Radheshyam Ramjilal vs Sitaram Narayanprasad

Shiv Dayal, J.

This revision is directed against a decree passed by the Civil Judge, Class II, Baloda Bazar, in favour of Sitaram against Radhesbyam, for the recovery of Rs. 200.

The Petitioner borrowed from the Plaintiff a sum of Rs. 50 on October 26, 1960, and another Bum of Rs. 150 on February 12, 1960, for which he executed two documents (Exs. P-1 and P-2) on which this suit was based. Execution of both the documents and the loans were admitted by the Defendant. The suit was resisted on the ground that the loans had extinguished. There was betting between the parties on or about September 19, 1961, in which the Plaintiff lost and the said loans were satisfied by a notional payment of the stake of Rs. 200. The bet was whether the railway station Pandurti comes before or after the railway station Ankapali while travelling from Raipur via Waltai. According to the Defendant, Pandurti was before Ankapali, while the Plaintiff thought otherwise. A stake of Rs. 200 was fixed. Both the parties then went to the Station Master of Bhatapara Railway Station, who by reference to the official record decided the dispute in favour of the Defendant. The parties came back from the railway station and the Plaintiff then declared that he would adjust the amount of stake in full satisfaction of the debts due to him. These facts have been found proved by the trial Judge and there is nothing to disturb his finding.

The question is whether the Plaintiff''s suit should have been dismissed because of the subsequent event of betting. It cannot be doubted that in the betting which took place on the 19th September, the Plaintiff promised to pay Rs. 200 to the Defendant, if the latter was right and the former was wrong. The Plaintiff lost the bet. It is argued by Shri Jakatdar that this is not a case of wager inasmuch as there could be no uncertainty about the location of the stations; that stations were where they are. This contention is devoid of substance. It is quite true that there could be no speculation as to the location of two railway stations like an uncertain event which may happen one way or the other, but the uncertainty lay in the minds of the parties who betted. The Plaintiff was certain that Ankapali came first, while the Defendant was also certain that Pandnrti came first. Each of them thought that the other was wrong. Undoubtedly, one of them was wrong; but both of them could not be-wrong. In other words, both of them could not win-both of them could not lose-at the same time. The uncertain future event was the decision on ascertainment. This constituted the uncertainty, and therefore, a wager. A wagering contract was defined by Hawins J., in the leading case of Carlill v. Garbolic Smoke Ball Go. (1892) 2 Q.B. 484 (490) in these terms:

A wagering contract is one by which two persons, professing to hold opposite views touching the issues of a future uncertain event, mutually agreed that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in 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.

This is an accepted definition. There must be two parties. As said by Bussei L.J., in Eilesmera v. Wallace (1929) 2 Ch. 1 (52) "You cannot have more than two parties or two sides to a bet." It is further essential that the only interest which the parties have in the contract is the winning of the stake. and it is also essential to a wagering contract that each party must either win or lose under it. When it is said that the parties to a wager must profess opposite views, it does not necessarily mean that either party must avow or does avow to the other that he holds a particular opinion upon the event in question. A person may be betting against what he believes the issue will be, and avow the fact, it is nonetheless a bet, e. g., at a horse race. The profession of the opposite views really lies in the fact of the difference in their hope, expectation or opinion that will belie the odds. The stake of each party i3 that which is at hazard between them and which quantifies the whole interest of both the parties in the event.

In ordinary parlance, gaming contracts and wagers are considered as interchangeable terms. In the strict sense of the term, ''gaming'' means playing a game whether of chance or of skill for stakes hazarded by the players. Mutual promises as to the transfer of the stake upon the result of a game constitute a gaming contract. If the parties or sides of such a contract are only two, it may itself be a wager. Wager is necessarily a bipartite agreement, but not so a gaming contract. "Betting" has been treated as co-extensive with wagering. It is stated in 18 Halsbury (Simonds) 169:

The distinction between a gaming contract and wagers is not of importance between the immediate parties to them, but a material distinction between gaming contract and wagers upon games on the one hand and wagers not upon games on the other band remains as regards security for the money involved.

