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Report No. 13

57. Section 30.-

The question has frequently arisen in Courts as regards the validity of the agreements collateral to wagering contracts. It has been uniformly decided by all the High Courts, other than the Bombay High Court, that though an agreement by way of wager is void, a contract collateral to it, or iri respect of a wagering agreement is not void and suits brought by brokers or agents against their principals to recover brokerage or commission in respect of transactions entered into by such brokers or agents or for indemnity for loss incurred by them in such transactions on behalf of their principal have been decreed, even though contracts in respect of which the claims were made were contracts by way of wager.

Similarly, it has been held that an agent who has received money on account of a wagering contract is bound to pay the same to his principal. In the State of Bombay, however, the law is different. There contracts collateral to or in respect of wagering transactions are governed by the Act for Avoiding Wagers (Amendment) Act, 1865.1 That Act was passed to supply the defects discovered judicially in the Act for Avoiding Wagers Act, 1848.2 Act XXI of 1848 which excluded suits on wagering transactions has been repealed, but Bombay Act III of 1865 is still in force. Sections 1 and 2 of that Act run as follows:

1. Bombay Act III of 1865.

2. Act XXI of 1848.

"1. All contracts, whether by speaking, writing or otherwise knowingly made to further or assist the entering into, effecting or carrying out agreements by way of gaming or wagering, and all contracts by way of security or guarantee for the performance of such agreements or contracts, shall be null and void; and no suit shall be allowed in any Court of Justice for recovering any sum of money paid or payable in respect of any such contract or contracts, or any such agreement or agreements as aforesaid.

2. No suit shall be allowed in any Court of Justice for recovering any commission, brokerage, fee or reward in respect of the knowingly effecting or carrying out, or of the knowingly aiding in effecting or in carrying out, or otherwise claimed or claimable in respect of, any such agreements by way of gaming or wagering or any such contract as aforesaid, whether the plaintiff in such suit be or be not a party to such last-mentioned agreement or contract, or for recovering any sum of money knowingly paid or payable on account of any persons by way of commission, brokerage, fee, or reward in respect of any such agreement by way of gaming or wagering or contract as aforesaid".

The result is that a contract collateral to or in respect of a wagering agreement is void in the Bombay State.

58. In England, the Gaming Act, 18921 was passed in order to render agreements collateral to wagering contracts void. Before this Act was passed such agreements were not void. This Act was passed in consequence of the decision in Read v. Anderson, 13 QBD 779. In that case a betting agent had made bets on behalf of his principal. After the bets were made and lost, the principal revoked the authority to pay which had been conferred upon the betting agent. The betting agent, however, paid the bets and sued the defendants to recover the amounts so paid. It was held that the agent was entitled to recover. Section 1 of the aforesaid Gaming Act of 1892 runs thus:

1. 55 & 56 Vict, c 9.

"1. Any promise, express or implied, to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Act of the eight and ninth Victoria, Chapter one hundred and nine, or to pay any sum of money by way of commission, fee, reward, or otherwise in respect of any such contract, or of any services in relation thereto or in connection therewith, shall be null and void, and no action shall be brought or maintained to recover any sum of money".

59. Pollock and Mulla1 have expressed the hope that in the revision of the Contract Act, the provision of the Bombay Act will be incorporated in section 30. We share the view that in the interest of uniformity of law on this subject, the salutary provisions of the Bombay Act should be incorporated in section 30 and we recommend accordingly.

1. Pollock & Mull; Op. cit., pp. 157-258

60. Sections 31-36.- No change is recommended in sections 31 to 36.

Indian Contract Act, 1872 Back

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