NAME : AKSHATA SANJAY MHATRE

ROLL NO. : 1418

SUBJECT : LEGAL ASPECTS OF BUSINESS AND TAXATION

TOPIC : WAGER

INDEXI. INTRODUCTION

II. DEFINITION OF WAGER III. CHARACTERISTICS IV. WAGERING CONTRACT V. ESSENTIAL FEATURES OF A WAGER

VI. SPECIAL CASES VII. AGREEMENT BY WAY OF WAGER

VIII. SECTION IX. CASE X. CONCLUSION

XI. BIBILOGRAPHY

INTRODUCTION:

A wager is illegal at common law. 15 C.30 . All wagering contracts are void by statute and money deposited with stakeholder is recoverable. Id.; 40 C. 336; 49 C. 128; 70 C. 490. What constitutes gaming contract in margin transactions in stocks; distinguished from speculating contracts. 48 C. 127; 63 C. 198. Contract of insurance upon another’s life may amount to mere wagering contract. 69 C. 511; 70 C. 647. Speculative stock transactions, where there is an option to demand delivery. 77 C. 508; Id., 518; 84 C. 694. Cited. 125 C. 120. Gambling on credit is the vice at which this statute and Sec. 52-554 are particularly directed. 189 C. 591. Parties’ contract is not unenforceable under section because it would be contrary to the statutory scheme as a whole to conclude that agreement to share the spoils of legal wagering is illegal and unenforceable. 293 C. 17.

Section is not applicable to written agreement where parties agreed to share equally in any winnings they received from various forms of legalized gambling. 105 CA 663; judgment affirmed on alternate grounds, refer 293 C. 17.

Where plaintiff sued to recover indebtedness from defendants, which claim arose from winnings from a bet made in violation of Sec. 53-298, held the court will not aid party to an illegal contract in enforcing his claim and, since all the parties were in pari delicto, judgment should be rendered for defendants. 26 CS 238. Cited. 33 CS 170; 35 CS 522. Money wagered is recoverable from stakeholder. 15 C. 31; 40 C. 336. Under former statute, a negotiable check given by the stakeholder to the winner for the amount wagered was void even in the hands of a bona fide holder. 36 C. 463. Legislation re gaming reviewed. 70 C. 490. Statute embraces all events mentioned in Sec. 52-553; allows recovery of money lost and paid in bet on a horse race. 100 C. 545. Not necessary to state details of bets in complaint. 125 C. 116. No credit for bets won by defendant. Id., 121. Claim for share of fund increased by betting in Rhode Island, though valid there, contravenes our public policy and cannot be enforced in our courts. 134 C. 52. Gambling on credit is the vice at which this statute and Sec. 52-553 are particularly directed. 189 C. 591.

Cited. 33 CS 170. Statute does not extend to legalized gambling authorized by Sec. 12-557 et seq. 37 CS 88.

What is WAGER?

A wager is a contract by which two or more parties agree that a certain sum of money or other thing shall be paid or delivered to one of them on the happening of an uncertain event or upon the ascertainment of a fact which is in dispute between them.

A contract in which the parties stipulate that they shall gain or lose upon the happening of an uncertain event in which they have no interest, except that arising from the possibility of such gain or loss.

FOR EXAMPLE :

I. A and B bet as to whether it would rain on a particular day or not A promising to pay Rs.100 to B if it rained, and B promising an equal amount to A , if it did not. This agreement is wager.

II. A and B agree to deal with the differences in prices of a particular commodity. Such an agreement is a wager.

CHARACTERISTICS:

From the above, we can state that a Wager must have the following characteristics:

a. It is a promise to pay money or money’s worth.

b. The promise depends upon the happening or not happening of an event.

c. The event upon which the promise is to depend is uncertain, the parties do not know the occurrence of the event.

d. None of the parties has a control on the occurrence of the uncertain event.

e. None of the parties has an interest in the occurrence or non-occurrence of the event. We can explain our point with the help of the following examples:-

1. On a cloudy day, A bets Rs. 10 with B that it will rain, B being of the view that it shall not rain. A says to B, if it rains he will receive Rs. 10 from B, but it is does not rain A shall pay Rs. 10 to B. It is a Wager.

