amounts of estimated costs of both the contracts were not correct. However, the learner trial Judge has arrived at clear findings that the figures of estimated costs were " wrong in fact" and that the fact "was in....
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....,000/- per tenement as per directive of Central Government which subsidised such projects. 32. As stated above though Shri Desai has not pressed the appellant's claim as regards the decorative pattas, he has pressed plaintiffs claim regarding the construction of office buildings. 33. Shri Kaji who appeared on behalf of the respondent Board, contended that there is absolutely no evidence to show that any of the officers of the Board had ever suggested or represented to the plaintiff in any manner that the amounts of published estimated costs regarding both the contracts as shown in tender notices, were arrived at as a result of any multiplication of rates and quantities. According to Shri Kaji, the fact that departmental estimates were arrived at on the basis of that multiplication was of no consequence so long as no representation was made to the plaintiff to the effect that published estimates. According to him, the figures of estimate of costs were required to be shown in tender notices only with a view to fix the amount of security deposits and earnest money, and not with a view to make any representation as to the value of construction cost which is not required to....
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....ther the plaintiff has successfully proved that it was induced to enter into the suit contracts by fraudulent misrepresentation as regards the amounts of estimated costs? (4) If the above point is answer in affirmative, can the plaintiff claim any damages either under Section 19 of the Contract Act or under Law or Tort? If so, what? (5) Whether the plaintiff is entitled to its alternative claim of Rs. 84,800/- (6) Is the appellant plaintiff found entitled to any decree on account of the construction of office buildings? 38. Before taking up the first point for our consideration. it would be necessary to know exactly what is meant by a 'lump sum contract'. It is not in dispute that the contracts in question were governed by the different orders contained in public Works Department Manual issued by the Government of Gujarat. This Manual describes contracts of two types, namely. (1) `Lump sum' and (2) `Scheduled Contracts' in para. 192 as under: "Contracts" may be of two kinds viz. Lumps Sum schedule. In the Lump Sum Contract the contractor agrees to execute a complete work with all its contingencies in accordance with the drawings an specifications f....
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....ld not and cannot convert the intrinsic nature of that contract. In this connection, it should be noted that the schedule of rates, which accompanies the two suit contracts. specifically mentions its function as under: "For regulating the amount to be added to or deducted from the fixed sum on account of additions or alterations not covered by the contract as per clause (6) of the agreement." These words thus clearly specify the function which the schedule of rates was expected to perform in execution of the contract. Clause (6) of the agreement, to which a reference is made above, relates to the power of the Executive Engineer to make additions and alterations in drawings, specifications etc. It says that such alterations would not invalidate the contract and it specifically provides that additional or curtailed work shall be carried out omitted at the rates entered in the contracts. Looking to these provisions of the contract, it is difficult to comprehend how the mere fact that deductions on account of the curtailments were made in accordance with the scheduled rates, the character of the contract would be changed. We. therefore, see no force in the appellant's content....
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....la fide and misleading references in the details of construction of the said tenders to the aforesaid schedule of rates thereof, actively and fraudulently led the intending contractors including the plaintiffs into the belief that the aforesaid estimated cost as held out by the defendant Board was worked out on the basis of the said schedule of rates and further-more that the quantum of work involved in pursuance of the specifications and plan of the tender was co-extensive with the corresponding parity of the rates and the estimated costs as held out by the Board." In our opinion, these averments clearly disclose a positive case about the misrepresentation. 41. Further reference to the correspondence that took place between the parties during the course of the execution of the contract work, again shows very clearly that according to the plaintiff. it was misled by the positive assertion made as regards the estimate of costs of the work involved in the contract. This corresponding is found at Exhs. 58 to 61 and 63. At this stage we don't find it necessary to make a detailed reference to this correspondence. For the purpose of this point No. 2, however, we find that the r....
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....h is the most important point involved in this case, and on which, the learned advocates of the parties have addressed this court at length. The point is whether the plaintiff has successfully proved that it was induced to enter into the suit contracts, by any fraudulent misrepresentation as regards the amounts of cost estimates published in tender notices as well as other papers relating to the tender contract. So far as English law is concerned. it contemplates three types of misrepresentations namely (1) misrepresentations which are fraudulent. (2) misrepresentations which are negligent and (3) misrepresentations which are innocent. The Indian law on the subject is contained in Section 17 and 18 of the Contract Act. Section 17 defines "fraud" while Section 18 defines "misrepresentation". So far as this case is concerned. the plaintiff has made the positive allegations as regards the misrepresentation which according to it was fraudulent. It is. therefore. first necessary to find what is fraud and what in its nature. Apart from the statutory definition given to this expression by Section 17 of the Contract Act, it should be stated that in the very nature of things. fraud is secre....
