PRESENTED BY
ADITYA DHAR, Advocate
Delhi High Court
Mobile: +91 9971873110
email:- aditya.dhar@vaishlaw.com

FRAUD & COMMON OFFENCES IN AN ORGANISATION

  • Numerous instances arise where a company becomes a victim to various types of crimes conducted by third parties and even the employees. Companies become a tool for such individuals to extract money and engage in various illegal activities. Broadly, crimes are of two types:
    • Non-cyber crimes
    • Cyber crimes
  • As per Black's law dictionary, "Fraud" consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury. As distinguished from negligence, it is always positive and intentional.

EXCUSES FOR DOING FRAUD

  • Everyone else was doing it
  • I/They can afford it
  • I needed the money
  • It was just a loan...I would have repaid it
  • I felt used and wanted revenge
  • I meant no harm and did no harm
  • I did it to keep the business afloat
  • Bribery is the norm in this type of business
  • What I did was entirely appropriate for someone in my position
  • My employer didn't compensate me well enough, so I took what was due to me

FRAUD AS PER THE INDIAN CONTRACT ACT, 1872

  • As per Section 17 of the Indian Contract Act, 1872, "fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto of his agent, or to induce him to enter into the contract:
    • the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
    • the active concealment of a fact by one having knowledge or belief of the fact;
    • a promise made without any intention of performing it;
    • any other act fitted to deceive;
    • any such act or omission as the law specially declares to be fraudulent.

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 speak, or unless his silence is, in itself, equivalent to speech.

  • As per Section 19 of the Indian Contract Act, 1872, when consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. A party to a contract whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.

To read this article in full, please click here.

© 2024, Vaish Associates Advocates,
All rights reserved
Advocates, 1st & 11th Floors, Mohan Dev Building 13, Tolstoy Marg New Delhi-110001 (India).

The content of this article is intended to provide a general guide to the subject matter. Specialist professional advice should be sought about your specific circumstances. The views expressed in this article are solely of the authors of this article.