2. A lottery is also a wager since it is a game of chance. An agreement to buy a ticket for a lottery is also a wagering agreement. When the lottery is authorized by the state, the person conducting the lottery is not punished, but that does not make the lottery a valid one, it remains a wagering transaction.

A wager may have all other requisites of a legal contract. It may have two or more parties’ consideration, subject matter and the identity of minds of the parties. But the peculiarity lies in its performance. Its performance is in the alternative, i.e., one party has to pay the amount to the other. Only one party is to gain and the other is to lose.

There is no difference between the expression ‘gaming and wagering’ used in the English Statute and repealed by Indian Contract Act XXI of 1848, and the expression ‘by way of wager’ used in this section.

Transactions which are not Wager :

1. Prize competitions, according to the Prize Competition Act, 1955 in games of skill, if the prize does not exceed Rs. 100. Crossword puzzle is such an example, since it depends upon the skill.

2. Games of skill like athletic competition, wrestling bouts.

3. Subscription or contribution or an agreement to subscribe or contribute, towards any prize, plate or sum of money to be awarded to the winners of the horse race.

4. Tezi Mandir transactions or deals in shares and stocks, where the party’s intention is to deliver the goods or securities.

5. Insurance contracts.

WAGERING CONTRACT:

‘A wagering contract is one by which two persons professing to hold opposite views touching the issue of a future uncertain event mutually agree independent upon the determination of that event, one shall win from the and the other shall pay or hand over to him, a sum of money or other neither of the contracting parties having any other interest ill that contract than the sum of stake he will so win or lose, there being ‘no other real consideration ‘for the making of such contract by either of the parties. It is essential to a wagering contract that each party may under it either win or lose, whether he will win or lose being dependent on the issue of the event, and, therefore, remaining ‘uncertain until that issue is known. If either’ of the parties may win but cannot lose, or may lose but cannot win, it is not a wagering contract.

ESSENTIAL FEATURES OF A WAGER:

The essentials of a wagering agreement may thus be summarized as follows:

(a) There must be a promise to pay money or money’s worth

(b) The promise must be conditional on an event’s happening or not happening

(c) The event must be an uncertain one. If one of the parties has the event in his own hands, the transaction is not a wager.

(d) Each party must stand to win or lose under the terms of agreement. An agreement is not a wager if one party- may only win and cannot lose or if he may lose but cannot win, or if he can neither win nor lose.

(e) No party should have a proprietary interest in the event. The stake must be the only interest which the parties have in the agreement.

Special cases:

We now turn to certain special cases in order to examine as to whether they are wagers:

Commercial transactions: Agreements for sale and purchase of any commodity or share market transactions, in which there is a genuine intention to ‘do legitimate business i. e., to give and take delivery of goods or shares, are not wagering agreements. If there is no such genuine intention and parties only want to gamble on the rise or fall of the market by paying or receiving the differences in prices only, the transaction would be a wagering agreement and therefore void. “In order to constitute a wagering contract, neither party should intend to perform the contract itself, but only to pay the differences”

Lotteries: A lottery is a game of chance. Hence the lottery business is a wagering transaction. Such a transaction is not only void but also illegal because 294-A of the Indian Penal Code declares ‘conducting of lottery a punishable offence. If a lottery is authorized by the Government, the only effect of such permission is that the persons conducting the lottery (i. e., the persons running the lottery and the buyer of lottery ticket) will not. be guilty of a criminal offence, but the lottery remains a wager alright (Dorabji Tata vs Lance).

Crossword puzzles: Where prizes depend upon a chance, it is ‘a lottery and therefore a wagering transaction. Thus a crossword puzzle, in which prizes depend upon correspondence of the competitor’s solution with a previously prepared solution, is a wager. But if prizes depend upon skill and intelligence, it is a valid transaction. Thus prize competitions which are games of skill and in which an effort is made to select the best competitor e.g., picture puzzles, literary competitions and athletic competitions are not wagers. Even in such competitions .the amount of prize should not exceed Rs 1,000; otherwise they shall be wagers as per the provisions of the Prize Competition Act, 1955.

