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Ramchandra Shivdar Vs. Gangabison Jaideo - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case Number O.C.J. Suit No. 2 of 1908
Judge
Reported in(1910)12BOMLR590
AppellantRamchandra Shivdar
RespondentGangabison Jaideo
DispositionAppeal dismissed
Excerpt:
indian contract act (ix of 1872), section 30-bombay act iii of 1865-wagering contracts-teji mandi transactions.;teji mandi transactions are in the nature of gambling transactions.; the prohibition contained in section 30 of the indian contract act, 1872, applies only to the case of winners. a person who has won a wager or a bet cannot sue to recover the amount deposited by the loser with the stake-holder.;under the general law of wagering.administered in england and india (with the exception of the bombay presidency), an agent who has received moneys on behalf of his principal-must pay those moneys to the principal even though the contracts under which he received them were not only void but actually illegal.;the bombay act iii of 1865 embraces not only every conceivable form of wagering..........question i have to answer is whether the transactions which resulted in the balance of 1905 were wagering transactions. the burden of proving this lay upon the defendant. there is nothing beyond the deposition of raghunath and the entries in the books bearing directly upon the point. it is apparent from the books of both the parties that the whole course of dealings between the plaintiff and the defendant were teji mandi or nuzzerana. if the description given by raghunath of teji mandi transaction is even approximately accurate, then such transactions must be essentially gambling, for according to raghunath they leave it open to one party to be either a buyer or seller on due date as best suits his interests. i gather from the evidence of raghunath and the comments of counsel that.....
Judgment:

Beaman, J.

1. This is a suit on an adjustment of January 1905 showing a balance in plaintiff's favour of Rs. 3080.

2. The defence is two-fold : (1) that the adjustment represents the sum of purely gambling transactions and therefore the balance cannot be recovered at law; (2) if the Court does not find that this is so, then the defendant claims to have paid off the balance found due on the adjustment in full.

3. The first question I have to answer is whether the transactions which resulted in the balance of 1905 were wagering transactions. The burden of proving this lay upon the defendant. There is nothing beyond the deposition of Raghunath and the entries in the books bearing directly upon the point. It is apparent from the books of both the parties that the whole course of dealings between the plaintiff and the defendant were Teji Mandi or Nuzzerana. If the description given by Raghunath of Teji Mandi transaction is even approximately accurate, then such transactions must be essentially gambling, for according to Raghunath they leave it open to one party to be either a buyer or seller on due date as best suits his interests. I gather from the evidence of Raghunath and the comments of counsel that these curious Teji Mandi or Nuzzerana transactions are of the nature of betting on or against the comparative stability of the market. One party, for example, bets that the market will not rise or fall more than say Rs. 40 on certain day. The Tejimandiwalla on the other hand bets that it will. If on the due date the fluctuations of the market either up or down exceed Rs. 40, the Tejimandiwalla wins if not the other party who has backed the market wins. Such I understand to be roughly the nature of these transactions. Judging further by the quality of the evidence given by the plaintiff and the defendant, judging too by the admitted status of the defendant, I feel no doubt-and I had never much doubt throughout the case-that the whole of these transactions were pure unadulterated gambling.

4. That conclusion is not in the least shaken by the evidence given in the case by Keshav Balkrishna, the clerk of Prior De Saone & Co. Whatever may have been the nature of Prior De Saone & Co.'s dealings with the defendant, 1 am perfectly sure that in his Teji Mandi dealings with the plaintiff on the one hand and third parties on the other, the defendant and his clients were only gambling and were well aware that they were doing so.

