Tort of Deceit 

The tort of deceit is a type of legal injury that occurs when a person intentionally and knowingly
deceives another person into an action that damages them. Specifically, deceit requires that the
tortfeasor
makes a factual representation,
knowing that it is false, or reckless or indifferent about its veracity,
intending that another person relies on it,
who then acts in reliance on it, to that person's own detriment.
 What is the Tort of Deceit?

When a person intentionally and knowingly deceives another

person into an action that damages them, it is a type of a legal
injury that occurs. Deceit specifically requires the tortfeasor to
make a factual representation very well knowing of the fact that it
is false, or indifferent or reckless about its truthfulness, intending
that the other person relies on it, and then act in reliance on it, to
his own harm. Under section
421 of the IPC or the Indian Penal Code and
17 of the Indian Contract Act (ICA), fraud is defined.
Cont…
Kiran Bala v. B.P. Srivastava A.I.R 1982 All. 242. not disclosing the fact that the appellant’s first
marriage was annulled on the ground of unsoundness of mind at the time of marriage to the
respondent, the respondent married the girl the second time. So the court annulled the
marriage on the ground of fraud by a decree of nullity under Section 12(1) (c) of the Hindu
Marriage Act.

R. v. Barnard  (1837) 7 C. & P. 784. a buyer impersonating as a member of the university by

wearing the university cap and gown to get good on credit was held liable as this conduct
amounted as Fraud.
 Langridge v Levy: ExP 1836

The defendant sold a gun for use by himself and his sons to the
plaintiff’s father, representing that the gun was made by a well-
known manufacturer and safe to use, the son used the gun that
exploded wounding his hand.
It was held that the defendant was liable to the son because
there was a contract between them, not on his warranty, but for
deceit.
 Denton v. Southern Ry. Co., 854 S.W.2d
885 (Tenn. Ct. App. 1993)
A train that had been taken off was announced as still
running in a railway company’s current timetable.
This was a misrepresentation and a person had missed an
appointment by relying on it and the loss incurred was
held to have a deceit action.
 Section 421 in The Indian Penal Code
Dishonest or fraudulent removal or concealment of property to prevent distribution
among creditors.—Whoever dishonestly or fraudulently removes, conceals or
delivers to any person, or transfer or causes to be transferred to any person, without
adequate consideration, any property, intending thereby to pre­vent, or knowing it to
be likely that he will thereby prevent, the distribution of that property according to
law among his creditors or the creditors of any other person, shall be punished with
imprisonment of either description for a term which may extend to two years, or
with fine, or with both CLASSIFICATION OF OFFENCE Punishment—
Imprisonment for 2 years, or fine, or both—Non-cogniz­able—Bailable—Triable by
any Magistrate—Compoundable by the credi­tor who are affected thereby with the
permission of the court.
 Section 17 in The Indian Contract Act,
1872
‘Fraud’ defined.—‘Fraud’ means and includes any of the following acts committed by a party to a contract, or with his
connivance, or by his agent1, with intent to deceive another party thereto or his agent, or to induce him to enter into
the contract:— —‘Fraud’ means and includes any of the following acts committed by a party to a contract, or with his
connivance, or by his agent1, 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;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent. Explanation.—Mere silence as to facts
likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case
are such that, regard being had to them, it is the duty of the person keeping silence to speak2, or unless his silence,
is, in itself, equivalent to speech. Illustrations
Pasley v. Freeman 100 Eng. Rep. 450 (K.B. 1789).

