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PETITIONER: GHERULAL PARAKH

       Vs.

RESPONDENT: MAHADEODAS MAIYA AND OTHERS

DATE OF JUDGMENT: 26/03/1959

BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. IMAM, SYED JAFFER SARKAR, A.K.

CITATION:  1959 AIR  781            1959 SCR  Supl. (2) 406  CITATOR INFO :  R          1965 SC 364  (238)  D          1974 SC1924  (30)  E          1975 SC1223  (6,17)  D          1978 SC 694  (14,39)  C          1991 SC 101  (20)

ACT: Wager-Collateral contract-Agreement of Partnership  to enter into  wagering  transactions-Legality-Indian  Contract  Act, 1872 (9 of 1872), ss. 23, 30.

HEADNOTE: The question for determination in this appeal was whether an agreement  of partnership with the object of  entering  into wagering  transactions was illegal within the meaning of  s. 23  Of  the  Indian Contract Act.   The  appellant  and  the respondent No. 1 entered into a partnership with the  object of entering into forward contracts for the purchase and sale of wheat with two other firms and the agreement between them was  that the respondent would enter into the  contracts  on behalf  of the partnership and the profit or loss  would  be shared by the parties equally.  The transactions resulted in loss  and the respondent paid the entire amount due  to  the third  parties.  On the appellant denying his liability  for the  half  of  the loss, the respondent  sued  him  for  the recovery  of the same and his defence, inter alia, was  that the  agreement  to  enter into the  wagering  contracts  was unlawful  under s. 23 Of the Contract Act.  The trial  Court dismissed  the  suit.  The High Court on  appeal  held  that though  the wagering contracts were void under s. 30 Of  the Indian  Contract Act, the object of the partnership was  not unlawful within the meaning of the Act and decreed the suit. It  was  contended  on behalf of the appellant  (1)  that  a wagering contract being void under S.   30  Of the  Contract Act, was also forbidden by law within the 407 meaning  of S.23 Of the Act, that (2) the concept of  public policy   was   very  comprehensive  in   India   since   the independence,  and such a contract would be  against  public Policy,  (3) that wagering contracts were illegal under  the Hindu  Law  and (4) that they were immoral,  tested  by  the

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Hindu Law doctrine of pious obligation of sons to  discharge the father’s debts. Held, that the contentions raised were unsustainable in  law and must be negatived. Although  a  wagering contract was  void  and  unenforceable under S. 30 Of the Contract Act, it was not forbidden by law and  an  agreement  collateral to such a  contract  was  not unlawful within the meaning of s. 23 Of the Contract Act.  A partnership   with  the  object  of  carrying  on   wagering transactions was not, therefore, hit by that section. Pringle v. Jafer Khan, (1883) I.L.R. 5 All. 443, Shibho  Mal v. Lachman Das, 1901) I.L.R. 23 All. 165, Beni Madho Das  v. Kaunsal Kishor Dhusar, (1900) I.L.R. 22 All. 452, Md.  Gulam Mustafakhan v. Padamsi, A.I.R. (1923) Nag. 48, approved. ThacKer v. Hardy, (1878) L.R. 4 Q.B. 685, Read v.  Anderson, (1882)  L.R. 10 Q.B. 100, Bridger v. Savage, (1885) L.R.  15 Q.B. 363, Hyams v. Stuart King, [1908] 2 K.B. 696,  Thwaites v. Coulthwaite, (1896) 1 Ch. 496, Brookman v. Mather, (1913) 29  T.L.R. 276 and Jaffrey & Co. v. Bamford, (1921)  2  K.B. 351, Ramloll Thackoorseydass v. Soojumnull Dhondmull, (1848) 4   M.l.A.   339,   Doolubdas   Pettamberdass   v.   Ramloll Thackoorseydass  and Ors. (1850) 5 M.I.A.  109,  Raghoonauth Shoi  Chotayloll v. Manickchund and Kaisreechund,  (1856)  6 M.I.A. 251, referred to. Hill v. William Hill, (1949) 2 All E.R. 452, considered. The doctrine of public policy was only a branch of the  com- mon law and just like its any other branch, it was  governed by  precedents ; its principles had been crystallised  under different heads and though it was permissible to expound and apply them to different situations, it could be applied only to  clear  and  undeniable  cases of  harm  to  the  public. Although  theoretically it was permissible to evolve  a  new head  of public policy in exceptional cirumstances,  such  a course would be inadvisable in the interest of stability  of society. Shrinivas  Das Lakshminarayan v. Ram  Chandra  Ramrattandas, I.L.R.   (1920)  44  Bom.  6,  Bhagwanti  Genuji  Girme   v. Gangabisan Ramgopal, I.L.R. 1941 Bom. 71, and Gopi Tihadi v. Gokhei Panda, I.L.R. 1953 Cuttack 558, approved. Egerton  v.  Brownlow, 4 H.L.C. 1 ; 10 E.R. 359,  Janson  v. Driefontein  Consolidated  Mines,  Ltd.,  (1902)  A.C.  484, Fender v. St.  John-Mildmay, (1938) A.C. :1 and Monkland  v. Jack Barclay Ltd., (1951) 1 All E.R. 714, referred to. Like the common law of England, which did not recognise  any principle  of  public policy  declaring  wagering  contracts illegal,  the  Indian  Courts, both  before  and  after  the passing of 408 Act  21 Of 1848 and also after the enactment of  the  Indian Contract  Act, 1872, held that wagering contracts  were  not illegal  as being contrary to public policy  and  collateral contracts in respect of them were enforceable in law. Ramloll  Thackoorseydass v. Soojumnull Dhondmull,  (1848)  4 M.I.A. 339, referred to. Gambling  or  wagering contracts were never declared  to  be illegal  by  courts  in India as being  contrary  to  public policy as offending the principles of ancient Hindu Law  and it was not possible to give a novel content to that doctrine in respect of gaming and wagering contracts. The  State  of  Bombay v. R. M.  D.  Chamaybaugwala,  [1957] S.C.R. 874, considered. The  common  law of England and that of India  never  struck down  contracts of wager on the ground of public policy  and such  contracts  had  always been held  not  to  be  illegal although the statute declared them to be void.

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The  moral prohibitions in Hindu Law texts against  gambling were  not  legally enforced but were allowed  to  fall  into desuetude and it was not possible to hold that there was any definite  head  or  principle of public  policy  evolved  by courts  or  laid down by precedents directly  applicable  to wagering contracts. There  was  neither any authority nor any  legal  basis  for importing  the doctrine of Hindu Law relating to  the  pious obligation  of  sons  to  pay the  father’s  debt  into  the dominion of’ contracts.  Section 23 Of the Contract Act  was inspired  by  the  common  law  of  England  and  should  be construed in that light.’ The  word " immoral " was very comprehensive and varying  in its  contents and no universal standard could be laid  down. Any law, therefore, based on such fluid concept would defeat its purpose.  The provisions of S. 23 of the Indian Contract Act  indicated  that the Legislature intended to  give  that word a restricted meaning.  The limitation imposed on it  by the  expression " the Court regards it as immoral "  clearly indicated  that it was also a branch of the common  law  and should, therefore, be confined to principles recognised  and settled by courts. judicial decisions confined it to  sexual immorality,  and wager could not be brought in as  new  head within its fold.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  215  of 1955. Appeal from the judgment and decree dated April 1, 1953,  of the  Calcutta High Court in Appeal from Original Decree  No. 89  of 1946, arising, out of the judgment and  decree  dated December  4, 1945, of the Subordinate Judge, Darjeeling,  in Money Suit No. 5 of 1940. 409 L.   K. Jha and D. N. Mukherjee, for the appellant. C.   B.  Aggarwala,  K.  B. Bagchi and  Sukumar  Ghosh,  for Respondents Nos.  1 to 5. 1959.  March 26.  The Judgment of the Court was delivered by SUBBA RAO, J.-This appeal filed against the judgment of  the High Court of Judicature at Calcutta raises the question  of the  legality  of  a partnership to  carry  on  business  in wagering contracts. The facts lie in a small compass.  They, omitting those  not germane  to the controversy before us, are as  follows:  The appellant,  Gherulal  Parakh,  and  the  first   respondent, Mahadeodas  Maiya,  managers of two joint  families  entered into  a partnership to carry on wagering contracts with  two firms  of Hapur, namely, Messrs.  Mulchand  Gulzarimull  and Baldeosahay  Surajmull.  It was agreed between the  partners that  the  said contracts would be made in the name  of  the respondents  on behalf of the firm and that the  profit  and loss resulting from the transactions would be borne by  them in  equal shares.  In implementation of the said  agreement, the first respondent entered into 32 contracts with Mulchand and 49 contracts with Baldeosahay and the nett result of all these  transactions  was a loss, with the  result  that  the first  respondent  had  to pay to the  Hapur  merchants  the entire  amount  due to them.  As the  appellant  denied  his liability  to  bear  his  share  of  the  loss,  ’the  first respondent  along ’With his sons filed O. S. No. 18 of  1937 in  the Court of the Subordinate Judge, Darjeeling, for  the recovery  of half of the loss incurred in  the  transactions with Mulchand.  In the plaint he reserved his right to claim

