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Boppana Venkataratnam Vs. Kamalakara Hanumantha Rao - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1935Mad135
AppellantBoppana Venkataratnam
RespondentKamalakara Hanumantha Rao
Cases ReferredRourke v. Short
Excerpt:
- - his contention is that the value to be paid for the documents under the contract is made to vary according to the success or failure of the defendant in the reversionary suit and the transaction was therefore nothing but a mere gambling in litigation. can it be said that under the guise of fixing the value of the documents the parties were speculating as regards the-success or failure of the defendants in the reversionary suit? 1. the principles laid down in these cases are so well known, that it is unnecessary to refer to the-cases in detail......parties were speculating as regards the-success or failure of the defendants in the reversionary suit? a contract of wager has been defined in various leading cases such as carrill v. carbolic smoke ball co. (1892) 2 q.b. 484 and thacker v. hardy, etc. (1878) 4. q.b.d. 685. many of these cases are referred to in the recent decisions of the english court : see weddle beck & co. v. hackett (1929) 1 k.b. 321 and earl of ellasmore v. wallace (1929) 2 ch. 1. the principles laid down in these cases are so well known, that it is unnecessary to refer to the-cases in detail. generally stated, it may be said that the essence of. a wagering contract is that one party is to win and the other party is to lose upon a future event which at the time of the contract: is of an uncertain nature and that.....
Judgment:

Madhavan Nair, J.

1. The defendant is the appellant. The plaintiff and the defendant were co-defendants in O.S. No. 19 of 1924, which was a reversionary suit filed by one Devarasu Venkatasiva Rao against these and other defendants. It is not sesiously denied that the present defendant and his co-defendants 14 to 18 were the persons mainly and really interested in the subject-matter of the suit. The plaintiff was in possession of some property therein, but it was comparatively trivial in extent and in value. There were some documents in the possession of the plaintiff which were of real value in defending the suit. The plaintiff was persuaded to hand over those documents to the defendants, to enable them to prepare their defence in the suit, under the agreement Ex. A executed by the defendant. According to the plaintiff's evidence which stands unrebutted, these documents were shown by the defendant to a pleader and it was after he had pronounced that the documents were of real value that the agreement Ex. A was executed. The agreement runs as follows:

In the reversionary suit O.S. No. 29 of 1924, filed by Devamani Venkatasiva Rao Garu against me and others, we are defendants 14 to 18, It has been arranged that you should deliver to us necessary documents relied on by us for our defence in this suit and in any suit that may be filed in future and in consideration for the same. I have arranged to pay you Rs. 750, if the suit is compromised and Bs. 8.000 if the suit is decreed in favour of defendants 14 to 18, and I have received from you this day the documents held by you. Therefore if the suit is compromised, as written above, I shall deliver to you Rs. 750 and Rs. 3,000 if the suit is decided in favour of defendants 14 to 18, immediately after the final disposal of the suit. If the appeal is preferred to the High Court either by the plaintiff or defendants 14 to 18 against the judgment and decree passed by the original Court, and if the appeal is disposed of in our favour, that is defendants 14 to 18, it is arranged that I should pay to you the said sum of Rs. 3,000.

2. In pursuance of the agreement the documents in question were handed over by plaintiff to the defendant and the suit was decided in favour of the defendant and his other co-defendants. The learned District Judge says that some of the papers taken over by the defendant from the plaintiff as per the terms of Ex. A proved to be of material importance in defending the suit. In the suit out of which this second appeal arises the plaintiff basing his right on Ex. A claimed Rs. 3,090, the amount due to him for principal and interest under Ex. A. The only contention of the defendant with which we are concerned in the second appeal is that the contract is not enforceable as being one by way of wager under Section 30, Contract Act. His contention is that the value to be paid for the documents under the contract is made to vary according to the success or failure of the defendant in the reversionary suit and the transaction was therefore nothing but a mere gambling in litigation. This contention was overruled by the learned District Judge. The question for determination in the second appeal is whether the agreement in question is a contract by way of wager and therefore unenforceable.