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....believes it, which is false." 44. It is in light of these general observations as to the nature and character of legal fraud, we shall now proceed to consider the Indian law on the subject of fraud and misrepresentation. As said above, it is contained in Sections 17 and 18 of the Contract Act. For the purpose of this appeal. we are concerned with clause (1) of Section 17. the same is as under : "Fraud' means and includes any of the following acts committed by a party to a contract. or with his convince. or by his agent. with intent to deceive another party thereto or his agent. or to induce him to enter into the contract : (1) the suggestion as a fact, of that which is not true. by one who does not believe it to be true;" Analysis of this portion of the section reveals the following ingredients : (1) There should be a suggestion as to a fact. (2) The fact suggested should not be true. (3) The suggestion should have been made by a person who does not believe it to be true; and (4) The suggestion should be found to have been made with intent either to deceive or to induce the other party to enter into the contract in question. Let us now consider with r....
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....her details "showing the total estimated cost of each item". It further says that all these documents together form what is called "the estimate". This paragraph stipulates what the document refereed to by it should contain. Sub-para (12) thereof says that the rates entered in the estimate should generally agree with those in the schedule of rates maintained in each division as required by paragraph 379. Paragraph 379, to which a reference is made above. All these provisions are undoubtedly for the purpose of department itself but it cannot be disputed that they clearly point out to the importance which the department attaches to the estimated cost before tender notices are invited. Now, if these estimates of cost are mentioned as such in the notices, which invite tender, then it clearly follows that by stating a particular figure of the estimated cost in these notices the department wants to convey to the intending tenders some idea about the cost, which they would be required to incur in execution of the contemplated work. It is thus quite obvious that the respondent Board did make a representation to the intending tenders to the effect that the work under contemplation would be ....
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....urse, have been different. But that is not the case here. Under the circumstances it must be concluded that the defendant-Board has made a suggestion in the tender notices about the fact which was most relevant and vital to the formation of the contract between the parties. This satisfies the first of the four ingredients mentioned above. 47. Now coming to the second ingredient what is required to be proved by the plaintiff is that the fact which was suggested was not true. On this point Shri Kaji contended that the case of the plaintiff is that it was understood by it that the published estimate of cost represented the correct multiplication of rates with the quantities of different items of the contracts and that it was on such an understanding that it preferred to conclude the suit contracts. He pointed out that there is no evidence to show that there was any representation by or on behalf of the respondent-Board indicating how the amounts of published estimate of costs were worked out. It is undoubtedly true that there was nothing in tender notices issued by the respondent Board or in the tender agreements to suggest how the estimates of costs which were published were worke....
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....in the above referred table, was accorded. However, the estimated cost remained the same. In other words. the said estimated cost did not include the costs of the extras which were added. The same was the position with regard to the suit project No. 4. We have already mentioned what were the extras to be added in the original plan during the course of the execution of the suit project. As will be clear from the discussion which follows, the value of these extras amounted to Rs. 479/- even according to the departmental calculations of the defendant-Board. But in spite of this additional work. the estimated cost per tenement remained at the same figure. namely, Rs. 2,994/- and even the published estimated cost of a block of 8 tenements did not reflect the cost of this additional items. The main point to be noted is that technical sanction with regard to the suit project was recorded on 13th August. 1955. but about 7 months before that i.e. on 4th January, 1955, the department had paid Rs. 1,377/- more per block of 8 tenements on account of the additions of extras. Therefore. the department knew that the cost of additions was not covered by the original estimate and yet it persisted i....
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....n this letter the Executive Engineer Housing Division. Ahmedabad mentioned that as per abstract sheets which he had prepared and attached along with his letter, the extra cost per tenement worked out to be at Rs. 479/-. We have already got before us the copy of the abstracts which show in detail how the estimates of the additional work have been carried out by this Executive Engineer. It further transpires from the receiving evidence that these facts were ultimately placed before the Housing Commissioner for the purpose of receiving technical sanction to the suit project. The facts relating to the above two letters Exs. 250 and 228 are found correlated in one affidavit filed by one Mr. M. K. Kiratsingh Narsinghani who was working as the Deputy Engineer of the defendant Board at that time (vide Ex. 110). It is clear from this affidavit that the Housing Commissioner had asked for the details of the extra cost on account of the additional items of work as provided in the tender papers that the Executive Engineer concerned prepared the above referred abstract showing the details of extra costs and that thereafter the Assistant Commissioner (Housing) forward all these papers to the Hous....