5. I start then from the finding that all the transactions which have been laid before me in this suit were gambling transactions-It remains to consider whether the defendant is nevertheless liable in law to the plaintiff. First it is contended that the defendant in relation to all these dealings with the plaintiff has filled the position of a Pucca Adatya. It is argued that standing thus in the character of an agent he is bound to account to the plaintiff for anything that he may have received from undisclosed parties on the plaintiff's account; and that he is equally liable whether such payments were made in respect of good or bad contracts. I am quite convinced upon the defendant's own admission that he did act throughout as plaintiff's agent and that the running account disclosing profits and losses made upon these transactions is an account of moneys either had and received for the plaintiff or paid on his account, But the plain- tiff's case rests upon a special foundation. It is contended that upon the true understanding of Exh. 3, it will appear that the balance in plaintiff's favour shown in the adjustment of January 1905 to be Rs. 3080 is what remains from the sum of Rs. 5,426 paid by the plaintiff in cash as margin money on the nth February 1904. To arrive at that result it is necessary to accept the ingenious theory put forward by the plaintiff explaining the ' somewhat entangled figures. The root of that theory is that the sum of Rs. 5,497 shown to the plaintiff's credit at foot of the account ought to-appear at the head of it. This sum represents what stood to the plaintiff's credit at the close of the preceding year and therefore as a matter of correct book-keeping ought to open the account of the year following. If this be done the sum of Rs. 5,000 paid to the plaintiff on the nth February 1904 may reasonably be taken to be a payment on account of that overdue balance, and that the sum of Rs. 5,426 paid in by the plaintiff on the same day may again be reasonably taken to be a cash-deposit to cover future margin. The defendant's-explanation is that the sum of Rs. 5,497 had not been arrived at on the nth February 1904 as the accounts for the preceding year had not then been made up. He says that Rs. 5,426 was deposited in cash as margin money on the nth February but as he declined to enter into any forward dealings at that time the plaintiff immediately withdrew Rs. 5,000. I have no hesitation in accepting the plaintiff's theory of this account. Every circumstance appears to me to point to its truth. If the explanation given by the defendant were correct it is difficult to account for the fact that we immediately find a record of precisely that kind of transactions which he says he had declined to enter into. Further, it was admitted that the sum of Rs. 5,426 was deposited in cash as margin money by the plaintiff. It was only at a later stage that an attempt was made to show that this cash deposit was almost entirely withdrawn the very day it was made. I find then that Rs. 5,426 was a cash deposit and that the adjustment of January 1905 showed that after deducting losses which had been incurred in the meanwhile there still remained this cash deposit of Rs. 3080 to the plaintiff's credit. It is the plaintiff's case that whether or not all preceding and subsequent transactions were tainted with the vice of gambling he is entitled to recover the balance of his cash deposit with the defendant. There has been no gambling in respect of that. What gambling there was had resulted in a diminution of the sum deposited, but-it is contended that here is nothing either in law or principle to prevent him from recovering from the defendant so much of his own money deposited with the defendant as has not been lost in gambling. And , it does appear that apart from the letter of the law the equities are all on the plaintiff's side. The first difficulty arises under s-30 of the Contract Act. That section provides that no suit shall lie for the recovery of any sum alleged to have been won on a wager or entrusted to any person to abide the result of any game or the happening of any future uncertain event. The words of this section are almost identical with the words of 8 and 9 Vict., the only difference being that in that enactment we find the word ' deposited ' instead of as in the Contract Act ' entrusted to ', and no distinction can be founded upon that immaterial change of language. A long series of decisions in England under 8 and 9 Vict, appears to have settled the legal construction of the ambiguous words 'any sum deposited with'' or ' entrusted to ' etc., and I think that although there is no Indian authority on the subject, the rule laid down by the English Courts is consonant with the language of the section and read as a whole as well as with its spirit. That rule is that the words are meant to apply only to the case of winners. He who has won a wager or a bet cannot sue to recover the amount deposited by the loser with the stake-holder. In Diggle v. Higgs (1877) L.R. 2 E D. 428, Cockburn C. J. expressed the view which I was inclined at first to take of the literal meaning of the words and therefore pressed upon the consideration of the plaintiff's counsel. That learned and eminent Judge said that had the matter been res Integra he would have held that the words applied equally to losers and winners and that no person who had deposited any money with the stake-holder pending the event of any bet could sue to recover that money any more than the winner of the bet could do so. In view of the interminable length, intricacy and difficulty of litigation over contracts which are alleged to be wagering in this country, the reason suggested by Cock-burn C. J. that the object of Legislature was to prevent the time of the Courts being taken up and wasted over the wrangles of gamblers sounds curiously ironical. What actually happens in India as a consequence of the language of Section 30 of the Contract Act is that the Courts are flooded with this kind of most unprofitable and immoral litigation and that a most disproportionate part of the Court's time is occupied with the nicest and most difficult and delicate investigations of the ingenious shifts and pleas by which these dishonest gamblers seek to and unfortunately sometimes succeed in evading payments of their debts. In the meantime honest litigation is blocked and bona fide litigants have to wait infinitely for the adjudication of their rights.