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any further amount in respect of transactions with  Mulchand that  might  be  found due to him after  the  accounts  were finally  settled  with  him.   That  suit  was  referred  to arbitration  and on the basis of the award, the  Subordinate Judge  made a decree in favour of the first  respondent  and his  sons for a sum of Rs. 3,375.  After the final  accounts were  settled  between  the first  respondent  and  the  two merchants of Hapur and after 52 410 the  amounts  due to them were paid,  the  first  respondent instituted  a suit, out of which the present appeal  arises, in  the Court of the Subordinate Judge, Darjeeling, for  the recovery  of  a  sum of Rs.  5,300  with  interest  thereon. Subsequently  the  plaint  was amended and  by  the  amended plaint  the  respondents asked for the same  relief  on  the basis  that the firm had been dissolved.  The appellant  and his sons, inter alia, pleaded in defence that the  agreement between  the  parties to enter into wagering  contracts  was unlawful  under  s.  23 of the Contract  Act,  that  as  the partnership was not registered, the suit was barred under s. 69(1) of the Partnership Act and that in any event the  suit was  barred  under  S.  2,  Rule 2  of  the  Code  of  Civil Procedure.   The  learned Subordinate Judge found  that  the agreement  between  the parties was to enter  into  wagering contracts depending upon the rise and fall of the market and that  the  said agreement was void as the  said  object  was forbidden  by  law and opposed to public  policy.   He  also found  that  the claim in respect of the  transactions  with Mulchand  so far as it was not included in the earlier  suit was not barred under s. 2, Rule 2, Code of Civil  Procedure, as the cause of action in respect of that part of the  claim did  not  arise  at the time the said suit  was  filed.   He further found that the partnership was between the two joint families   of  the  appellant  and  the   first   respondent respectively,  that  there  could  not  be  in  law  such  a partnership and that therefore s. 69 of the Partnership  Act was  not applicable.  In the result, he dismissed  the  suit with costs. On  appeal, the learned Judges of the High Court  held  that the  partnership was not between the two joint families  but was  only between the two managers of the said families  and therefore it was valid.  They found that the’ partnership to do  business was only for a single venture with each one  of the two merchants of Hapur and for a single season and  that the said partnership was dissolved after the season was over and  therefore the suit for accounts of the  dissolved  firm was not- hit by the provisions of subsections (1) and (2) of s. 69 of the Partnership Act. 411 They  further found that the object of the partnere  was  to deal  in differences and that though the said  transactions, being  in the nature of wager, were void under s. 30 of  the Indian Contract Act, the object was not unlawful within  the meaning of s. 23 of the said Act. In regard to the claim, the learned Judges found that  there was  no satisfactory evidence as regards the payment by  the first  respondent  on  account  of  loss  incurred  in   the contracts with Mulchand but it was established that he  paid a  sum  of  Rs. 7,615 on account of loss  in  the  contracts entered  into  with Baldeosahay.  In the  result,  the  High Court gave a decree to the first respondent for a sum of Rs. 3,807-8-0  and  disallowed interest thereon for  the  reason that  as  the suit in substance was one for  accounts  of  a dissolved firm, there was no liability in the  circumstances

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of the case to pay interest.  In the result, the ’High Court gave a decree in favour of the first respondent for the said amount  together with another small item and  dismissed  the suit  as  regards  " the plaintiffs  other  than  the  first respondent and the defendants other than the appellant ". Before we consider the questions of law raised in the  case, it  would  -be  convenient  at  the  outset  to  dispose  of questions  of  fact  raised by either  party.   The  learned Counsel  for the appellant contends that the finding of  the learned Judges of the High Court that the partnership  stood dissolved after the season was over was not supported by the pleadings  or  the  evidence adduced in the  case.   In  the plaint  as  originally drafted and presented to  the  Court, there was no express reference to the fact that the business was  dissolved and no relief was asked for accounts’ of  the dissolved  firm.  But the plaint discloses that the  parties jointly  entered into contracts with two  merchants  between March  23,  1937,  and June 17, 1937,  that  the  plaintiffs obtained  complete  accounts  of  profit  and  loss  on  the aforesaid  transactions from the said merchants  after  June 17, 1937, that they issued a notice to the defendants to pay them  a  sum  of  Rs. 4,146-4-3, being  half  of  the  total payments made by them on account of 412 the  said  contracts and that the  defendants  denied  their liability.   The  suit was filed for recovery  of  the  said amount.  The defendant filed a written-statement on June 12, 1940,  but  did  not raise the plea based on s.  69  of  the Partnership  Act.  He filed an additional  written-statement on  November  9,  1941,  expressly  setting  up  the   plea. Thereafter  the plaintiffs prayed for the amendment of  the, plaint  by adding the following to the plaint  as  paragraph 10: " That even Section 69 of the Indian Partnership Act is  not a bar to the present suit as the joint business referred  to above  was dissolved and in this suit the Court is  required only to go into the accounts of ’the said joint business ". On August 14, 1942, the defendant filed a further additional written-statement alleging that the allegations in paragraph 2  were  not  true  and  that as  no  date  of  the  alleged dissolution   had   been  mentioned  in  the   plaint,   the plaintiffs’  case based on the said alleged dissolution  was not  maintainable.   It  would be seen  from  the  aforesaid pleadings  that though an express allegation of the fact  of dissolution of the partnership was only made by an amendment on  November  17, 1941, the plaint as  originally  presented contained  all  the  facts sustaining the  said  plea.   The defendants  in their written-statement, inter  alia,  denied that  there  was  any  partnership  to  enter  into  forward contracts  with  the said two merchants and  that  therefore consistent  with their case they did not  specifically  deny the  said  facts.  The said facts, except in regard  to  the question  whether  the  partnership  was  between  the   two families or only between the two managers of the families on which there was difference of view between the Court of  the Subordinate  Judge  and the High  Court,  were  concurrently found by both the Courts.  It follows from the said findings that  the  partnership  was  only  in  respect  of   forward contracts   with  two  specified  individuals  and   for   a particular  season.  But it is said that the  said  findings were not based on any evidence in the case.  It is true that the  documents did not clearly indicate any period  limiting the  operation  of the partnership, but  from  the  attitude adopted by the 413

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defendants  in the earlier suit ending in an award and  that adopted  in  the  present  pleadings,  the  nature  of   the transactions  and  the  conduct of  the  parties,  no  other conclusion  was-possible  than that arrived at by  the  High Court.  If so, s. 42 of the Partnership Act directly applies to  this  case.   Under that section in  the  absence  of  a contract  to  the contrary, a firm is dissolved,  if  it  is constituted   to  carry  out  one  or  more  adventures   or undertakings,  by  completion thereof.  In  this  case,  the partnership  was  constituted to carry  out  contracts  with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved. At this stage a point raised by the learned Counsel for  the respondents  may conveniently be disposed of.   The  learned Counsel contends that neither the learned Subordinate  Judge nor  the  learned Judges of the High Court  found  that  the first respondent entered into any wagering transactions with either  of  the  two merchants of  Hapur  and  therefore  no question of illegality arises in this case.  The law on  the subject is wellsettled and does not call for any citation of cases.   To  constitute a wagering contract  there  must  be proof that the contract was entered into upon terms that the performance of the contract should not be demanded, but only the  difference in prices should be paid.  There  should  be common intention between the parties to the wager that  they should not demand delivery of the goods but should take only the  difference  in  prices on the happening  of  an  event. Relying  upon the said legal position, it is contended  that there is no evidence in the case to establish that there was a  common  intention between the first  respondent  and  the Hapur merchants not to take delivery of possession but  only to gamble in difference in prices.  This argument, if we may say so, is not really germane to the question raised in this case.   The  suit  was filed on the  basis  of  a  dissolved partnership for accounts.  The defendants contended that the object   of  the  partnership  was  to  carry  on   wagering transactions,  i. e., only to gamble in differences  without any  intention  to  give or take  delivery  of  goods.   The Courts, on the evidence, both 414 direct  and circumstantial, came to the conclusion that  the partnership  agreement was entered into with the  object  of carrying  on  wagering  transactions wherein  there  was  no intention  to ask for-or to take delivery of goods but  only to  deal with differences.  That is a concurrent finding  of fact,  and, following the usual practice of this  Court,  we must  accept it.  We, therefore, proceed on the  basis  that the  appellant  and  the first  respondent  entered  into  a partnership  for carrying on wagering transactions  and  the claim related only to the loss incurred in respect of  those transactions. Now  we come to the main and substantial point in the  case. The problem presented, with its different facets, is whether the  said  agreement of partnership is unlawful  within  the meaning of s. 23 of the Indian Contract Act.  Section 23  of the said Act, omitting portions unnecessary for the  present purpose, reads as follows : "  The  consideration or object of an agreement  is  lawful, unless- it is forbidden by law, or the  Court  regards  it as immoral,  or  opposed  to  public policy. In  each of these cases, the consideration or object  of  an agreement is said to be unlawful.  Every agreement of  which the object or consideration is unlawful is void."

