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"17. '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 agent 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;
"Mr. Wadhumal has argued that a decree can be set aside only on the ground of fraud, as defined in Section 17, Contract Act. This argument was raised in a previous case that came before this Court for disposal (first Appeal No. 39 of 1906) and was disposed of by the judgment in the following terms--Mr. Dipchand has ingeniously endeavoured to presuaded the Court that in dealing with his case we must hold that the decree can be set aside only on the ground of fraud, within the very narrow meaning of the word given to 'fraud' by the definition in Section 17, Contract Act. But we are not dealing with a common law case of contract; we are called on to exercise our equitable jurisdiction and apply the equitable principles which have by force of Regulation 4 of 1927 been made part of the law of this country. The ruling case on the point is the Duchess of Kingston's case, in which it was held that the effect of a judgment may be avoided by proving the same to have been obtained by fraud or collusion. As fraud is infinite in its varieties, the Courts have always refused to define it (Snell, P. 519); nor is the word defined for the purposes of the Evidence Act; See Amir Ali and Woodnoffe, Notes to Section 41. But a reference to any standard texts book on equity will make it obvious that "fraud" has a wide meaning, far wider than the definition in the Contract Act. It is necessary to investigate into the full meaning of the word for the purposes of the case, for we have it declared by Lord Cairns that a decree can be set aside if there be 'fraud' such that there is in the person chargeable with it the malus animous 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;" Patch v. Ward cited in Mahomed Golab v. Mahomed Sulliman."

Fraud as defined in the Contract Act means actual fraud. But in equity the Courts have also developed the doctrine of 'constructive fraud.' The following extract from Snell's Principles of Equity, Chapter 6, Part II, pages 545 on the concept of 'constructive fraud' is being quoted: . .

"In equity, the term 'fraud' embraces not only actual fraud, in the sense just defined, but also certain other conduct which falls below the standards demanded by equity. Courts of equity did not even stop at 'moral fraud in the ordinary sense' but took account of any 'breach of the sort of obligation which is enforced by a Court that from the beginning regarded itself as a Court of conscience' (Nocton v. Lord Ashburton 1914 A.C. 932 at 954, per Viscount Haldane L.C.). the Courts have refused to define this extended, or constructive, fraud; for, in the words of Lord Hardwicke, 'Fraud' is infinite, and were a Court of equity once to lay down rules, how far they' would go, and no farther, in extending their relief against it, or to define strictly the species of evidence of it, the jurisdiction would be cramped, and perpetually eluded by new schemes which the fertility of men's invention would contrive."

While examining the question whether a fraud had been played upon the Bank in making the application for withdrawal it is fraud the Bank in making the application for withdrawal it is fraud in this wider sense of 'constructive fraud', which defines definition which has to be taken into account. If the result dismissing the Bank's application would be to close an unconscionable transaction in favour of the respondent wrested by it unscrupulously the Court would be slow in dismissing the application. While it can be contended that in the case of compromise decree, the narrower concept of fraud defined in Section 17 of the Contract Act be applied because it is after all a compromise which is in the nature of contract which is assailed the same cannot be said in respect of unilateral transaction of withdrawal. In the latter case the doctrine of 'constructive fraud' has to be applied.