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Dayabhai Tribhovandas Vs. Lakhmichand Panachand - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Judge
Reported in(1885)ILR9Bom358
AppellantDayabhai Tribhovandas
RespondentLakhmichand Panachand
Excerpt:
wagering contract - suit to recover deposit paid on such contract--contract act (ix of 1872), sections 22, 24--30 and 65--bombay act iii of act 1865, section 1--in pari delicto potior est conditio possidentis--application of the maxim--plait, amendment of--deceit--unilateral mistake. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande & p.b. varale, jj] caste certificate petitioner seeking appointment against the post reserved for member of schedule tribe his caste certificate was invalidated subsequently held, his appointment would not be protected. the..........affected by the general provisions contained in sections 24 to 30 of the contract act, regarding 'void agreements'. it is not itself expressly repeal, and must now be read with section 30 of the contract act.9. but the provisions of the bombay act were primarily intended to apply, and can, we think, be properly applied, in the case of principals only to agreements, which, in the contemplation of both the parties, are strictly, wagers. to constitute a wager the transaction between the parties must 'wholly depend on the risk in contemplation,' 'and neither must look to anything but the payment of money on the determination of an uncertainty' (anson, law of contract, 3rd ed., p. 172). but if one of the parties has 'the event in his own hands,' the transaction lacks an essential ingredient.....
Judgment:

Birdwood, J.

1. The plaintiff sued to recover a sum of Rs. 100 paid to defendant, as a deposit, on account of the value of the dividends on 50 shares in the original capital of the Empress Spinning and Weaving Company, alleged to have been purchased by plaintiff for the period from the 1st June, 1880, to the 31st December, 1881. The defendant was the owner of the shares, and the alleged purchase was at the rate of Rs. 37 for each dividend. It is stated in the plaint that, when making the purchase on the 21st January, 1882, the plaintiff was under the impression that a dividend would be declared after that date; whereas it had already been declared on the 17th January, 1882.

2. From the evidence, it appears that the dividend declared was at the rate of Rs. 25 for each share.

3. The plaintiff asked that the deposit should be returned to him with damages, amounting to Rs. 6, for the wrongful detention of the money, on the ground that the contract of purchase must (on account of his ignorance of the fact, that when it was made a dividend had been already declared) be held to be 'cancelied' or 'void.'

4. The plaint does not set forth any ignorance on the part of the defendant; nor, on the other hand, does it impute knowledge to the defendant of the fact that a dividend had been declared, and charge him with a fraudulent concealment of the fact from the plaintiff.

5. We think that the plaint should, in the first instance, have been returned for amendment on the ground that it did not disclose a cause of action. It should either have alleged a mistake, common to both the parties, as to an essential matter of fact, by which the agreement between them was rendered void, and on the discovery of which the deposit' was claimed, presumably under Section 65 of the Indian Contract Act, 1872; or else, relief should have been claimed, (if that was really plaintiff's case), on the ground that he had been induced to enter into the agreement by the fraud of the defendant. The mere circumstances, that the contract was 'caused by one of the parties to it being under a mistake as to a matter of fact,' would not have made the con-tract voidable. See Section 22 of the Contract Act.

6. The plaint was not, however, returned for amendment; but the following issues were recorded by the Court of Small Causes apparently without objection from either party:

(1). Whether the contract between the parties was in the nature of a wagering contract?

(2). Whether the contract between the parties was entered into on the 19th or 21st January, 1882?

(3). When was the dividend of the Empress Mill declared?

(4). If it was declared on the 17th January, 1882, was the same within the knowledge of the defendant at the time when he entered into contract with the plaintiff?

(5). Whether the plaintiff is entitled to the refund of the earnest money?

7. After taking evidence, the Judge of the Court of Small Causes found on the first issue that the contract was a wagering contract and, on that ground, and without trying the remaining issues, he rejected the claim and directed each party to bear his own costs.

