Report No. 276

3. The Indian Contract Act, 1872 (Contract Act)

5.7 Section 23 of the Contract Act, states that "the consideration or object of an agreement is lawful, unless - it is forbidden by law; or is of such a nature that, if permitted it would defeat the provisions of any law". This opens the gateway for Section 30 to come into operation which states that an agreement by way of wager is "void and unenforceable, but at the same time it is not forbidden by law and hence, cannot be termed illegal"93. In such a situation, no suit can be brought to enforce any winnings accruing out of winning a bet or gamble. However, this provision makes an exemption for betting on horse-racing, making them legally permissible under the Contract Act.