Insurance contracts: Insurance contracts are valid contracts even though they provide for payment of money by the insurer, on the happening of a future uncertain event. Such contracts differ from wagering agreements mainly in three respects:

(a) The holder of an insurance policy must have an ‘insurable interest’ in the event upon which the insurance money becomes payable. ‘Thus contracts of insurance are entered into to protect an interest. In a wagering agreement there is no interest to protect and the parties bet exclusively because they can thereby make some easy money.

(b) Contracts of insurance are based on scientific and actuarial calculation whereas wagering agreements are a gamble without any scientific calculation of risks.

(c) Contracts of insurance are regarded as beneficial to the public, whereas wagering agreements do not serve any useful purpose.

AGREEMENT BY WAY OF WAGER:

Wager is a specified uncertain event which is not in the control of either party.

Wager is void because it promotes gambling.

Exceptions:

1) Horse racing

2) Lottery

SECTION :

Sec. 52-553. Wagers and wagering contract void. All wagers, and all contracts and securities of which the whole or any part of the consideration is money or other valuable thing won, laid or bet, at any game, horse race, sport or pastime, and all contracts to repay any money knowingly lent at the time and place of such game, race, sport or pastime, to any person so gaming, betting or wagering, or to repay any money lent to any person who, at such time and place, so pays, bets or wagers, shall be void, provided nothing in this section shall

(1) Affect the validity of any negotiable instrument held by any person who acquired the same for value and in good faith without notice of illegality in the consideration,

(2) Apply to the sale of a raffle ticket pursuant to section 7-172, or

(3) Apply to any wager or contract otherwise authorized by law.

Literally the word ‘wager’ means ‘a bet’ something stated to be lost or won on the result of a doubtful issue, and, therefore, wagering agreements are nothing but ordinary betting agreements.

Section 30 of the Indian Contract Act talks about wagering agreements, which reads as “agreements by way of wager are void”. The section does not define ‘wager.’ Section 30 states that,

“Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.”

Exception in favor of certain prizes for horse racing –

“This section shall not be deemed to render unlawful a subscription or any contribution, or

agreement to subscribe or contribute, made or entered into for or toward any plate, prize or sum of money, of the value or amount of five hundred rupees or upwards, to be awarded to the winner or winners of any horse race.”

Section 294A of The Indian Penal Code not affected –

“Nothing in this section shall be deemed to legalize any transaction connected with horse Racing, to which the provisions of S.294A of The Indian Penal Code (45 of 1860) apply.”

Section 30 of the Indian Contract Act 1872 declares wagering agreements as void. The section is as follows:

I. Agreements by way of wager void- Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide by result of any game or other uncertain event on which any wager is made.

II. Exception in favor of certain prizes for Horse racing—This section shall not be deemed to render unlawful a subscription or contribution, or agreement to subscribe or contribute, made or entered into for or toward any plate, prize or sum of money, of the value or amount of five hundred rupees or upwards, to be awarded to the winner or winners of any Horse race.

III. Section 294-A of the Indian Penal Code not affected—Nothing in this section shall be deemed to legalize any transaction connected with horse racing, to which the provisions of section 294-A of the Indian Penal Code apply.

IV. Section 30 only says that “agreements by way of wager are void”. The section does not define ‘wager’. Sir William Anson’s definition of ‘wager’ as a promise to give money or money’s worth upon the determination or ascertainment of an uncertain event, brings out the concept of wager declared void by section 30 of the contract act.

Essentials of Section 30:· Mutual chances of gain and lossThere must be two parties, or two sides, and mutual chances of gain and loss, i.e., one party is to win and the other to lose upon the determination of the event. It is not a wager where one party may win but cannot lose, or if may lose but cannot win, or if he can neither win nor lose, ‘if one of the parties has the event in his own hands, the transaction lacks an essential ingredient of wager.’ ‘It is of the essence of the wager that each side should stand to win or lose according to the uncertain or unascertained event in reference to which the chance or risk is taken.’

