Writers on equity distinguish two kinds of fraud, viz., actual or positive fraud and constructive fraud. The former is applied to those eases in which there is an intention to commit or cheat or play deceit upon another person to his injury. “By constructive fraud are meant”, says, Mr. Story, “such acts or contracts as, although not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, are yet by their tendency to deceive or mislead other persons, or to violate private or public confidence, or to impair or injure the public interest, deemed equally reprehensible with positive fraud, and therefore, are prohibited by law as within the same reason and mischief as acts and contracts done malo animo.”
The second clause of Section 18, Contract Act is probably intended to meet cases of constructive fraud in which there is no intention to deceive. [Oriental Bank Corporation v. Fleming, 3 Bom 242, 267]. Concealment or suppression of material fact ‘is falsehood and fraud, as bad as direct lie. Active concealment is aggressive fraud. [Kuppuswamy Gounder v. Keruppathal, (1987) 32 LW 822].