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.... of the plaintiff. His deposition is found at Ex. 128. Reference to this deposition shows that therein he has made an attempt to prove that before entering into the suit contracts. he contacted the then Executive Engineer of the defendant-Board, one Mr. Gghamvir and made some inquiries from him as to how the estimate of costs shown in the tender notices was prepared. This witness alleges that the said Executive Engineer told him that the estimates of cost were prepared "by multiplying the quantity of work of each item with the relevant rates shown in the schedule of rates." Thus. the plaintiff has made an attempt to lead positive evidence in proof of the fraudulent misrepresentation which it wants to prove. It was contended that as against this evidence of the plaintiff, the defendant has not produced any evidence to counter the same and has not preferred to examine the concerned Executive Engineer Mr. Gamvhir and therefore, the deposition given by this witness of the plaintiff should be believed as dependable. The learned trial Judge has considered this aspect of the matter in paragraph 16 of his judgment, wherein he has stated the reason why he has not preferred to rely upon this....
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....ional work as shown in exhibit 228 viz. Rs. 479/- per tenement. The additional cost per block at this rate would be Rs. 479 X 8 = Rs. 3832/-. Adding this to the departmental estimate of Rs. 15,818/- the total estimate cost will come to Rs. 19,650/-/" Then in para. 5. the learned Judge observes as under : "S. L. Patel, Chandnani and other persons connected with the preparation of tender papers for the schemes at Sr. No. 3 were the most material witnesses if the defendant wanted to prove that the published estimated cots of Rs. 15,818/- per block included the extra cost of additional items of work the most important of them being one water closet per tenement instead of one per two tenements. And one is completely at a loss to understand why the evidence of these witnesses was withheld. In these circumstances, therefore, I would also raise an adverse inference against the defendant that these witnesses if produced would not have been able to show that the published estimated included these additional items and was, therefore. correct." The learned judge has concluded this point in para. 17 of the judgment, as under : he fact. however, remains that in the notice to contrac....
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....ional work which he himself estimated as extra cost at Rs. 479/- per tenement and communicated the same to the Assistant Housing Commissioner by letter Ex. 228. Therefore, with regard to him one can say with reasonable certainty that he did not believe the figure of Rs. 15,818/- per block of eight tenements as the published estimated cost to be inclusive of additional times even though the published figure did make the suggestion that it covered all items of planned work. But the fact that S. L. Patel was aware of this does not necessarily mean that Mr. Gambhir who succeeded him was also aware of this state of affairs . Thus, there is no evidence that Gambhir was aware of this discrepancy and therefore. there is no scope for holding that the person making the representation or suggestion in case of the suit contracts did not believe that suggestion to be true. therefore, the third element which is necessary for the act to call under clause (1) of Section 17 has not been satisfied in the present case." In our opinion. this approach of the learned trial Judge is not correct. Chitty in his book on Contracts (twenty-third edition). Vol. 1. at page 281 observes as under : "The req....
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....hat the statement was wholly untrue and therefore they had to incur vary much more expense. Eventually they filed an action for damages for fraud. The question which was agitated before the House of Lords was relating to the liability of the principal for the fraud committed by his agent. Earl of Halsbury is found to have observed as under with regard to this point : " I do not understand the learned Judge to express any doubt as tot he liability of the principals for the fraud of their agent. if there was fraud : Cornfoot v. Fowke, (1840-6 M & W 358). If it was supposed to decide that the principal and agent could be so divided in responsibility that - like the schoolboy's age game of `I did not take it. I have not got it' -- the united principal and agent might commit fraud with impunity, it would be quite new to our jurisprudence." Then concluding his discussion on the point, he has further observed as under ; "I cannot conclude without saying that I desire to associate myself entirely with the observations which have been made in by the Lord Chancellor that it matters not in respect of principal and agent (who represent but one person) which of them possesses t....