· Two parties

There must be two persons, either of whom is capable of winning or losing.

‘….you cannot have two parties or more than two sides to bet. You may have a multi partite agreement to contribute to a sweepstake (which may be illegal as a lottery if the winner is determined by skill), but you cannot have a multipartite agreement for a bet unless the numerous parties are divided in to two sides, of which one wins or the others loses, according to whether an uncertain event does not happen’.

· Uncertain EventUncertainty in the minds of the parties about the determination of the event in one way or other is necessary. A wager generally contemplates a future event; but it may even relate to an event which has already happened in the past, but the parties are not aware of its result or the time of its happening.

The first thing essential to wager is that the performance of the bargain must depend upon the determination of an uncertain event. A wager generally contemplates future events; but it may even relate to an event which has already happened in the past, but it may even relate to an event which has already happened in the past, but the parties are not aware of its result or the time of its happening.

· No interest other than stakeNeither party should have any interest in the happening of the event other than the sum or stake he will win or lose. To constitute a wager, the parties must contemplate the determination of the uncertain event as the sole condition of their contract. The stake must be the only interest which the parties have in the contract.

· Neither party to have control over the eventLastly, neither party should have control over the happening of the event one way or the other. “If one of the parties has the event in his own hands, the transaction lacks an essential ingredient of a wager.”

CASE: PEOPLE Vs. RAZE

[Crim. No. 4332. Second Dist., Div. Three. May 19, 1949.]

THE PEOPLE, Respondent, v. FLOYD E. RAZE, Appellant.

COUNSEL

Max Solomon and John J. Bradley for Appellant.

Fred N. Howser, Attorney General, and Kent C. Rogers, Deputy Attorney General, for Respondent.

OPINION

VALLEE, J.

Appellant was convicted of a violation of Penal Code, section 337a, subdivision 3, which provides that every person who, whether for gain, hire, reward, or gratuitously, or otherwise, receives, holds, or forwards, or purports or pretends to receive, hold, or forward, in any manner whatsoever, any money, or consideration of value, or the equivalent thereof, bet or wagered, or to be bet or wagered, or offered for the purpose of being bet or wagered, upon the result, or purported result, of any contest, or purported contest, of skill, speed or power of endurance between horses is guilty of a public offense. He appeals from the judgment and from the sentence imposed. [1] As no appeal lies from the sentence, that appeal is dismissed. (People v. Tallman, 27 Cal.2d 209, 215 [163 P.2d 857].)

On August 10, 1948, a police officer in civilian clothes entered the premises at 2800 North Figueroa Street, Los Angeles, which is a poolroom and bar. The following conversation occurred between the officer and appellant: Officer: "You were lucky not to have been taken with Bill." Appellant: "Yes, those dumb cops missed the best ones, Roy and I. I hid a bunch of markers under my shirt." Officer: "Well, give me two to win and two to show on 'Bill Bartlem' in the 8th at Del Mar." Appellant: "Okay." Appellant immediately went to the phone and the officer heard him phone that bet in. Appellant then said to the officer: "I know you had 'Mine', a winner, in the 5th, because I heard you give it to Roy. So you have money coming. And I'll put this bet under cash sales and you can collect tomorrow from Roy. Okay?" Officer: "Okay."

The officer went to the premises on August 11, 1948, at 3:30 p.m. and saw appellant. He testified: "This defendant was in this poolroom shortly after 3:30, a few minutes after, when I gave the first defendant, Mr. Cardno, a $2.00 show bet on 'Lady Lassitor' in the 4th at Del Mar. And defendant Cardno [91 Cal.App.2d 920] gave me change from the $5.00 marked bill, which I had given the defendant. And a few minutes after that, approximately a short time, well, Officer

Colbern and two other officers entered. Q. You did not make any bet with the defendant on the 11th, is that right? A. No. I didn't."