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Under  this section, the object of an agreement, whether  it is  of  partnership  or  otherwise, is  unlawful  if  it  is forbidden  by  law  or the Court regards it  as  immoral  or opposed  to  public policy and in such cases  the  agreement itself is void. The learned Counsel for the appellant advances his  argument under  three sub-heads: (i) the object is forbidden by  law, (ii)  it  is  opposed  to public policy,  and  (iii)  it  is immoral.  We shall consider each one of them separately. Re.  (i)--forbidden  by  law:  Under s.  30  of  the  Indian Contract  Act, agreements by way of wager are void;  and  no suit shall be brought for recovering anything 415 alleged  to be won on any wager, or entrusted to any  person to abide the result of any game or other uncertain event  on which any wager is made.  Sir William Anson’s definition  of "  wager " as a promise to give money or money’s worth  upon the  determination  or ascertainment of an  uncertain  event accurately brings out the concept of wager declared void  by s. 30 of the Contract Act.  As a contract which provides for payment  of  differences only without any intention  on  the part  of either of the parties to give or take  delivery  of the goods is admittedly a wager within the meaning of s.  30 of   the  Contract  Act,  the  argument  proceeds,  such   a transaction,  being  void under the said  section,  is  also forbidden by law within the meaning of s. 23 of the Contract Act.  The question, shortly stated, is whether what is  void can be equated with what is forbidden by law.  This argument is not a new one, but has been raised in England as well  as in  India and has uniformly been rejected.  In  England  the law  relating to gaming and wagering contracts is  contained in  the  Gaming  Acts of 1845 and 1892.   As  the  decisions turned  upon  the relevant provisions of the said  Acts,  it would  help  to  appreciate  them  better  if  the  relevant sections of the two Acts were read at this stage: Section 18 of the Gaming Act, 1845: " Contracts by way of gaming to be void, and wagers or  sums deposited  with stakeholders not to be recoverable  at  law- Saving  for  subscriptions for  prizes.................  All contracts or agreements, whether by parole or in writing, by way  of  gaming  or  wagering,  shall  be  null  and   void; and.........  no suit shall be brought or maintained in  any court  of law and equity for recovering any sum of money  or valuable  thing alleged to be won upon any wager,  or  which shall  have  been deposited in the hands of  any  person  to abide-the  event  on which any wager shall have  been  made: Provided always, that this enactment shall not be deemed  to apply  to any subscription or contribution, or agreement  to subscribe or contribute, for or towards any plate, prize  or sum of money to be awarded -to the winner or winners of  any lawful game, sport, pastime or exercise." 416 Section 1 of the Gaming Act, 1892: " Promises to repay sums paid under contracts void by 8 &  9 Viet.  c  109 to be null and void.-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 Gaming Act, 1845, 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 connexion therewith, shall be null and  void, and no action shall be brought or maintained to recover  any such sum of money." While the Act of 1845 declared all kinds of wagers or  games null  and void, it only prohibited the recovery of money  or

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valuable  thing  won  upon  any  wager  or  desposited  with stakeholders.   On the other hand, the Act of  1892  further declared  that moneys paid under or in respect  of  wagering contracts dealt with by the Act of 1845 are not  recoverable and  no commission or reward in respect of any wager can  be claimed  in  a  court of law by agents employed  to  bet  on behalf  of  their principals.  The law of England  till  the passing  of the Act of 1892 was analogous to that  in  India and  the  English  law on the subject  governing  a  similar situation  would  be of considerable help  in  deciding  the present  case.   Sir William Anson in his book " On  Law  of Contracts " succinctly states the legal position thus, at page 205: "................  the  law may either  actually  forbid  an agreement  to  be made, or it may merely say that if  it  is made the Courts will not enforce it.  In the former case  it is illegal, in the latter only void; but inasmuch as illegal contracts  are  also  void, though void  contracts  are  not necessarily  illegal, the distinction is for  most  purposes not  important, and even judges seem sometimes to treat  the two terms as inter- changeable." The  learned  author  proceeds to  apply  the  said  general principles to wagers and observes, at page 212, thus: "Wagers ’beidg only void, no taint of illegality attached to a transaction, whereby one man employed another to make bets for him; the ordinary rules which 417 govern the relation of employer and employed applied in such a case." Pollock  and Mulla in their book on Indian  Contract  define the phrase ’,forbidden by law " in s. 23 thus, at page 158: "An  act or undertaking is equally forbidden by law  whether it violates a prohibitory enactment of the Legislature or  a principle  of  unwritten  law.   But  in  India,  where  the criminal  law  is  codified,  acts  forbidden  by  law  seem practically  to consist of acts punishable under  the  Penal Code  and of acts prohibited by special legislation,  or  by regulations or orders made under authority derived from  the Legislature." Some of the decisions, both English and Indian, cited at the Bar which bring out the distinction between a contract which is  forbidden  by  law and that which is  void  may  now  be noticed.  In Thacker v. Hardy (1), the plaintiff, a  broker, who was employed by the defendant to speculate for him  upon the stock Exchange, entered into contracts on behalf of  the defendant  with a third party upon which he (the  plaintiff) became  personally  liable.   He  sued  the  defendant   for indemnity  against  the liability incurred by  him  and  for commission as broker.  The Court held that the plaintiff was entitled to recover notwithstanding the provisions of 8 &  9 Viet.  c. 109, s. 18 (English Gaming Act,  1845).   Lindley, J., observed at page 687: "  Now, if gaming and wagering were illegal, I should be  of opinion that the illegality of the transactions in which the plaintiff and the defendant were engaged would have tainted, as  between themselves, whatever the plaintiff had  done  in futherance   of  their  illegal  designs,  and  would   have precluded  him  from  claiming,  in  a  court  of  law,  any indemnity  from the defendant in respect of the  liabilities he  had  incurred:  Cannan  v. Bryce  (3  B.  &  Ald.  179); McKinnell  v. Robinson (3 M. & W. 434); Lyne v. Siesfeld  (1 H. & N. 278).  But it has been held that although gaming and wagering contracts cannot be enforced, they are (1)  (1878) L.R. 4 Q.B. 685. 53

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418 not  illegal.   Fitch v. Jones (5 E. & B. 238) is  plain  to that  effect.   Money paid in discharge of a bet is  a  good consideration for a bill of exchange: Oulds v. Harrison  (10 Ex.  572);  and if money be so paid by a  plaintiff  at  the request  of  a  defendant, it can  be  recovered  by  action against him : Knight v. Camber (15 C.B. 562);   Jessopp   v. Lutwyoho (10 Ex. 614); Rosewarne v.     Billing  (15  C.  B. (N.   S.) 316); and it has been held that a request  to  pay may be inferred from an authority to bet: Oldham v.  Ramsden (44 L. J. (C.  P.) 309).  Having regard to these  decisions, I  cannot hold that the statute above referred to  precludes the plaintiff from maintaining this action." In Read v. Anderson.(1) where an agent was employed to  make a bet in his own name on behalf of his principal, a  similar question  arose for consideration.  Hawkins, J., states  the legal position at page 104 : "  At  common law wagers were not illegal,  and  before  the passing  of  8  & 9 Vict. c.  109  actions  were  constantly brought and maintained to recover money won upon them.   The object  of  8 & 9 Viet. c. 109 (passed in 1845) was  not  to render illegal wagers which up to that time had been lawful, but  simply  to make the law no longer available  for  their enforcement, leaving the parties to them to pay them or  not as their sense of honour might dictate." After  citing  the  provisions of s. 18  of  that  Act,  the learned Judge proceeds to observe thus, at page 105 : "  There is nothing in this language to affect the  legality of  wagering  contracts, they are simply rendered  null  and void; and not enforceable by any process of law.  A host  of authorities  have settled this to be the true effect of  the Statute." This  judgment  of  Hawkins, J.,  was  confirmed  on  appeal (reported  in  13 Q. B. 779) on the ground that  the  agency became  irrevocable on the making of the bet.  The  judgment of  the Court of Appeal cannot be considered to be a  direct decision  on the point.  The said principle was affirmed  by the  Court of Appeal again in Bridger v. Savage (2).   There the plaintiff sued his (1) (1882) L.R. 10 Q.B. 100. (2) (1885) L.R. 15 Q.B. 363. 419 agent  for  the  amount received by him in  respect  of  the winnings  from the persons with whom the agent  had  betted. Brett, M. R., observed at page 366 : "............  the  defendant has received  money  which  he contracted  with the plaintiff to hand over  to him when  he had  received it.  That is a perfectly legal contract ;  but for the defendant it has been contended that the statute 8 & 9  Vict.  c. 109, s. 18, makes that contract  illegal.   The answer  is  that it has been held by the Courts  on  several occasions  that  the statute applies only  to  the  original contract -made between the persons betting, and not to  such a  contract  as  was made here  between  the  plaintiff  and defendant." Bowen, L. J., says much to the same effect at page 367: "Now with respect to the principle involved in this case, it is  to be observed that the original contract of betting  is not  an  illegal one, but only one which is  void.   If  the person  who has betted pays his bet, he does nothing  wrong; he only waives a benefit which the statute has given to him, and Confers a good title to the money on the person to  whom he pays it.  Therefore when the bet is paid the  transaction is  completed, and when it is paid to an agent it cannot  be contended  that  it  is not a good  payment  for  his  prin-