3. It will appear from the terms of the-contract mentioned above that it relates to delivery of certain documents. The plaintiff is to receive as the value of the documents Rs. 750 if the suit is compromised and Rs. 3,000 if the suit is. fought to a finish and is decreed in favour of defendants 14 to 18. Of course though it is not stated in the document, explicitly, the plaintiff will get nothing; if the suit goes against the defendants. The parties fixed the value of the documents contemplating three possibilities. Can it be said that under the guise of fixing the value of the documents the parties were speculating as regards the-success or failure of the defendants in the reversionary suit? A contract of wager has been defined in various leading cases such as Carrill v. Carbolic Smoke Ball Co. (1892) 2 Q.B. 484 and Thacker v. Hardy, etc. (1878) 4. Q.B.D. 685. Many of these cases are referred to in the recent decisions of the English Court : see Weddle Beck & Co. v. Hackett (1929) 1 K.B. 321 and Earl of Ellasmore v. Wallace (1929) 2 Ch. 1. The principles laid down in these cases are so well known, that it is unnecessary to refer to the-cases in detail. Generally stated, it may be said that the essence of. a wagering contract is that one party is to win and the other party is to lose upon a future event which at the time of the contract: is of an uncertain nature and that neither of the parties should have any; interest in the contract than the sum which he will so win or lose. For the; purposes of this case it is unnecessary to discuss the nature of a wagering contract in grater detail. Sir William Anson's definition of a wagering contract has been accepted as a very neat one. He says that

wager is a promise to give money or money's worth upon the determination or ascertainment of an uncertain event the consideration of such a promise is either something given by the other party to abide the event or a promise to give upon the event determining in a particular way : see p. 221 of Anson's Law of Contracts, 17th Edn.

4. Then he adds there must therefore be mutual chances of gain and loss and the parties must contemplate the determination of an uncertain event as the sole condition of their contract, and that this is what distinguishes a genuine wager from a conditional promise or guarantee. It has also been laid down by an examination of the cases that in determining whether a contract is a wagering contract or not the substance of the matter is to be regarded and if there is no other purpose in the contract than that of wagering or gaining it is void : See Earl of Ellasmore v. Wallace (1929) 2 Ch. 1.

5. Keeping these salient features of a wagering contract in view, can it be said that the agreement under consideration is a wagering contract? I think not. Judging from the circumstances already narrated, can it be said that the sole purpose which the parties had in view when they entered into the contract was the determination of the fate of the suit in one way or the other? Were they not interested in the documents with which they were dealing, or were they interested only in the fate of the suit? There can be no doubt having regard to the circumstances mentioned above that the real object of the parties was to transact a sale with regard to the documents which they thought were very valuable for the case, and which eventually also happened to be so. That being their intention the price was made to depend upon certain contingencies. If the defendant lost the case the plaintiff was to get nothing; if the case was compromised, the plaintiff was to get Rs. 750, if the defendant won the case entirely, that is, if the suit was dismissed, the plaintiff was to get Rupees 3,000. It will be observed that the plaintiff would get nothing in one event, that is, if the defendant lost the case. And apart from the contract, the parties had an interest in the documents as they were documents essential for the case. We have to examine the nature of the contract in the light of these circumstances in which it was entered into, and when thus examined I have no (doubt that the contract cannot be said to be a wagering contract. It is more in the nature of a contingent or a conditional contract, the price of the documents being made to vary according to the happening of certain conditions. Mr. Krishnaswami Ayyar invited my attention to the cases in Higguson v. Simson 2 C.P.D. 76; Rourke v. Short 119 E.R. 717 and Brans v. Genes 151 E.R. 34. The nature of the contract in these cases can all be explained with reference to the circumstances in which they were entered into. The following observations of Lord Campbell, C.J. in Rourke v. Short 119 E.R. 717 were specially emphasized in support of the appellant's contention:

It makes no difference that there was a real intention to part with the goods. If a horse worth 100 is to be soid and the buyer and the seller agree that upon one event the price shall be nothing and upon another 200, that is a. wager though there be a real intention of selling the horse.

6. The illustration only shows that the existence of an intention to sell the article in question does not necessarily divest the contract of its wagering character if the circumstances really show that it can be only a wagering contract. For the above reasons I agree with the lower Courts that the agreement Ex. A is not void as a contract by way of wager and is therefore enforceable. No other questions were argued before me. The second appeal is dismissed with costs.


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