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50. Fraud may best be understood in the context of three specific kinds of it, that is understood by the law. These are actual or positive fraud, legal fraud or fraud in law and constructive fraud. The three are enunciated and explained in The Law Lexicon by P. Ramanatha Aiyer thus:

"The CLASSIFICATION OF FRAUD most frequently used by Courts and text writers is (1) Actual or positive fraud; (2) legal fraud or fraud in law; (3) constructive fraud.
ACTUAL OR POSITIVE FRAUD. Actual or positive fraud has been said to consist in circumventing, cheating, or deceiving a person to his injury, by any cunning, deception, or artifice.
CONSTRUCTIVE FRAUD. A constructive fraud has been said to be "an act which the law declares to be fraudulent, without inquiring into its motive; not because arbitrary rules on this subject have been laid down but because certain acts carry in themselves an irresistible evidence of fraud."

51. It is a well-settled principle that fraud vitiates every solemn transaction. The equally well settled proposition is that fraud, wherever found, must be undone. It is on the second principle that this Court thinks that the State Government must examine the validity of the petitioners' appointment on the touchstone of fraud. The earlier decision that the State Government made was a decision in usurpation of jurisdiction, which they did not possess under the law, thinking that they had it. We have concluded that neither the State Government nor the Director of Local Bodies or the District Magistrate, acting on the command of the State Government, have authority under the law to annul the petitioners' appointments, already made, in the exercise of the State Government's power under Section 34 (1B) of the Act of 1916. But, it is quite a different matter for the State Government to avoid the appointments, if they think that on tangible evidence appointments to public posts by the Nagar Palika, are vitiated by fraud. If indeed the appointments are fraudulent in the sense understood by law, these must be undone and for the purpose, the State Government have to examine relevant evidence, one of which may be the inquiry report submitted by the Committee appointed by the District Magistrate. Other evidence would also have to be called before the finding can be reached. The State Government must call that evidence; and, it should be relevant evidence. It is also regarded as a principle that if a transaction is beset by fraud, it can be undone without opportunity to the beneficiary. This principle, however, has to be understood in the context of rights already accrued, where the fraud is not so patent that there cannot be any two opinions about it. If there could be two opinions, the person whose interest may be adversely affected with the finding of fraud and consequent annulment of the benefit accruing to him/ her, the person likely to be adversely affected must be heard. The first kind, where the fraud is so patent that no opportunity need be given, may be classically illustrated by acts done by an impostor in public office, who is caught red-handed, impostering for a public officer. To undo the benefits of the impostor's acts or holding him an impostor, the beneficiaries of his acts or the impostor himself, may not be required to be given opportunity. However, where actions are not so glaringly deceitful but mired in the cluster of some truths and other falsehood, it would be too perilous to deprive the beneficiary of a transaction, purporting to have been done in accordance with law, but impeached as fraudulent, to do so without opportunity to the beneficiary. The petitioners' case would lie in the second category, entitling them to opportunity. In this connection, reference may be made to State of Uttar Pradesh and others v. Ravindra Kumar Sharma and others, (2016) 4 SCC 791. It was a case arising out of a complaint that the writ petitioners had secured their selection to the BTC Training Course under the physically handicapped quota on the basis of certificates, fraudulently procured. The writ petitioners did not suffer from disability under the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Rules, 1996. It was in the context of these facts that it was held by the Supreme Court, reversing this Court, in Ravindra Kumar Sharma (supra):