Under Section 30 of the Contract Act, a wagering oontraot is void, though not illegal. As such it is unenforceable at law. The agreement to pay the amount lost on a wager is invalid and unenforceable.

The real contention advanced for the Defendant is that since a wagering is void but not illegal and since the Defendant, in this case, has not come to the Court seeking realization of the stake and he only pleads repayment and challenges a right to return of the stake amount already paid by "adjustment", his defence that there are no loans subsisting cannot be thrown out on the ground of wagering. It is true that betting is not illegal, but the law is unwilling to assist enforcement of the obligation arising out of it. See, for instance, Gujjer Nauth Sew Bux v. Ramdayal ILR 9 Cal.791; and Walter Mitchell Vs. A.K. Tennent, . It is undoubted law that a suit is not maintainable for the recovery of the stake if the loser of the bet does not pay it to the winner. It is then to be examined whether the loser having paid to the winner the lost bet can bring an action for its return. This question too presents no difficulty. Section 65 of the Contract Act doe not come to his aid, because the contract was void ab initio; it does not subsequently become void nor is subsequently discovered to be void. It is held in Chhanga Mal Vs. Sheo Prasad, , that money deposited as security in respect Satta transactions cannot be recovered u/s 65 as that section has no application to such transactions. A suit to recover such a deposit cannot be maintained. See also Firm Sagarmal v. Biehambar Sahai AIR 1947 All. 14 (16-16).

Nor is a suit for the recovery of the money lost in betting, which has already been paid to the Defendant, maintainable u/s 72 of the Contract Act. That section enacts that a person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it. No doubt, it is settled law that the word ''mistake'' in this section includes both mistakes of fact and mistakes of law. See AIR 1949 297 (Privy Council) , approved by the Supreme Court in Sales Tax Officer v. Kanhaiya Lai AIR 1969 SC 135. There must be a mistake as regards the nature of the transaction. In the present case, there was no such mistake in the mind of the Plaintiff. He knew that it was a wager.

There is no other provision under which the loser of a bet, having actually paid the stake to the winner, can sue him for the return of the money so paid. The law in England is the same. If the loser of a bet pays the sum lost to the winner, he is, despite Section 18 of the Gaming Act, 1845, unable to recover it. It was observed by Bowen L.J. in Bridger v. Savage (1865) 15 QBD 363 (367):

If the person who has betted pays his bet he does nothing wrong; he only waives a benefit which the statute has given to him, and confers a good title to the money on the person to whom he pays it. Therefore, when the bet is paid the transaction is completed.

It is stated in Cheshire and Fifoot, Fourth Edition, page 259:

It is void, though not illegal. It confers no rights upon either party. If the loser fails to pay, recovery cannot be enforced by action, whether brought for the amount of the bet or on an account stated. If he stops a cheque which he has given for the amount, he cannot be sued. If he pays the winner in cash or gives him a cheque which is honoured, it might be expected that, as the contract is void and the payment therefore made without consideration, be should be entitled to recover the money. The law does not take this view. The Act is apparently treated as conferring a privilege which the loser may waive-if he pleases, and payment constitutes waiver.