On cross-examination the officer testified:

"Q.] In other words, it has been your testimony you made wagers with all three of these men? A.] Yes.

Q.] Were the three of them ever present at one time at any of your visits there?

A.] I believe on the first day, the 8th, at about 4:00 o'clock in the afternoon this defendant just came to work, and the first defendant, Mr. Cardno, was just leaving work, and the manager, Roy, were all three there on that one time. On most of the occasions there were just two of them there.

Q.] On most occasions two of them were there together?

A.] Later bets, this defendant was there by himself"; that on the occasions he was on the premises there were other people there, approximately 12, either playing pool or sitting at the bar;

"Q.] Did you, besides this one man you described in one of the accidents when you were there, hear anybody ask for a wager on a horse? Did you hear anybody else make a wager?

A.] On the 9th there was a man seated beside me, made a wager, but I didn't hear the horse he asked for.

Q.] In other words, on all those occasions you were there you never did see, with the exception of this one person, you never did see anybody make a bet in there, did you?

A.] I didn't hear a specific horse named. I saw money pass.

Q.] Between whom did you see money pass?

A.] Between a very small individual who had a horse,--they evidently phoned in the wrong horse,--he had a $5.00 win bet on a horse that paid thirty-seven fifty, and he wasn't paid off because they had phoned in a different horse. And there was quite an uproar about it. That was on the 9th. Shortly before this Mr. Cardno was arrested.

Q.] However, you did not see any activity take place there other than what you have indicated, these two people, you did not see any wagers taken there, did you, besides yours?

A.] I saw money pass hands. ...

Q.] Were your wagers, these wagers you were talking about, ever written down on anything?

A.] No. Immediately after a wager was made, either one of the three defendants went to the phone and phoned it in. I never saw anything written down. ...

Q.] Officer, on these occasions when you saw money exchange hands, did you ever see the telephone used?

A.] Yes, sir. Immediately after some unknown man in there would hand one of the defendants bills, this person who took the money would [91 Cal.App.2d 921] immediately go to the phone and I didn't hear the conversation, so I can't say.

Q.] Approximately how many times did you see that occur?

A.] The first defendant, Mr. Cardno, I saw him go at least six times.

Q.] Let us just confine it to this defendant.

A.] This defendant, I saw him go three on the date I made my wager with him."

It was stipulated that a horse named "Bill Bartlem" was running at some track in the United States on August 10, 1948, and that the expression "$2.00 to win and $2.00 to show" indicated a wager.

The case was tried on the transcript of the preliminary. Appellant did not take the stand. The foregoing constitutes all of the evidence. Appellant did not object to the reception of any evidence.

[1]Appellant claims that –

(1) The corpus delicti must be proved by evidence other than the extrajudicial declarations of appellant, and

(2) there is no evidence of the corpus delicti other than the extrajudicial statements of appellant.

[2] Proof of the corpus delicti (that the specific offense charged has actually been committed by somebody) should be made prior to the presentation of evidence of admissions or confessions. The pronouncement found in some of the cases that the corpus delicti cannot be established by the extrajudicial statements and declarations of the accused is not an accurate statement of the rule. The rule is limited to admissions and confessions. (8 Cal.Jur. § 248, p. 167.) Where the gist or essence of the offense charged consists of statements or declarations of the accused,--that

is, where statements or declarations of the accused are essential in order to establish that the specific offense charged was committed,--such statements and declarations are admissible as proof of the corpus delicti. There are many criminal offenses predicated upon fraud, such as false pretenses by fraudulent representations (now called theft in this state, Pen. Code, § 484) in which the corpus delicti obviously cannot be established without proof of statements or declarations of the accused.

