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Report No. 13

44. Section 19.-

The second paragraph of the section merely states what is involved in the conception of a contract being voidable. Pollock and Mulla,1 opine that the thought underlying this paragraph is not really clear and point out cases in which restitution is not literally possible, for example, if the owner of an estate, subject to a lease for an unexpired term, contracts to sell it to a purchaser who requires immediate possession and conceals the existence of the lease, the purchaser cannot be put in the same position as if the representation that there was no lease, had been true, or where A sells a house to B and by some blunder of A's agent, the annual value is represented as being Rs. 2,000 when it is in truth only Rs. 1,000.

According to the letter of the present paragraph, so say the learned authors, we may insist on completing the contract and on having the difference between the actual and the stated value paid to him by A and A's successor-in-title for all time. Obviously, such could not be the intention of the Legislature. In order to clarify the intention, we suggest that a qualification be added so that the power of restitution be limited to the extent considered reasonable by the Court. In the consideration of this question the Court, of course, will examine, inter alia, whether it is in the power of the party against whom the contract is voidable to perform it fully.

1. Pollock & Mulla; Op. Cit., pp. 135-136.

It should also be provided that if the fraud or misrepresentation is proved but the Court refuses to enforce the contract at the option of the party aggrieved for some reason, it would be open to the Court to award compensation for the injury caused by the fraud or misrepresentation.

45. The Exception does not apply to active fraud as distinguished from fraudulent silence and innocent misrepresentation. The 'comma' after the word 'silence' in the Exception creates the impression that the word 'fraudulent' qualifies both 'misrepresentation' and 'silence'. The correct interpretation, however, is that the word 'fraudulent' qualifies only 'silence'. This is also the judicial opinion.1 Therefore, the 'comma' after the word 'silence' may be deleted.

1. See Niaz Ahmad v. Parshotam Chandra, 53 All 314.

46. Sections 19A-22.- No change is necessary in sections 19A to 22.



Indian Contract Act, 1872 Back




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