But here an altogether different situation presents itself. This is neither a suit by the winner (defendant) for realisation of the stake from the loser (plaintiff) nor a suit by the loser for recovery of the stake already paid. There was no actual payment in cash; not even by return of the documents of the loans. The loans were agreed to be satisfied, as if, by adjustment of the stake; parties agreed, by mere word of mouth, to be quits. Shri Jakatdar contends that this part of the transaction wherein the Plaintiff said that the loans were deemed to be squared with the stake, was a ''collateral transaction'' so that although the initial betting was not enforceable, the collateral transaction was. Reliance is placed on Bhagwandaa v. Deochand 1951 NLJ 487 : AIR 1951 Nag. 392 : ILR 1951 Nag. 487 (493) and also on Kishan Lal and Another Vs. Bhanwar Lal, . Counsel also cited Hajee Ally Mohamad Banvard v. Moolla AIR 1929 Rang. 241 and Sadia v. Ambhiria AIR 1944 Mad. 321. In my opinion, these decisions are not apposite here. The Nagpur decision and the Supreme Court authority are both about forward transactions. I am unable to accept Shri Jakatdar''s argument that this was a collateral transaction. It seems to me undoubted that the Plaintiff''s declaration of adjustment was an integral part of and is inseparable from the winning and losing of the bet. This declaration of the Plaintiff had for its consideration nothing except the earlier promise that he would pay Rs. 200 if he lost the bet. If the Plaintiff had not so declared but the Defendant had himself adjusted the bet he won towards the suit loans he owed, it would have been a mere distinction without difference. A wagering debt otherwise irrecoverable cannot be made the basis of a claim under the guise of an account stated. Such an action will be struck out. See Alberg v. Chandler (1948) 64 TLR 394, Day v. William Hill (Park Lane) Ltd. (1949) 1 KB 632. It is succinctly stated in 18 Halsbury (Simouds) 173:-

A promise to pay a gaming or wagering debt, even although it is made under a fresh contract supported by fresh consideration, is unenforceable in the same way as the original debt. An account stated in respect of gaming transactions cannot be made the basis of an action. Law v. Dearnley (1950) 1 KB 400, C.A.; and it is a contempt of Court to bring such an action without disclosing that the account is stated in respect of such transactions: R. v. Weise, Ex parte Hector MacDonald, Ltd., (1961) 2KB 611, D.C.,

In Hill v. William Hill (Park Lane) Ltd., 1949 AC 630, the Appellant, who had lost to the Respondents bets which he was unable to pay, was reported by them to the committee of Tattersalls. The committee decided that he should pay a fixed sum by way of immediate instalments, but he was unable to comply with the order. The Appellant contended that the agreement was unenforceable as the promise was a promise to pay money won upon a wager. The House of Lords, held that the promise sued upon was a promise to pay the unpaid balance of a betting account in accordance with the committee''s order and, therefore, that this was a claim which could not be enforced by legal proceedings notwithstanding the new agreement. By this decision the House of Lords overruled Eyams v. Stuart King (1908) 2 KB 696 C.A., the correctness of which was doubted earlier by Denning L.J. in William Eill (Fark Lane) Ltd. v. Rose (1948) 2 All E.R. 1107 (1112). See also Anson''s Law of Contract, (21st Edition) page 325, where three situations have been considered, relevant here being the second.

The position of the law may then be summed up as follows: (1) Where there are only two parties, "betting" is wagering within the meaning of Section 30 of the Contract Act. (2) Wagering is void though not illegal. (3) A suit does not lie for recovering the stake from the loser. (4) Where the loser pays the bet money or transfers property or performs services pursuant to a wagering contract; no action lies: ex turpi cause non oritur actio: money paid cannot be reclaimed; property transferred cannot be recovered; services rendered need not be paid for. (5) If there is a second contract collateral to the wagering contract, such a transaction is itself void, if it merely restates the earlier void agreement and is supported by no other consideration. "If a new promise has the same quality as the original promise, then the new promise has no consideration because it adds nothing," (to borrow the words of Denning L.J.,) in William Eill (Part Lane) Ltd. v. Rose (1948) 2 All E.R. 1107 (1112).

Applying these principles to the facts and circumstances of the present ease, there being no other consideration, the subsequent agreement - even if it is assumed to be a collateral contract-is itself void and unenforceable. In my judgment, the betting, winning and losing, and the talk on return from the railway station that the stake was squared with the two loans due by the Defendant, all formed but integral and inseparable parts of a single transaction. That being so, the Plaintiff is entitled to avoid the whole transaction, including his word of mouth that the amount was to be deemed as if paid and adjusted towards the debts recoverable by him. If the Plaintiff can repudiate and avoid the entire transaction, as I firmly think he can, the net result is that the bet is wiped off while the loans survive. In this view of the matter, the Plaintiff''s suit has been rightly decreed in his favour.

The revision is dismissed with costs. Counsel''s fee Rs. 25.