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cipal............  So  much, therefore,  for  the  principle governing  this case.  As to the authorities, the  cases  of Sharp v. Taylor (2 Phil. 801), Johnson v. Lansley (12 C.  B. 468), and Beeston v. Beeston (I Ex.  D. 13), all go to  shew that this action is maintainable, and the only authority the other  way is that of Beyer v. Adams (26 L. J.  (Ch.)  841), and  that  case cannot be supported, and is not  law."  This case  lays  down the correct principle and is  supported  by earlier   authorities.    The  decision  in   Partridge   v. Mallandaine  (1)  is to the effect  that  persons  receiving profits  from betting systematically carried on by them  are chargeable with income-tax on such profits in respect of a " vocation  "  under 5 & 6 Vict. c. 35 (the  Income  Tax  Act) Schedule D. Hawkins, J., rejecting the argument that the (1)  (1887) L.R. 18 Q.B. 276. 420 profession of bookmakers is not a calling within the meaning of the Income Tax Act, makes the following observations,  at page 278: "Mere betting is not illegal.  It is perfectly lawful for  a man to bet if he likes.  He may, however, have a  difficulty in getting the amount of the bets from dishonest persons who make bets and will not pay." The  decision  in Hyams v. Stuart King (1)  deals  with  the problem of the legality of a fresh agreement between parties to  a  wager for consideration.  There, two  bookmakers  had betting   transactions  together,  which  resulted  in   the defendant  giving the plaintiff a cheque for the  amount  of bets  lost  to him.  At the request of  the  defendant,  the cheque  was held over by the plaintiff for a time, and  part of  the  amount  of the cheque was paid  by  the  defendant. Subsequently  a fresh verbal agreement was come  to  between the  parties,  by which, in consideration of  the  plaintiff holding  over the cheque for a further time  and  refraining from  declaring  the  defendant  a  defaulter  and   thereby injuring  him with his customers, the defendant promised  to pay the balance owing in a few days.  The balance was  never paid and the plaintiff filed a suit to recover the money  on the  basis  of  the fresh verbal agreement.   The  Court  of Appeal, by a majority, Fletcher Moulton, L. J.,  dissenting, held  that the fresh verbal agreement was supported by  good consideration  and therefore the plaintiff was  entitled  to recover  the  amount due to him.  At page  705,  Sir  Gorell Barnes posed the following three questions to be decided  in the case: (1) Whether the new contract was itself one  which falls  within the provisions of 8 & 9 Vict. c. 109,  s.  18; (2)   whether  there  was  any  illegality  affecting   that contract;  and  (3)  whether  that  contract  was  a  lawful contract  founded on good consideration.  Adverting  to  the second question, which is relevant to the present case,  the President made the following observations at page 707: "............... it is to be observed that there was nothing illegal in the strict sense in making the bets. (1)  [1908] 2 K.B. 696. 421 They  were merely void under 8 & 9 Vict. c. 109,  and  there would  have been no illegality in paying them.  There is  no doubt  whatever about this.  There was also nothing  illegal in  giving  the  cheque  nor  would  there  have  been   any illegality  in  paying it, though the defendants  could  not have  been compelled by the plaintiff to pay it, because  by statute it was to be deemed and taken to have been made  and given  for an illegal consideration, and therefore  void  in the hands of the plaintiff........ The statutes do not  make the  giving or paying of the cheque illegal, and  impose  no

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penalty  for  so doing.  Their effect and  intention  appear only,  so  far as material, to be that  gaming  or  wagering contracts   cannot  be  enforced  in  a  Court  of  Law   or Equity..............." The view expressed by the President is therefore  consistent with  the view all along accepted by the Courts in  England. This   case  raised  a  now  problem,  namely,   whether   a substituted  agreement  for consideration between  the  same parties  to  the wager could be enforced, and  the  majority held  that it could be enforced, while Fletcher Moulton,  L. J., recorded his dissent.  We shall have occasion to  notice the  dissenting view of Fletcher Moulton, L. J., at a  later stage.   The aforesaid decisions establish  the  proposition that in England a clear distinction is maintained between  a contract which is void and that which is illegal and it  has been  held  that  though a wagering  contract  is  void  and unenforceable  between  parties,  it  is  not  illegal   and therefore  it does not affect the validity of  a  collateral contract. ’The same principle has been applied to collateral contracts of  partnership  also.  In Thwaites v. Coulthwaite  (1)  the question  of  legality of a partnership  of  bookmaking  and betting was raised.  There the plaintiff and defendant  were partners  in  a-bookmakers and betting business,  which  was carried  on  by  the defendant;  the  plaintiff  claimed  an account of the profits of the partnership, and the defendant contended that, having regard to the nature of the business, no such relief could be obtained.  Chitty, J., rejected the (1)  (1896) 1 Ch. 496. 422 plea  holding  that  the  partnership  was  valid,  for  the following reasons, among others, and stated at page 498: - "  The Gaming Act, 1845 (8 & 9 Vict. c. 109), did  not  make betting  illegal;  this statute, as is  well  known,  merely avoided the wagering contract.  A man may make a single  bet or  many  bets;  he may habitually bet; he may  carry  on  a betting or bookmakers business within the statute,  provided the  business as carried on by him does not fall within  the prohibition of the Betting Act, 1853." In  Thomas v. Day (1), a similar question arose.  There  the plaintiff   claimed  an  account  and  money  due  under   a partnership which he alleged had existed between himself and the  defendant  to  take an office and carry  on  a  betting business   as   bookmakers.   Darling,  J.,  held   that   a partnership to carry on the business of a bookmaker was  not recognized  by  law,  that even if there was  such  a  legal partnership, an action for account would not lie as  between the   two  bookmakers  founded  on  betting   and   gambling transactions.    This   judgment  certainly   supports   the appellant; but the learned Judge did not take notice of  the previous   decision  on  the  subject  and  the   subsequent decisions  have not followed it.  When a  similar  objection was  raised in Brookman v. Mather (2), Avery,  J.,  rejected the  plea  and gave a decree to the  plaintiff.   There  the plaintiff  and the defendant entered into a  partnership  to carry on a betting business.  Two years thereafter, in 1910, the partnership was dissolved and a certain amount was found due to the plaintiff from the defend ant and the latter gave the  former a promissory note for that amount.  A  suit  was filed  for  the  recovery of the amount  payable  under  the promissory  note.  Avery, J., reiterated the principle  that betting was not illegal per se.  When the decision in Thomas v.  Day(1) was cited in support of the broad principle  that the  betting business could not be recognized as legal in  a Court  of Justice, the learned Judge pointed out  that  that

