Kapil went to a departmental store to purchase a steel pan. He asked the salesman about the area in departmental store where steel pans are kept. The salesman indicated him the area with instructions that with steel pans, other metal’s pans were also kept. Kapil wrongfully picked an aluminium pan in place of steel pan. The salesman watched but said nothing to Kapil. Kapil reached his house and found that pan was not a steel pan but actually an aluminium pan. Kapil filed a suit against departmental store for fraud. Discuss, whether Kapil was eligible to file suit for fraud against departmental store under Indian Contract Act, 1872?

Section 17 of Indian Contract Act, 1872 defines ‘Fraud’. According to section, “Fraud” means and includes any of the following acts committed by a party to a contract or by his agent with intent to deceive or to induce a person to enter into the contract: i) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; ii) the active concealment of a fact by one having knowledge or belief of the fact; iii) a promise made without any intention of performing it; iv) any other act fitted to deceive; v) any such act or omission as the law specially declares to be fraudulent. It was also explained that mere silence is not fraud. Silence amounts to fraud where (a) there is a duty to speak or (b) where silence is equivalent to speech. On the basis of provisions of Section 17 and the facts given above, it was not the duty of salesman to inform Mr. Kapil about his mistake. Hence, there was no fraud and Kapil was not eligible to file suit for fraud against departmental store under Indian Contract Act, 1872.