6. While I am on this subject I cannot refrain from saying that although the legislature may be credited with the best intentions in framing Section 30 of the Contract Act it is open to the reproach that it has in fact encouraged the precise evil it would strike at, for as long as the dishonest gambler knows that he can evade payment when he loses, he is certain to go on gambling with the utmost recklessness. It was argued for the defendant that there is no reason at all to put this partial and possibly artificial meaning on the plain language of the section. That, I say, is the meaning consistent with the spirit and policy of the section, for while before a winner can possibly bring a suit to recover the amount of the wager from the stake-holder, it must be assumed that the wager has been decided, the case is different with the loser. He might repent of having made a wager and desire to withdraw. In one case the machinery of the Courts had to be employed by the successful gambler to obtain the fruits of his gambling : in the other case, whatever we might have to say of the inherent immorality of the transaction in a suit by the depositor to recover his deposit from the stake-holder, there need be no question of wagering at all. As between a depositor and a depositee it would simply be a case of moneys had and received, therefore due to be returned. So far then I agree with the plaintiff that Section 30 interposes no legislative bar to the maintenance of this suit. Unfortunately in Bombay we have a gambling law contained in Bombay Act III of 1865 which exists, as far as I know, nowhere else. The provisions of that Act are so stringent and comprehensive that it cuts away all the ground from under the plaintiff's feet. Under the general law of wagering administered in England and all the rest of India nothing is better established than that an agent who has received moneys on behalf of his principal must pay those moneys to the principal even though the contracts under which he received them were not only void but actually illegal. It is plain, however, that that law will not hold under the terms of Act III of 1865. It embraces not only every conceivable form of wagering contracts but contracts made in furtherance of wagering contracts and all contracts made by way of security or guarantee of wagering contracts; and lastly it prohibits all suits for moneys paid or payable in respect of wagering contracts. That is the present law in this Presidency. It is not for Courts to criticise but to administer the law. All that I have to do is to apply that law to the facts as I find them in the present case.

7. Accepting each point the plaintiff insists upon, namely, that the sum of Rs. 5426 was a cash deposit for margins, that the defendant was his agent and in that capacity received moneys from third parties on plaintiff's account, still in view of the first fact I have found, namely, that all the plaintiff's contracts were essentially wagering contracts, I do not see how I am to escape from the very plain and imperative language of Act III of 1865. Adopting the plaintiff's own case, what was the cash deposit for margin unless it was something in the nature of contract for security or guarantee It is true that distinctions might be drawn, that it might be suggested that what the Legislature had in view was some contract to guarantee by third party warranting one principal in a wager against the other. It might even be contended that a mere deposit of cash out of which payments were to be made as required is hardly a contract at all within the meaning of the Act. Indeed it may be doubted whether in the strictest analysis it was anything more than a quasi or implied contract. But then there are the words prohibiting any suits to recover money paid or payable in respect of a wagering contract, and if the contracts into which the plaintiff intended to enter were wagering contracts, I confess I am unable to see any way out of the conclusion that the money which he now seeks to recover was paid in respect of those contracts. If not, then in respect of what was it paid To this the plaintiff is unable to give any answer.

8. I come to this conclusion with the utmost regret because I feel that a defence of wagering is always a radically dishonest defence. In the present case I am perhaps a little less troubled, because I have formed the very lowest opinion of the character of both the plaintiff and the defendant. The whole litigation, which had been protracted- for many days' hearing, is, in my opinion, a dirty litigation. It ought not to have been brought into Court at all.

9. The result is that in my view of Act III of 1865 and even accepting his own statements of facts (except of course that the contracts were not wagering contracts), the plaintiff must fail. In case, however, my view may be wrong and I wish that it were, I will add a few words on the defendant's alternative case.

10. I have no hesitation in saying that payments made to the plaintiff by the defendant on and after the 19th March 1905 were payments of plaintiff's winnings over the March Vaida. I do not believe for a moment the defendant's contention that he appropriated these payments expressly to wiping out the balance shown due in January 1905. The plaintiff still has that stamped adjustment; while the facts elicited both from the plaintiff and the defendant, as well as the entries which have been put in, prove conclusively, I think, that these sums were paid to the plaintiff as his winnings over the March Vaida. Nor do I think any question of appropriation arises, for I have no doubt that the defendant paid the money deliberately and expressly on account of the March contract. In saying this, I am not to be supposed to rest my conclusion upon the testimony of such a man as Shivnarayan. I do not really believe a word of his evidence, but such as it is it would rather tell against the plaintiff than the defendant, for apparently forgetting the points of his story he insisted repeatedly that the plaintiff was demanding these moneys on account of the adjustment, while Raghunath and Panalal have strongly insisted upon paying them against March contracts. This is on the face of it ridiculous.

11. Were it not then to the view I feel obliged to take of Act III of 1865, I should find throughout in the plaintiff's favour. As it is I am compelled to dismiss this suit; but having regard to the nature of the defence and the impression I formed of the defendant in the witness box, I decline to make any order for costs.

12. I find on the issues as follows:-

(1) Whether there was any valid consideration for the writing of 3rd January 1905 referred to in para 4 of the plaint. In the negative.

(2) Whether the said writing for Rs. 3082 was not passed to the plaintiff for the amount claimed by the plaintiff in respect of wagering contracts.

The amount was for the balance of a cash margin deposit.

(3) Whether the defendant has not paid to the plaintiff various sums of money in full satisfaction of the amount mentioned in the said writing.

In the negative.

(4) Whether the plaintiff is entitled to recover the amount claimed or any part thereof.

In the negative.


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