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....true. But it has now been laid down by the House of Lords that in such a case the principal is as much liable as though he had himself made the representation knowing it to be untrue: 1907 AC 351. In that case it was said by Lord Loreburn, L. C. at page 354; that : `the principal and are one, and it does not signify which of them made the incriminated statement or which of them possessed the guilty knowledge'." 5th May. 1972 53. Proceeding further he has observed as under about the same point : "The defendants are a joint stock company acting and conducting business by a staff of officers and other agents whose duty it is in many departments to manage the company's business and to look after its affairs. What is the result of this state of affairs ? The company and its agents must be regarded as one, and the former be deemed to have the knowledge of its agents in relation to the business. It is impossible to believe that there were not many of the agents who must have known of the relations subsisting between the defendants and their tenants. and I agree with the view of Romer L. J.. that Captain Dixev and Mr. Addis must have known that the representations were unt....
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....ts in Group D amounting to Rs. 4,92,150/- i.e. 0.28 per cent below the estimated cost of Rs. 4,93,531/- and (ii) the lowest tender of Shri R. C. Thakkar for constructing 176 tenements in group F amounting to Rs. 3,44,322/- i.e. 0.9 per cent below the estimated cost of Rs. 3,47,446/-." Thus both these documents reveal not only that published estimate of costs was a very important fact relating to the contract but also that the plaintiff had taken that estimate as a correct estimate which could form a proper basis for negotiations which finally culminated into completed contracts. 56. These two documents Exs. 200 and 199 should be viewed in context of previously referred documents viz. Ex. 250 and which is the letter of Housing Commissioner dated 16-5-1955 and the other Ex. 228 by which it was conveyed to the Housing Commissioner and other officers of the respondent Board that the estimate of Rs. 2,994/- per each tenement did not include the cost of extras amounting to Rs. 479/-. We have made a detailed reference to these tow documents while discussing the second ingredient of Section 17(1) of the Act. We find that no responsible officer of the respondent Board who handled the ....
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...., who was working as the Assistant Officer in the office of the Accountant General that the scheme in question was subsidised by the Central Government and the Central Government had fixed Rs. 3,000/- as ceiling of cost per each tenement for the purpose of subsidy. But nothing further is found from the evidence supplied by this witness, However, the fact remains that even in spite of the additions made in the plan regarding the tenements covered by the suit contracts, the defendant Board was expected to complete the construction within a limit of Rs. 3, 000/-. This may be a factor which might have induced the officers of the Board not to make any change in the published estimate of cost because it was prepared with regard to the original plan. But beyond this we cannot say anything which would attribute mala fides to the action of these officers in not publishing the correct estimate of cost. 60. So far as the payment of running bills to another contractor M/s. A. M. Parikh & Sons is concerned, it is undoubtedly found by reference to the running bills Exs. 142 and 143 that they were paid on the basis of scheduled rates. A reference to the third bill Ex. 145 shows that the paymen....
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....ur opinion, the finding that the false representation was knowingly made by the party concerned. is by itself sufficient to bring the case within the mischief of Section 17 of the Contract Act. It is, therefore, not necessary to make any further probe into the motive of the person making false representation. Even if the motive of the person indulging in deceit is very laudable, he cannot escape from the consequences of his action. In this connection it would not be out of place to make a reference to the decision given by Privy Council Motor Finance Co., v. Addison & Co. Ltd.. Their Lordship came to the conclusion that the evidence given on behalf of the plaintiff was sufficient to establish that the plaintiffs relied on the defendant's representations as to price and as to initial deposit, with regard to the motor cars referred further observed as under with reference to the facts of that case: "and in their Lordships' view, the representations complained of were not made, so far as can be seen with any intention to injure the plaintiff firm. The expectation was that each transaction would be carried out in due course, each hirer fulfilling his obligations. But as Ston....
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.... below the actual cost of the work covered by the suit contracts. The question which this aspect of the matter raises is whether the plaintiff firm. whose partners should be presumed to be possessing at least a modicum degree of business sense would agree to undertake the responsibility of execution of the suit contracts for a price which 20% below the market price? Reference to Exs. 200 and 199 shows that during the course of the negotiations between the parties the plaintiff was persuaded to reduce the lump sum amount by 0.28% with regard to `D' group and by 0.9% with regard to `F' group. If the plaintiff had known that the representation made by published estimate was already 20% less than what is ought to be, would it be foolish enough to still reduce the price of the contracts by 0.28% and 0.9% ? In our opinion. this aspect of the matter clearly reveals that the appellant -- plaintiff agreed to the further reduction by 0.28% and 0.9% only because an impression was created by the respondent-Board that the estimate of cost which was published by it was the correct estimate covering all the details of the suit contracts. 67. In this connection, it should be remembered ....