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case was decided without reference to Thwaites (1)  (1908) 24 T.L.R. 272. (2)  (1913) 29 T.L.R. 276. 423 v.   Coulthwaite  (1).  This judgment, therefore,  corrected the deviation made by Darling, J., in Thomas v. Day(2 )  and put the case law in line with earlier precedents. The earlier view was again accepted and followed in Keen  v. Price  (3)  where  an action by one of  the  partners  in  a bookmakers  and  betting business against the other  for  an account  of the partnership dealings was  entertained.   But the  Court  gave  liberty  to the  defendant  to  object  to repaying   anything  which  represented  profits   in   such business.  The reason for this apparent conflict between the two  parts of the decision is found in the express terms  of the  provisions of the Gaming Act of 1892.  Commenting  upon Thwaites  v. Coulthwaite (1) in which Chitty, J., held  that such  an action would lie for an account of the  profits  of the partnership, Sargant, J., pointed out that in that  case the Gaming Act, 1892, was not referred to.  At page 101, the learned Judge says: "  Curiously enough, in that case the Gaming Act, 1892,  was not referred to, and although the decision is a good one  on the general law, it cannot be regarded as a decision on  the Act of 1892." This  judgment  confirms the principle that a wager  is  not illegal, but states that after the Gaming Act, 1892, a claim in respect of that amount even under a collateral  agreement is not maintainable. In  O’Connor and Ould v. Ralston (4), the plaintiff, a  firm of bookmakers, filed a suit claiming from the defendant  the amount of five cheques drawn by him upon his bank in payment of  bets  which  he  had lost to them  and  which  had  been dishonoured on presentation.  Darling, J., held that as  the plaintiffs formed an association for the purpose of carrying on a betting business, the action would not lie.  In  coming to  that  conclusion  the  learned  Judge  relied  upon  the dissenting  view  of Fletcher Moulton, L. J.,  in  Hyams  v. Stuart  King  We  shall consider that decision  at  a  later stage. (1) (1896) 1 Ch. 496.       (2) (1908) 24 T.L.R. 272. (3) (1914) 2 Ch. 98.       (4) (1920) 3 K.B. 451. (5)  [1908] 2 K.B. 696. 424 The opinion of Darling, J., was not accepted in Jeffrey  Co. v. Bamford (1) wherein McCardie, J., held that a partnership for  the  purpose of carrying on a  betting  and  bookmakers business  is not per se illegal or impossible in  law.   The learned Judge says at page 356: "............  betting or wagering is not illegal at  common law...... . It  has  been repeatedly pointed out that  mere  betting  on horse races is not illegal ". The  learned  Judge, after noticing  the  earlier  decisions already  considered by us and also some of the  observations of Fletcher Moulton, L. J., came to the conclusion that  the partnership was not illegal. We shall now scrutinize the decision in Hill v. William Hill (I) to see whether there is any substance in the argument of the  learned  Counsel for the appellant that  this  decision accepted the dissenting view of Fletcher Moulton, L. J.,  in Hyams  v.  Stuart King (3) or the view of  Darling,  J.,  in Thomas v. Day (4) and O’Connor and Ould v. Ralston (5).  The facts   in  that  case  were:  The  appellant  had   betting transactions with the respondents, a firm of bookmakers.  As

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a  result  of those transactions, the appellant  lost  pound 3,635-12-6.  As the appellant was unable to pay the  amount, the matter was referred to the committee of Tattersalls, who decided that the appellant should pay the respondents a  sum of  pound 635-12-6 within fourteen days and the  balance  by monthly instalments of pound 100.  It was laid down that  if the  appellant failed to make those payments, he was  liable to  be reported to the said committee which would result  in his   being  warned  off  Newmarket  Heath  and  posted   as defaulters  The appellant informed the respondents  that  he was  unable to pay the pound 635-12-6 within the  prescribed time  and offered to send them a cheque for that  sum  post- dated  October 10, 1946, and to pay the monthly  instalments of  pound  100 thereafter.  On the respondents  agreeing  to that course, the appellant sent a post-dated cheque to (1) (1921) 2 K.B. 351.         (2) (1949) 2 All E.R. 452. (3) [1908] 2 K.B. 696.         (4) (1908) 24 T.L.R. 272. (5)  (1920) 3 K.B. 451. 425 them and also enclosed a letter agreeing- to pay the monthly instalments.   As the post-dated cheque was dishonoured  and the   appellant  failed  to  pay  the  entire  amount,   the respondents  filed  a suit claiming the amount due  to  them under  the subsequent agreement.  The respondents  contended that the sum the appellant had promised to pay was not money won upon a wager within the meaning of the second branch  of s. 18, but was money due under a new lawful and  enforceable agreement and that even if the sum was to be regarded as won on  a  wager,  the agreement was outside the  scope  of  the second  branch of s. 18 of the Gaming Act, 1845.  The  House of  Lords  by a majority of 4 to 3 held that  the  agreement contained  a new promise to pay money won upon a  wager  and that the second branch of s. 18 applied to all suits brought to  recover  money alleged to have been won on a  wager  and therefore the contract was unenforceable.  In coming to that conclusion, Viscount Simon, one of the Judges who  expressed the  majority view, agreed with Fletcher Moulton, L. J.,  in holding that the bond constituted an agreement to pay  money won upon a wager, notwithstanding the new consideration, and was thus unenforceable under the second limb of s. 18. In  Hyams  v.  Stuart King(1), the facts of  which  we  have already  given,  the  suit  was filed  on  the  basis  of  a subsequent agreement between the same parties to the  wager. The  majority  of  the  Judges  held  that  the   subsequent agreement   was  supported  by  good  consideration,   while Fletcher  Moulton,  L. J., dissented from  that  view.   The basis  for the dissenting view is found at page 712.   After reading  s.  18 of the Gaming Act, 1845, the  learned  Judge proceeded to state: "  In my opinion too little attention has been paid  to  the distinction between the two parts of this enactment, and the second  part  has been treated as being in effect  merely  a repetition  of  the  first part.  I cannot  accept  such  an interpretation.   So far as the actual wagering contract  is concerned,  the earlier provision is ample.  It  makes  that contract absolutely void, (1)  [1908] 2 K.B. 696. 54 426 and  it  would  be idle to enact in addition  that  no  suit should  be  brought  upon  a contract  that  had  thus  been rendered  void  by  statute.   The  language  of  the  later provision  is  in my opinion much wider.  It  provides  with complete  generality  that  no action shall  be  brought  to recover  anything alleged to be won upon any wager,  without

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in any way limiting the application of the provision to  the wagering contract -itself.  In other words, it provides that wherever the obligation under a contract is or includes  the payment  of money won upon a wager, the Courts shall not  be used  to  enforce  the  performance  of  that  part  of  the obligation ". These observations must be understood in the context of  the peculiar  facts  of  that case.  The suit  was  between  the parties  to the wager.  The question was whether the  second part  of the concerned section was comprehensive  enough  to take  in an agreement to recover the money won upon a  wager within  the meaning of that part.  Fletcher Moulton, L.  J., held that the second part was wide and comprehensive  enough to  take  in such a claim, for the suit was, though  on  the basis  of a substituted agreement, for the recovery  of  the money  won upon a wager within the meaning of the  words  of that part of the section.  The second question considered by the learned Judge was whether the defendants’ firm which was an association formed for the purpose of a betting  business was a legal partnership under the English Law.  The  learned Judge  relied upon the Gaming Act. 1892 in holding  that  it was  not  possible under the English law to  have  any  such partnership.  At page 718, the learned Judge observed : In my opinion no such partnership is -possible under English law.  Without considering any other grounds of objection  to its existence, the language of the Gaming Act, 1892, appears to me to be sufficient to establish this proposition.  It is essential to the idea of a partnership that each partner  is an agent. of the partnership and (subject to the  provisions of  the partnership deed) has authority to make payments  on its  behalf  for  partnership  purposes,  for  which  he  is entitled 427 to  claim  credit  in  the  partnership  accounts  and  thus receive,  directly  or indirectly, repayment.   But  by  the Gaming Act, 1892, all promises to pay any person any sum  of money paid by him in respect of a wagering contract are null and  void.   These  words are wide  enough  to  nullify  the fundamental   contract  which  must  be  the  basis   of   a partnership, and therefore in my opinion no such partnership is  possible,  and  the action for  this  reason  alone  was wrongly framed and should have been dismissed with costs ". It  would be seen from the said observations  that  Fletcher Moulton,  L. J., laid down two propositions: (i) The  second part  of  s. 18 of the Gaming Act, 1845,  was  comprehensive enough to take in a claim for the recovery of money  alleged to be won upon a wager though the said claim was based  upon a substituted contract between the same parties; and (ii) by reason  of the wide terms of the Gaming Act, 1892, even  the fundamental contract, which was the basis of a  partnership, was  itself  a nullity.  The learned Lord  Justice  did  not purport  to  express  any opinion on the effect  of  a  void contract of wager on a collateral contract.  In Hill’s  case (1) the only question that arose was whether the second part of s. 18 was a bar to the maintainability of a suit under  a substituted  agreement for the recovery of money won upon  a wager.  The majority accepted the view of Fletcher  Moulton, L.  J., on the first question.  The second question did  not arise  for consideration in that case.  The House  of  Lords neither expressly nor by necessary implication purported  to hold  that  collateral  contract of  either  partnership  or agency  was illegal; and that the long catena  of  decisions already  referred  to  by us  were  wrongly  decided.   This judgment  does not therefore support the contention  of  the learned Counsel for the appellant.