[3] Proof of the corpus delicti in the case at bar was established upon evidence that somebody "gratuitously, or otherwise" received, or purported or pretended to receive or hold, "in any manner whatsoever," any money or consideration of value or the equivalent thereof to be bet or wagered, or offered for the purpose of being bet or wagered, upon the result or purported result of a horse race. The evidence as to what occurred [91 Cal.App.2d 922] on August 10, 1948, established not only the corpus delicti but also appellant's connection with the offense. Appellant accepted a wager of $2.00 to win and $2.00 to show on "Bill Bartlem" a horse running in the 8th race at Del Mar on August 10, 1948. That he did not receive cash is of no consequence. He pretended and purported to receive the equivalent of money, a profit which the officer had made on another race which was held by his associate who was taking wagers on the same premises. The court was warranted in inferring that appellant and his two associates were acting in concert operating a bookmaking establishment and that money held by appellant's associate was held by appellant. Statements made by appellant to the officer were admissible as proof of the corpus delicti. The corpus delicti was established. The conviction of appellant was not a miscarriage of justice.

Judgment affirmed.

CASE: GHERULAL PARAKH vs. MAHADEODAS MAIYA AND ORS. (29 January 2013)

FACTS:

Plaintiff and defendant entered into Partnership agreement with object of entering into wagering transactions with obligation to bear equal loss or profit arising out of such partnership. When plaintiff asked for reimbursement of half of money paid by him to discharge losses of partnership, defendant alleged that the agreement made between them was illegal and unenforceable on account of S.23

ISSUE:

Whether the alleged Partnership agreement was either forbidden by law, or opposed to public policy or immoral so as to render it void abolition?

HELD:

(i) Void agreements cannot be equated with illegal agreements. The law may actually forbid an agreement to be made or it may merely refuse to enforce an agreement. In former case, it is illegal in latter it is merely void, in as much as all illegal agreements are void but not all void agreements are illegal or forbidden by law.

S.30 of ICA is based on provisions of Gaming Act, 1845 in England which rendered both primary agreements of wagering and any substituted agreement for recovery of money alleged to be won on any wager as void but, secondary agreements in respect thereof enforceable. Therefore any wagering agreement though is void and unenforceable but is not forbidden by law, therefore the object of any collateral agreement upon wagering isn’t unlawful within the ambit of S.23 of ICA, hence is valid and subsisting between the parties.

In present case, parties had no interest to take delivery of the goods rather were only dealing with difference in prices such that they mutually intended the transaction to be of the nature of wager. Though wagers are void u/s 30 of ICA but cannot be considered as forbidden by law u/s 23 for a person entering into wagering transactions does no legal wrong but only fails to get protection of law in enforcing those transactions. Hence any collateral agreement with the object of wagering cannot be declared to be void due to ‘object forbidden by law’ u/s 23, and is subsisting between the parties.

(ii) Any agreement which tends to be injurious to/against interest or conscience of public at large is said to be opposed to public policy. It is a branch of common law and unless a particular principle of public policy is recognized by that law, Courts cannot invent a new head of public policy. The ordinary function of Court is to rely on the well settled heads of public policy and to apply them to varying situations unless harm to public interest is substantially incontestable.

The policy of law in India is to sustain the legality of wagers, as in common law, though rendering them void and unenforceable. Not even in a single case, SC said, had Courts in India pr in England struck down any wagering contract as ‘opposed to public policy’. Indeed some of the gambling transactions are a perennial source of income to the state. Hence, it cannot be said that wagering is opposed to public policy and therefore, partnership agreement formed with object of wagering was not unlawful for its object being opposed to public policy u/s 23.

SC further remarked, “Even if it is permissible for Courts to evolve a new head of public policy under extraordinary circumstances giving rise to incontestable harm to society, wager isn’t one of such instance of exceptional gravity for it has been tolerated by public and state alike.”

(iii) Immorality u/s 23 should be confined to cases of sexual immorality like agreements for concubinage, sale or hire of things to be used in a brothel, marriage for consideration; agreements facilitating divorce, etc. are all immoral in nature. This limitation on meaning of word ‘immoral’ as in S.23 is because of reasons: Firstly, its juxtaposition with equally wide concept of ‘public policy’ in S.23 highlights legislative intent to give it a narrow meaning otherwise it will lead to overlapping of two concepts; secondly, the phrase “Courts regard it as immoral” as in S.23 highlights immorality is also a branch of common law and must be confined to principles recognized and settled by Courts; Thirdly, case law in England and in India confines its operation to sexual immorality.