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.... anxious to see that the work involving the extra cost of Rs. 479/- per tenement should so far as possible be executed within the limits of Rs. 3000/- fixed by the Central Government. It appears that it was for this purpose that they did not think it proper to change the original figure of cost estimates. 70. Considering therefore. all these circumstances we find that even the fourth ingredient of Section 17(1) of the Contract Act is satisfactorily proved. 71. The foundation of the vice of fraud contemplated by Section 17 of the Contract Act manifestly is that a man making any representation which he intends another to act upon. must be taken to warrant his belief in its truth. A person making such a representation should be presumed to be aware of the fact that the person to whom it is made will at least understand that he. the representator, believes it to be true. Therefore, if the respresentor does not in fact. entertain any such belief in the truth of his representation. he is as much guilty of fraud as if he had made any other representation which he knew to be false. or did not believe to be true. In this view of the matter. the consideration of the grounds of the beli....
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....ceed 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 false representation has been made knowingly. or without belief in its truth or 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 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 honest belief. Thirdly, if fraud is 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". All the propositions which are found in the above extract for inquiring whether a particular representation is fraudulen....
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....ulation to know what would have happened had the correct representation been made in the tender notices. The only requirement of S. 19 is to consider what would have been the position of the defrauded party. had there been a correct representation. Therefore. in our opinion. the only manner in which the provisions of Section 19 of the Contract Act can be carried out. would be to consider what additional amounts the plaintiff would have paid if the representation as to estimate of cost of the suit contracts. was correctly made. We find that even if it is believed that the plaintiff should be compensated in the general principles of Torts. it would not make any difference because in Torts. the plaintiff can claim a decree for the damages or loss which it has suffered on account of the misrepresentation in question. It is obvious that damages or loss which the law of Torts contemplates. also includes the profit which the party acting on misrepresentation would have been able to obtain had there been no misrepresentation. This loss. therefore. can be worked out only on the basis that the appellant would have obtained the payment of extra cost of Rs. 479/- per tenement for the construct....
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....fied at the time of the refund of security deposit that it had no claim on any count towards the contract work. He specifically drew our attention to Exhs. 138 and 139. which are the two letters written by Deputy Engineer Housing Sub-Division, Ahmedabad to Executive Engineer. as regards the refund of security deposits to the plaintiff. Ex. 138 is dated 3-11-1958 while Ex. 139 is dated 31-12-1958. Both these letters contain certificates issued by the plaintiff in the following terms: "We. M/s. R. C. Thakkar certify that we have no claim on any count towards this work and contract." The contention of Shri Kaji was that in view of these certificates, it should be held that the plaintiff has waived its claim to damages. We however find that no plea of waiver was taken by the respondent-Board in its written statement and during the course of the trial no issue was framed on the question whether the plaintiff has waived its right to claim damages. resulting form the misrepresentation. As a result of this. Shri Kaji submitted an application to this Court to allow the respondent-Board to carry out suitable amendments in its written statement. The material portion of the amendment. wh....
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....as explained in Dawsons Bank Ltd. v. Nippon Menkwa Kabushishi Kaish. the meaning of the term "waiver" as distinguished from estoppel. Their Lordships have held that waiver is contractual. and may constitute a cause of action. In their Lordships' opinion. waiver is an agreement to release or not to assert a right. Therefore. whenever a waiver is pleaded. it should be shown by the party pleading the same that there was an agreement between them that the person waiving a particular right should not press that right in future in consideration of some compromise from some other person. The view taken by the Privy Council in the above referred case is endorsed by the Supreme Court in Mademsetty Satyanarayana v. G. Yelloji Rao. [1965] 2 SCR 221. If we refer to the amendment application submitted on behalf of the respondent. we find that there is nothing therein which alleges such an agreement. Therefore. we don't feel inclined to allow the respondent-Board to amend its written statement at this stage. This application is. therefore, rejected by us. 79. This brings us to point No. 5 which relates to the alternative claim made by the plaintiff for Rs. 84.800/-. We have already de....