“Where one person has acquired property in consequence of his fraud upon another. Equity converts him into a constructive trustee, for the benefit of the person who has been injured by the fraud.” [Keeton, p. 192].
In such cases, “it is incumbent on the court to see that a fraud, a malus animus, is proved by the clearest and the most indisputable evidence.” [Mc Cormick v. Grogan, (1869) LR 4 HL 82 (97), per Lord Westbury].
In order to sustain an act of deceit, there must be proof of fraud, and nothing short of that will suffice. [AIR 1960 MPLJ 865].
The limited meaning given to the word “fraud” in section 17 of the Indian Contract Act does not apply to fraud for which a decree, judgment or order might be set aside by an Equity Court. “There is in the person chargeable with it the malus animus putting itself in motion and acting in order to take an undue advantage of some other person for the purpose of actually and knowingly defrauding him.” [25 IC 782 (LR 1867, 3 Ch. 263 referred)].