8. If the Judge's finding on the first issue be accepted as correct, for the purposes of this application, then the agreement between the parties was one merely 'to pay differences,' and not one directed to a commercial object. It was, therefore, void under Section 30 of the Contract Act. But it does not follow that, if the plaint had been properly framed, the prayer contained in it must necessarily have been refused. If the plaintiff really sought to avoid the contract on the ground of a mistake as to a matter of fact, common to himself and the defendant, but if, nevertheless, the agreement between them was really a wager, then, indeed, Section 65 of the Contract Act would, apparently, have had no application to the case; for if the agreement was one merely to pay differences, its nature must necessarily have been known to the plaintiff and defendant at the time when they entered into it, and they must be presumed to have known also that it was void. To such an agreement, so known to be void, Section 65 does not, in terms, apply. And, again, under the supposed circumstances, Section 1 of Bombay Act III of 1865 would have been a bar to the suit. That Act was intended to apply to suits upon contracts collateral to wagering transactions. It declares all contracts made to further or assist the entering into, effecting, or carrying out of agreements by way of gaming or wagering and all contracts by way of security or guarantee for the performance of such agreements or contracts to be null and void; and it prohibits suits for the recovery of sums paid or payable in respect of any such contracts; but it also applies to suits between the principles themselves to such contracts, and prohibits suits for the recovery of sums paid or payable in respect of any agreement by way of gaming or wagering, as well as suits for sums paid in respect of the contracts collateral to such agreements. Although Bombay Act III of 1865 is to be read and taken as part of Act XXI of 1848, which is expressly repealed by the Indian Contract Act, 1872, it cannot be held to be thereby repealed, by implication. Its provisions, being of a special character, and applicable only to the Bombay Presidency, are not affected by the general provisions contained in Sections 24 to 30 of the Contract Act, regarding 'void agreements'. It is not itself expressly repeal, and must now be read with Section 30 of the Contract Act.

9. But the provisions of the Bombay Act were primarily intended to apply, and can, we think, be properly applied, in the case of principals only to agreements, which, in the contemplation of both the parties, are Strictly, wagers. To constitute a wager the transaction between the parties must 'wholly depend on the risk in contemplation,' 'and neither must look to anything but the payment of money on the determination of an uncertainty' (Anson, Law of Contract, 3rd ed., p. 172). But if one of the parties has 'the event in his own hands,' the transaction lacks an essential ingredient of a wager. If the plaintiff's real contention was that defendant was aware of a declaration of dividends, at Rs. 25 per share, and by keeping plaintiff in ignorance of the fact, induced him to enter into a wagering agreement for payment of differences at a contract rate of Rs. 37 per share, then we think that to a suit for the recovery of a deposit made to defendant, with reference to such an agreement, Bombay Act III of 1865 has no application. Nor do we think that such a suit would be barred by the maximum in pari delicto potior est canditio possidentis. In Thistlewood v. Cracroft and Darky 1 M.& S. 600 the plaintiff sought to recover a sum of money lost by him at play under the following circumstances. He was a stranger to the defendants, and had gone to a gaming house in St. James' Street, at an early hour in the morning, and proposed to pay with Cracroft at hazard for a larger sum than he chose to play for, 'whereupon Darley, with whom C. had no previous communication, and whom he only knew by name, proposed to 0. that each of them (C. and D.) should put down 50, and so form a bank to meet the losses that might ensue from playing for such high stakes, and that the profits and losses should be borne and divided equally between them. After playing for some time, they desisted, when it was found, upon reckoning up the money in the bank, which had never been removed from the ,table, or out of sight during the time of playing, that the defendants had jointly won from the plaintiff 841, which they divided between themselves according to the agreement, after making a deduction of 126 for money lost by them to two persons in bets relating to chances in the course of the play, and another of 7 for the waiters. The plaintiff threw the dice himself during the whole time; and the money was won fairly in the course of play.' At the trial before Lord Ellen-borough, the defendants relied on the rule potior est conditio possidentis. His lordship inclined to this opinion, but directed the jury to find for the plaintiff for 708, reserving liberty to defendants to move on this point. Accordingly, a rule nisi was obtained for setting aside the verdict. It was made absolute on the ground that there had been fair play between the parties, and both were equally delinquent.

10. Lord Ellenborough, C.J. observed, however: 'If the Court discovered any traces of foul play in this case, so as to form a shade of delinquency between these parties, by making it a case of oppression or fraud upon one, they would eagerly have interfered in order to administer relief '; and Le Blanc, J. said: 'The transaction, no doubt, was illegal, but there seems to be no imputation of foul play, to entitle the plaintiff to ask for relief.'

11. These remarks would apply with special force in the present case, inasmuch as neither by Section 30 of the Contract Act, nor by any other law in force in India, are wagering agreements rendered illegal, whether by express prohibition or by penalty. They are simply destitute of legal effect or void, That distinction was upheld in Parakh Govardhanbhai v. Ransordas 12 Bom. H.C. R. 51. That was a decision under Act XXI of 1848, and is applicable to oases under the present law.

12. From the way in which the issues Were framed in this case, it would appear that plaintiff really imputed to-defendant a fraudulent concealment of facts, by which he was induced to enter into an agreement with him, and make the deposit in respect of which this suit has been brought. We are of opinion that the decision of the lower Court must be reversed, in order that the plaintiff may be given the opportunity of amending the plaint, if so advised, so as to show that his action is really one for deceit, And if he so amends the plaint, the proper issues should be raised and tried.

13. The decision of the Court of Small Causes is, therefore, reversed. and the case remanded for re-trial with reference to the foregoing observations. Costs, including costs of this application, to follow the final decision.


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