Brief Fact Summary. Plaintiff asked Defendant for a credit reference. Defendant lied to Plaintiff.
Plaintiff sued Defendant for fraud.
Synopsis of Rule of Law. If deceit or fraud causes damage to the plaintiff, then it is maintainable
in an action against the defendant.
Facts. Pasley (Plaintiff) was a merchant that asked Defendant for a credit reference on Falch
before selling him goods on credit. Defendant lied to Plaintiff about Falch’s credit and Plaintiff
then shipped the goods to Falch who never paid for them. Plaintiff then sued Defendant for
fraud and misrepresentation. Verdict for Plaintiff. Defendant appealed.Issue. Whenever deceit
or falsehood is practiced to the detriment of another, will the law give redress?
Held. Yes. Judgment affirmed.
Ram Chandra Singh vs Savitri Devi And
Ors on 9 October, 2003
 Chittaranjan Das vs. Durgapore Project
Limited & Ors. 99 CWN 897,
"Suppression of a material document which affects the condition of service of the petitioner, would amount
to fraud in such matters. Even the principles of natural justice are not required to be complied within such a
situation.
It is now well known that a fraud vitiates all solemn acts. Thus, even if the date of birth of the petitioner had
been recorded in the service returns on the basis of the certificate produced by the petitioner, the same is
not sacrosanct nor the respondent company would be bound thereby.“
The petitioner's legal right to join his job pursuant to his appointment is subject to the conditions laid down
under the Standing Order. The respondent as an employer is entitled to ask the petitioner to submit proof
of his age in term of the said Standing Order which as indicated herein before has the force of law.
Difference between deceit and
Negligence
Negligence and deceit differ with respect to remoteness of damages. In deceit the defendant is
liable for all losses flowing directly from the tort, whether they were foreseeable or not. In Doyle
v. Olby (Ironmongers) Ltd, Lord Denning MR remarked, "it does not lie in the mouth of the
fraudulent person to say that [such damages directly flowing from the fraudulent inducement]
could not reasonably have been foreseen".So where there is a sudden downturn in the property
market, a person guilty of deceitful misrepresentation is liable for all the claimant's losses, even
if they have been increased by such an unanticipated event. This is subject to a duty to
mitigate the potential losses.
Contributory negligence is no defence in an action for deceit.  However proving deceit is far
more difficult than proving negligence, because of the requirement for intention.
 What is the Effect of Silence?
Simply remaining silent about something will not in a usual course amount to false representation. But there
are some exceptions to this rule.
Half-truths: It is a statement which only tells a part of the truth. It can be a false representation if the left out
part of the statement makes what is said to be misleading and conveys some other meaning. Example- If A
says, “I am a good driver. In the past thirty years, I have gotten only four speeding tickets.” This statement is
true, but irrelevant if he started driving a week ago.
Deliberate concealment: Actively concealing information can amount to a false representation. Example- While
selling clothes, Mr. B actively conceals a stain while showing the apparel which the buyer would otherwise
have easily been able to see, he is making a false representation that the fault does not exist.
Failure to meet statutory requirements: In some circumstances, there is a statutory duty of the person to
reveal some particular information. If in such cases he fails to do so then it can amount to a false
representation.
Knowledge of falsity- The defendant must know that the representation was
false, or at least had no genuine belief that it was true. In Derry v. Peek
An act incorporating a tram company provided that, with the consent of the Board of Trade, carriages could
be moved by animal power, by steam power.
The directors issued a prospectus stating that the company was entitled to use steam power instead of
horses under the Act.  The complainant took shares in this statements faith.
An act incorporating a tram company provided that, with the consent of the Board of Trade, carriages could
be moved by animal power, by steam power.
The trading board declined their consent to use steam power and the company was wound up.
In an action against the directors for false statement, they were held not to be liable for the
misrepresentation as they honestly believed that the statement was true even though they were guilty of
some carelessness in making it.
 What are the Damages given for Deceit?

The claimant is entitled to be put back into the position in which he or she would have
been in if the deceit had not taken place. In other words, this means that if, for example, a
claimant was led to believe they were buying a property worth Rs. 10,00,000 but the
defendant knew that it was only worth Rs. 5,00,000, then the claimant is entitled to
damages Rs. 5,00,000 and may claim it. This means that the defendant is liable for all
losses directly flowing from their wrongdoing.
In some certain circumstances punitive damages so as to punish the person who defrauded
may be levied. These are usually related to the actual losses suffered, the degree of malice
and deceit showed.
Sources
https://www.casebriefs.com/blog/law/torts/torts-keyed-to-epstein/misrepresentation/pasley-v-
freeman
/
https://indiankanoon.org/doc/821690/