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The  legal position in India is not different.   Before  the Act  for Avoiding Wagers, 1848, the law relating  to  wagers that  was  in force in British India was the common  law  of England.  The Judicial Committee in Ramloll  Thackoorseydass v. Soojumnull Dhondmull (2) (1) (1921) 2 K.B. 351. (2) (1848) 4 M.I.A. 339. 428 expressly ruled that the common law of England was in  force in India and under that law an action might be maintained on a  wager.   The wager dealt with in that case was  upon  the average price which opium would fetch at the next Government sale at Calcutta.  Lord Campbell in rejecting the plea  that the wager was illegal observed at page 349: " The Statute, 8 & 9 Viet. c. 109, does not extend to India’ and  although  both parties on the record  are  Hindoos,  no peculiar  Hindoo law is alleged to exist upon  the  subject; therefore  this case, must be decided by the common  law  of England ". It  is a direct decision on the point now mooted  before  us and  it  is in favour of the respondents.  Again  the  Privy Council   considered  a  similar  question   in   Doolubdass Pettamberdass  v. Ramloll Thackoorseydass and  others  There again  the  wager was upon the price that  the  Patna  opium would fetch at the next Government sale at Calcutta.   There the  plaintiff  instituted a suit in the  Supreme  Court  of Bombay  in  January,  1847, to recover the money  won  on  a wager.  After the suit was filed, Act 21 of 1848 was  passed by the Indian Legislature where under all agreements whether made in speaking, writing, or otherwise, by way of gaming or wagering,  would  be  null and void and  no  suit  would  be allowed in any Court of Law or Equity for recovering any sum of  money or valuable thing alleged to be won on any  wager. This  section was similar in terms to that of s. 18  of  the Gaming  Act, 1845.  Their Lordships held that  the  contract was not void and the Act 21 of 1848 would not invalidate the contracts  entered  into  before the Act  came  into  force. Adverting  to  the next argument that under Hindu  Law  such contracts  were void, they restated their view expressed  in Ramloll  Thackoorserdas v. Soojumnull Dhondmull (2) thus  at page 127: "  Their  Lordships  have already said  that  they  are  not satisfied from the authorities referred to, that such is the law among the Hindoos... . " The  Judicial  Committee again restated the law  in  similar terms in Raghoonauth Sahoi Chotayloll v. (1) (1850) 5 M.I.A. 109. (2) (1848) 4 M.I.A. 339. 429 Manickchund  and  Kaisreechund  (1).   There  the   Judicial Committee  held that a wagering contract in India  upon  the average price opium would fetch at a future Government sale, was  legal  and  enforceable  before  the  passing  of   the Legislative Act, No. 21 of 1848. The  aforesaid three decisions of the Privy Council  clearly establish  the legal position in India before the  enactment of the Act 21 of 1848, namely, that wagering contracts  were governed by the common law of England and were not void  and therefore  enforceable in Courts.  They also held  that  the Hindu Law did not prohibit any such wagers. The  same view was expressed by the Indian Courts  in  cases decided  after the enactment of the Contract Act.  An  agent who  paid the amount of betting lost by him was  allowed  to recover the same from his principal in Pringle v. Jafar Khan (2).  The reason for that decision is given at page 445:

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"  There  was nothing illegal in the  contract;  betting  at horse-races could not be said to be illegal in the sense  of tainting any transaction connected with it. This distinction between an agreement which is only void and one in which the consideration is also unlawful is made in the Contract  Act. Section 23 points out in what cases the consideration of  an agreement  is unlawful, and in such cases the  agreement  is also  void,  that is, not enforceable at  law.   Section  30 refers to cases in which the agreement is only void,  though the consideration is not necessarily unlawful.  There is  no reason why the plaintiff should not recover the sum paid  by him...... ." In  Shibho  Mal  v. Lachman Das (3) an agent  who  paid  the losses  on the wagering transactions was allowed to  recover the  amounts he paid from his principal.  In Beni Madho  Das v. Kaunsal Kishor Dhusar (4) the plaintiff who lent money to the  defendant to enable him to pay off a gambling debt  was given  a  decree  to recover the same  from  the  defendant. Where  two partners entered into a contract of wager with  a third (1)  (1856) 6 M.I.A. 251. (3)  (1901) I.L.R. 23 All. 165. (2)  (1883) I.L.R. 5 All. 443. (4)  (1900) I.L.R. 22 All. 452. 430 party  and  one partner had satisfied his own  and  his  co- partner’s  liability  under the contract,  the  Nagpur  High Court,  in Md.  Gulam Mustafakhan v. Padamsi (1)  held  that the  partner  who paid the amount could  legally  claim  the other  partner’s  share  of the  loss.   The  learned  Judge reiterated  the  same principle accepted  in  the  decisions cited supra, when he said at page  49: "  Section  30 of the Indian Contract Act  does  not  affect agreements      or      transactions      collateral      to wagers.........    ." The   said  decisions  were  based  upon  the   well-settled principle  that a wagering contract was only void,  but  not illegal,  and  therefore  a  collateral  contract  could  be enforced. Before  closing  this branch of the discussion,  it  may  be convenient  to  consider a subsidiary point  raised  by  the learned Counsel for the appellant that though a contract  of partnership  was not illegal, in the matter  of  accounting, the   loss  paid  by  one  of  the  partners   on   wagering transactions,   could  not  be  taken  into   consideration. Reliance is placed in support of this contention on Chitty’s Contract, p. 495, para. 908, which reads: " Inasmuch as betting is not in itself illegal, the law does not refuse to recognise a partnership formed for the purpose of  betting.  Upon the dissolution of such a partnership  an account may be ordered.  Each partner has a right to recover his  share of the capital subscribed, so far as it  has  not been  spent;  but he cannot claim an account of  profits  or repayments  of amounts advanced by him which  have  actually been applied in paying the bets of the partnership." In support of this view, two decisions are cited.  They are: Thwaites  v. Coulthwaite (2 ) and Saffery v. Mayer(3).   The first  case  has  already been  considered  by  us.   There, Chitty,  J.,  in giving a decree for account left  open  the question  of  the legality of certain transactions  till  it arose on the taking of the (1) A.I.R. (1923) Nag. 48.         (2) (1896) 1 Ch. 496. (3) L.R. (1901) 1 K.B. 11. 431 account.   Far from helping the appellant, the  observations

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and   the   actual  decision  in  that  case   support   the respondents’ contention.  The reservation of the question of particular  transactions  presumably  related  only  to  the transactions  prohibited by the Betting Act, 1853.  Such  of the transactions which were so prohibited by the Betting Act would  be illegal and therefore the contract of  partnership could not operate on such transactions.  The case of Saffery v. Mayer(1) related to a suit for recovery of money advanced by  one  person  to another for the purpose  of  betting  on horses  on  their joint account.  The appellate  Court  held that  by reason of the provisions of the Gaming  Act,  1892, the  action  was not maintainable.   This  decision  clearly turned upon the provisions of the Gaming, Act, 1892.  Smith, M.  R.,  observed that the plaintiff paid the money  to  the defendant  in respect of a contract rendered null  and  void and  therefore it was not recoverable under the second  limb of  that section.  The other Lord Justices also based  their judgments on the express words of the Gaining Act, 1892.  It will  be also interesting to note that the Court  of  Appeal further pointed out that Chitty, J., in Thwaites’ Case(2) in deciding in the way he did omitted to consider the effect of the  provisions of the Gaming Act, 1892, on the question  of maintainability  of  the action before him.   The  aforesaid passage in Chitty’s Contract must be understood only in  the context of the provisions of the Gaming Act, 1892. The  aforesaid discussion yields the following results:  (1) Under the common law of England a contract of wager is valid and  therefore  both  the primary contract as  well  as  the collateral agreement in respect thereof are enforceable; (2) after the enactment of the Gaming Act, 1845, a wager is made void but not illegal in the sense of being forbidden by law, and  thereafter a primary agreement of wager is void  but  a collateral  agreement  is  enforceable;  (3)  there  was   a conflict on the question whether the second part of s. 18 of the Gaming Act, 1845, would cover a case for the recovery of money or valuable thing alleged to be won upon (1) L.R. (1901) 1 K.B. 11.     (2) (1896) 1 Ch. 496. 432 any  wager  under a substituted contract  between  the  same parties:  the House of Lords in Hill’s Case,(1) had  finally resolved  the conflict by holding that such a claim was  not sustainable whether it was made under the original  contract of  wager  between  the  parties  or  under  a   substituted agreement  between them; (4) under the Gaming Act, 1892,  in view  of  its  wide  and  comprehensive  phraseology,   even collateral contracts, including partnership agreements,  are not  enforceable;  (5) s. 30 of the Indian Contract  Act  is based upon the provisions of s. 18 of the Gaming Act,  1845, and  though  a wager is void and unenforceable,  it  is  not forbidden  by law and therefore the object of  a  collateral agreement  is not unlawful under s. 23 of the Contract  Act; and (6) partnership being an agreement within the meaning of s. 23 of the Indian Contract Act, it is not unlawful, though its  object  is  to carry  on  wagering  transactions.   We, therefore, hold that in the present case the partnership  is not unlawful within the meaning of s. 23(A) of the  Contract Act. Re.   (ii)-Public  Policy:  The  learned  Counsel  for   the appellant contends that the concept of public policy is very comprehensive   and  that  in  India,   particularly   after independence,  its content should be measured having  regard to  political,  social and economic policies  of  a  welfare State, and the traditions of this ancient country  reflected in  Srutis, Smritis and Nibandas.  Before adverting  to  the argument  of the learned Counsel, it would be convenient  at