Since present case revolves around wagering which cannot be regarded as sexually immoral, hence, it is not under realm of immorality as given u/s 23 of ICA.

Therefore partnership agreement formed with the object of entering into wagering transactions is enforceable, valid and subsisting for its object of wagering isn’t unlawful u/s 23 because it is neither forbidden by law, nor opposed to public policy, and nor immoral.

Agreements Collateral to Wagering Agreements:

Contract collateral to a wagering agreement is not necessarily unenforceable. Section 30 of the Contract Act is based upon the provisions of S. 18 of the (English) Gaming Act 1845, and though a wager is void and unenforceable, it is not forbidden by law. Therefore the object of a collateral agreement is not unlawful under s 23 of the contract act. But it is otherwise under the (English) Gaming acts of 1845 and 1892, the acts being wider and more comprehensive in phraseology, because they expressly render void even collateral transactions. As a result, though an agreement by way of wager is void, contract collateral to it or in respect of a wagering agreement is not void except in Bombay state. There is nothing illegal in the strict sense in making bets. They are merely void and there would be no illegality in paying them or giving a cheque, but payment cannot be compelled. But an arbitration clause in a wagering contract is a part of the contract and not collateral to it and cannot therefore be enforced.

A collateral agreement is not unlawful under s 23 of the contract act.

Apart from Bombay enactment, there is no statute declaring void agreements collateral to wagering contract. Nor is there anything in the present section to render such agreements void. The policy of law in India has been to sustain the legality of wagers and not to hit at collateral contracts. It has accordingly been held that a broker or an agent may successfully maintain a suit against his principal to recover his brokerage, commission, or the losses sustained by him, even though contracts in respect of which the claim is made are contracts by way of wager.

The Supreme Court has held that if agreement collateral to another or of aid in facilitating the carrying out of the object of the other agreement, which though void, is not in itself prohibited within the meaning of s 23 of the contract act, may be enforced as collateral agreement. If on the other hand it is part of a mechanism to defeat what the law has actually prohibited, courts will not countenance a claim based upon the agreement because it will be tainted with an illegality of the object sought to be achieved, which is hit by s 23 of the contract act. An agreement cannot be said to be forbidden or unlawful merely because it

results in a void contract. A void agreement when coupled with other facts may become part of a transaction which creates legal rights but this is not so if the object is prohibited.

In England also, agreements collateral to wagering contracts were not void before the enactment of the gaming act 1892. Thus in Read v Anderson a betting agent, at the request of the defendant, made bets in his own name on behalf of the defendant. After the bets were made and lost, the defendant revoked the authority to pay conferred upon the betting agent. Notwithstanding the revocation, the agent paid the bets, and sued the defendant having empowered the agent to bet in his name, the authority was irrevocable, and that the agent was entitled to judgment. The statute of 1892, passed in consequence of this decision, is almost to the same effect as the Bombay act. It is interesting to note that the statute was not passed until 27 years after the Bombay act. It is hoped that in future, the revision of the contract act will corporate provisions of the Bombay act in the present section, so as to render the law uniform on this subject in the whole of India.

CONCLUSION :

As section 30 of the Indian Contract Act 1872 reads about agreements by way of wager, void. Further The Contract Act does not define what constitutes a wager or a wagering agreement. It only mentions that such agreements will be void and unenforceable and no action can lie to either recover anything that is due under a wager or for performance of a contract that is in the nature of a wager. A wager is in the nature of a contingent contract but is prevented from being enforceable by Section 30.

BIBILOGRAPHY

I have completed this project with the reference of following online resources :

www.lawjustice.com

www.Indiancaselaws.wordpress.com

www.Indiancaselaws.org

www.legalserviceindia.com

elearning.sol.du.ac.in