The Hermeneutics of the Concept of Misrepresentation: Addressing the Quagmire of Damages and Compensation in Cases of Misrepresentation in Formation of a Contract Under Indian and English Law

In England, fraudulent misrepresentation is governed by English common law and damages are provided under the Tort of Deceit whereas negligent and innocent misrepresentation is governed by the Misrepresentation Act, 1967. In India, fraud is governed by s 17 of the Indian Contract Act, 1872 (ICA) and misrepresentation by s 18 of the ICA. Notably, unlike in England where the remedies for fraud and misrepresentation are provided at separate avenues, in India, the relief to the innocent party in both cases is provided under s 19 of the ICA. This article discusses fraudulent misrepresentation & negligent/innocent misrepresentation and the quantification of damages thereof in contracts under the two legal regimes mentioned above. To that extent, the authors attempt to illustrate certain nuanced differences between the two legal regimes while also highlighting the similarities between English law and Indian law. For the purposes of this article, the authors refer to the Misrepresentation Act, 1967 and the seminal judgments of Derry v Peek, Doyle v Olby, East v Maurer and Smith New Court Securities Ltd. v Scrimgeour Vickers and discuss the “date of transaction rule” as enunciated by Lord Steyn while juxtaposing it with the judgments of the High Court of Delhi, and the Supreme Court of India. In the Indian context, the authors highlight the position of law as is apparent from two recent judgments of the Delhi High Court in NHAI v Pune Sholapur Road Development and Daiichi Sankyo v Malvinder Mohan Singh and Ors and also focus on the judgment of the Supreme Court of India in Avitel Post Stuidoz v HSBC Holdings (Mauritius).