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the  outset to ascertain the meaning of this concept and  to note how the Courts in England and India have applied it  to different situations.  Cheshire and Fifoot in their book  on " Law of Contract ", 3rd Edn., observe at page " 280 thus: ’ The  public  interests which is designed to protect  are  so comprehensive and heterogeneous, and opinions as to what  is injurious must of necessity vary so greatly with the  social and moral convictions, and at times even with the  political views, of different judges, that it forms a treacherous  and unstable (1)  (1921) 2 K.B. 351. 433 ground for legal decision  These questions have agitated the Courts  in the past, but the present state of the law  would appear to be reasonably clear.  Two observations may be made with some degree of assurance. First,  although the rules already established by  precedent must  be  moulded to fit the new conditions  of  a  changing world, it is no longer legitimate for the Courts to invent a new head of public policy.  A judge is not free to speculate upon what, in his opinion, is for the good of the community. He  must be content to apply, either directly or by  way  of analogy,  the’ principles laid down in  previous  decisions. He  must expound, not expand, this particular branch of  the law. Secondly, even though the contract is one which prima  facie falls under one of the recognized heads of public policy, it will  not be held illegal unless its harmful  qualities  are indisputable.   The  doctrine, as Lord Atkin remarked  in  a leading  case,  " should only be invoked in clear  cases  in which the harm to the public is substantially incontestable, and  does not depend upon the idiosyncratic inferences of  a few judicial minds    .......... In popular language ... the contract should be given the benefit of the doubt "." Anson  in his Law of Contract states the same rule thus,  at p. 216: "Jessel,  M. R., in 1875, stated a principle which is  still valid  for  the  Courts,  when  he  said:  ’-You  have  this paramount  public  policy  to consider,  that  you  are  not lightly to interfere with the freedom of contract ’; and  it is  in  reconciling freedom of contract  with  other  public interests which are regarded as of not less importance  that the difficulty in these cases arises..... We  may  say, however, that the policy of the  law  has,  on certain  subjects,  been  worked into  a  set  of  tolerably definite  rules.   The application of  these  to  particular instances  necessarily  varies with the  conditions  of  the times and the progressive development of public opinion  and morality, but, as Lord Wright has said  public policy,  like any other branch of the Common     Law,  ought to be, and  I think is, governed by 55 434 the judicial use of precedents.  If it is said that rules of public policy have to be moulded to suit new conditions of a changing  world, that is true; but the same is true  of  the principles of the Common Law generally.  " In  Halsbury’s  Laws  of  England, 3rd  Edn.,  Vol.  8,  the doctrine is stated at p. 130 thus: " Any agreement which tends to be injurious to the public or against the public good is void as being contrary to  public policy................. It seems, however, that this  branch of the law will not be extended.  The determination of  what is  contrary to the so-called policy of the law  necessarily varies from time to time.  Many transactions are upheld  now

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which  in  a former generation would have  been  avoided  as contrary  to  the  supposed policy of  the  law.   The  rule remains,  but  its application varies  with  the  principles which for the time being guide public opinion.  " A  few of the leading cases on the subject reflected in  the authoritative statements ’of law by the various authors  may also  be  useful to demarcate the limits  of  this  illusive concept. Parke,  B.,  in Egerton v. Brownlow(1), which is  a  leading judgment  on the subject, describes the doctrine  of  public policy thus at p. 123: "’I  Public policy’ is a vague and unsatisfactory term,  and calculated to lead to uncertainty and error, when applied to the  decision  of  legal  rights; it  is  capable  of  being understood  in  different senses; it may, and does,  in  its ordinary sense, mean I political expedience’, or that  which is  best for the common good of the community; and  in  that sense  there may be every variety of opinion,  according  to education, habits, talents, and dispositions of each person, who is to decide whether an act is against public policy  or not.   To  allow this to be a ground of  judicial  decision, would lead to the greatest uncertainty and confusion.  It is the  province  of  the statesman, and  not  the  lawyer,  to discuss,  and of the Legislature to determine, what is  best for  the  public  good,  and to provide  for  it  by  proper enactments.  It 1s the province of the judge (1)  4 H.L.C. 1, 123; 10 E.R. 359,408. 435 to expound the law only; the written from the statutes;  the unwritten   or  common  law  from  the  decisions   of   our predecessors  and of our existing Courts, from text  writers of  acknowledged  authority, and upon the principles  to  be clearly   deduced  from  them  by  sound  reason  and   just inference;  not to speculate upon what is the best,  in  his opinion, for the advantage of the community.  Some of  these decisions may have no doubt been founded upon the prevailing and  just  opinions of the public good ; for  instance,  the illegality  of covenants in restraint of marriage or  trade. They  have become a part of the recognised law, and  we  are therefore  bound by them, but we are not thereby  authorised to  establish as law everything which we may think  for  the public   good,  and  prohibit  everything  which  we   think otherwise.  " In  Janson  v. Driefontein Consolidated  Mines,  Ltd.(1)  an action  raised  against British underwriters in  respect  of insurance  of treasures against capture during  its  transit from  a foreign state to Great Britain was resisted  by  the underwriters  on the ground that the insurance  was  against public policy.  The House of Lords rejected the plea.   Earl of Halsbury, L.C., in his speech made weighty  observations, which  may usefully be extracted.  The learned Lord says  at page 491: In  treating of various branches of the law learned  persons have  analysed  the sources of the law, and  have  sometimes expressed  their opinion that such and such a  provision  is bad because it is contrary to public policy; but I deny that any  Court  can invent a new head of public policy  ;  so  a contract   for  marriage  brokerage,  the  creation   of   a perpetuity,  a contract in restraint of trade, a  gaming  or wagering contract, or, what is relevant here, the  assisting of the King’s enemies, are all undoubtedly unlawful  things; and  you  may say that it is because they  are  contrary  to public  policy  they are unlawful; but it is  because  these things  have  been either enacted or assumed to  be  by  the common law unlawful, and not because a judge or Court have a

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right to declare that such and such (1)  (1902) A.C. 484. 436 things  are in his or their view contrary to public  policy. Of  course,  in  the  application  of  the  principles  here insisted on, it is inevitable that the particular case  must be  decided by a judge; he must find the facts, and he  must decide  whether the facts so found do or do not come  within the principles which I have endeavoured to describe-that is, a  principle of public policy, recognised by the law,  which the  suggested  contract is infringing, or  is  supposed  to infringe.  " These  observations  indicate that the  doctrine  of  public policy  is  only  a  branch of common  law  and  unless  the principle of public policy is recognised by that law,  Court cannot  apply it to invalidate a contract.  Lord Lindley  in his  speech  at p. 507 pointed out that public policy  is  a very  unstable  and dangerous foundation on which  to  build until made safe by decision.  A promise made by one  spouse, after a decree nisi for the dissolution of the marriage  has been  pronounced, to marry a third person after  the  decree has  been made absolute is not void as being against  public policy:  see Fender v. St. John-Mildmay (1).  In  that  case Lord Atkin states the scope of the doctrine thus at p. 12: "  In popular language, following the wise aphorism  of  Sir George Jessel cited above, the contract should be given  the benefit of the doubt. But there is no doubt that the rule exists.  In cases  where the promise to do something contrary to public policy  which for  short  I  will  call a  harmful  thing,  or  where  the consideration for the promise is the doing or the promise to do a harmful thing a judge, though he is on slippery ground, at  any rate has a chance of finding a  footing........  But the doctrine does not extend only to harmful acts, it has to be applied to harmful tendencies.  Here the ground is  still less safe and more treacherous ". Adverting  to the observation of Lord Halsbury in Janson  v. Driefontein  Consolidated Mines Ltd.  Lord  Atkin  commented thus, at page 11: "...............  Lord  Halsbury indeed appeared  to  decide that the categories of public policy are closed, (1) (1938) A. C. 1. (2) (1902) A.C. 484. 437 and that the principle could not be invoked anew unless  the case could be brought within some principle of public policy already recognised by the law.  I do not find, however, that this  view received the express assent of the other  members of  the House; and it seems to me, with respect, too  rigid. On  the  other  hand,  it  fortifies  the  serious   warning illustrated  by the passages cited above that  the  doctrine should  only be invoked in clear cases in which the harm  to the  public  is substantially incontestable,  and  does  not depend  upon the idiosyncratic inferences of a few  judicial minds ". Lord Thankerton summarised his view in the following  terms, at p. 23: " In the first place, there can be little question as to the proper  function  of  the Courts,  in  questions  of  public policy.   Their duty is to expound, and not to expand,  such policy.   Thai  does not mean that they are  precluded  from applying  ail existing principle of public policy to  a  new set  of circumstances, where such circumstances are  clearly within  the  scope of the policy.  Such a  case  might  well arise in the case of safety of the State, for instance.  But

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no such case is suggested here.  Further, the Courts must be watchful  not  to be influenced by their view  of  what  the principle of public policy, or its limits, should be ". Lord Wright, at p. 38, explains the two senses in which  the words " public policy" are used : "  In  one  sense every rule of law, either  common  law  or equity,  which  has been laid down by the  Courts,  in  that course of judicial legislation which has evolved the law  of this  country,  has been based on considerations  of  public interest  or policy.  In that, sense Sir George  Jessel,  M. R.,  referred  to the paramount public  policy  that  people should  fulfil  their contracts.  But public policy  in  the narrower sense means that there are considerations of public interest  which  require  the Courts to  depart  from  their primary  function of enforcing contracts, and  exceptionally to  refuse to enforce them.  Public policy in this sense  is disabling 438 Then  the  noble  Lord proceeds to lay  down  the  following principles  on which a judge should exercise  this  peculiar and  exceptional jurisdiction: (1) It is clear  that  public policy is not a branch of law to be extended ; (2) it is the province  of the judge to expound the law only;  (3)  public policy, like any other branch of the common law, is governed by  the  judicial use of precedents ; and (4)  Courts  apply some recognised principles to the new conditions, proceeding by  way of analogy and according to logic  and  convenience, just  as Courts deal with any other rule of the common  law. The learned Lord on the basis of the discussion of case  law on the subject observes at p. 40: " It is true that it has been observed that certain rules of public policy have to be moulded to suit now conditions of a changing  world  :  but that is true of  the  principles  of common law generally.  I find it difficult to conceive  that in  these  days  any  new head of  public  policy  could  be discovered ". The  observations  of  the aforesaid Law  Lords  define  the concept  of  public policy and lay down the  limits  of  its application in the modern times.  In short, they state  that the  rules  of  public  policy  are’  well-settled  and  the function  of  the Courts is only to expound them  and  apply them  to  varying  situations.  While Lord  Atkin  does  not accept Lord Halsbury’s dictum that the categories of  public policy  are  closed, he gives a warning  that  the  doctrine should  be invoked only in clear cases in which the harm  to the  public is substantially incontestable, Lord  Thankerton and  Lord  Wright  seem to suggest that  the  categories  of public - policy are well-settled and what the Courts at best can   do  is  only  to  apply  the  same  to  new   set   of circumstances.  Neither of them excludes the possibility  of evolving  a new bead of public policy in a  changing  world, but  they  could  not  conceive  that  under  the   existing circumstances any such head could be discovered. Asquith,  L.  J.,  in  Monkland v.  Jack  Barclay  Ltd.  (1) restated the law crisply at p. 723: "The Courts have again and again said, that where a contract does not fit into one or other of these (1)  (1951) 1 All E.R. 714. 439 pigeon-holes  but  lies  outside this  charmed  circle,  the courts  should use extreme reserve in holding a contract  to be void as against public policy, and should only do so when the  contract is incontestably and on any view  inimical  to the public interest ". The Indian cases also adopt the same view.  A division bench

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of the Bombay High Court in Shrinivas Das Lakshminarayan  v. Ram Chandra Ramrattandas observed at p. 20: "  It  is  no  doubt open to the  Court  to  hold  that  the consideration  or object of an agreement is unlawful on  the ground  that  it  is opposed to what the  Court  regards  as public  policy.   This  is laid down in section  23  of  the Indian  Contract  Act and in India therefore  it  cannot  be affirmed as a matter of law as was affirmed by Lord Halsbury in  Janson v. Driefontein Consolidated Mines, Limited  (1902 A. C. 484 at p. 491) that no Court can invent a new head  of public policy, but the dictum of Lord Davey in the same case that  "  public policy is always an unsafe  and  treacherous ground  for  legal  decision " may be accepted  as  a  sound cautionary maxim in considering the reasons assigned by  the learned Judge for his decision ". The  same  view  is  confirmed  in  Bhagwant  Genuji   Girme v.Gangabisan  Ramgopal (2) and Gopi Tihadi v.  Gokhei  Panda (3).  The doctrine of public policy may be summarized  thus: Public  policy  or  the policy of the  law  is  an  illusive concept; it has been described as " untrustworthy guide ", " variable  quality  ", " uncertain one ", " unruly  horse  ", etc.  ; the primary duty of a Court of Law is to  enforce  a promise  which  the  parties have made  and  to  uphold  the sanctity  of contracts which form the basis of society,  but in  certain cases, the Court may relieve them of their  duty on  a rule founded on what is called the public policy;  for want  of  better words Lord Atkin describes  that  something done  contrary to public policy is a harmful thing, but  the doctrine  is extended not only to harmful cases but also  to harmful tendencies; this doctrine of public policy is only a branch of common law, and, (1) I.L.R. (1920) 44 Bom. 6.  (2) I.L.R. 1941 Bom- 71. (3) I.L.R. 1953 Cuttack 558. 440 just like any other branch of common law, it is governed  by precedents;  the  principles have  been  crystallized  under different  heads and though it is permissible for Courts  to expound  and apply them to different situations,  it  should only be invoked in clear and incontestable cases of harm  to the  public;  though  the heads are not  closed  and  though theoretically  it  may be permissible to evolve a  new  head under  exceptional circumstances of a changing world, it  is advisable  in  the interest of stability of society  not  to make any attempt to discover new heads in these days. This leads us to the question whether in England or in India a  definite principle of public policy has been  evolved  or recognized  invalidating  wagers.   So  far  as  England  is concerned,  the passages from text-books extracted  and  the decisions  discussed  in  connection with  the  first  point clearly  establish that there has never been such a rule  of public policy in that country.  Courts under the common law’ of  England till the year 1845 enforced such contracts  even between  parties to the transaction.  They held that  wagers were  not illegal.  After the passing of the English  Gaming Act, 1845 (8 & 9 Vict. c. 109), such contracts were declared void.   Even  so;  the Courts held that  though  a  wagering contract  was  void,  it was not illegal  and  therefore  an agreement  collateral  to  the wagering  contract  could  be enforced.  Only after the enactment of the Gaming Act,  1892 (55  Vict.  c.  9), the  collateral  contracts  also  became unenforceable  by reason of the express words of  that  Act. Indeed, in some of the decisions cited supra the question of public  policy  was  specifically raised  and  negatived  by Courts: See Thacker v. Hardy (1); Hyams v. Stuart King (2) ; and  Michael  Jeffrey  &  Company v.  Bamford  (3).   It  is

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therefore  abundantly clear that the common law  of  England did  not recognize any principle of public policy  declaring wagering contracts illegal. The legal position is the same in India.  The Indian Courts, both before and after the passing of the Act (1) (1878) L.R. 4 Q.B. 685.    (2) [1908] 2 K.B. 696. (3) (1949) 2 All E. R. 452. 441 21 of 1848 and also after the enactment of the Contract Act, have  held that the wagering contracts are not  illegal  and the  collateral  contracts  in  respect  of  GI.  them   are enforceable.   We have already referred to these in  dealing with  the first point and we need not A,, cover  the  ground once  again, except to cite a passage from the  decision  of the   Judicial  Committee  in  Ramloll  Thackoorseydass   v. Soojumnull Dhondmull (1), which is directly in point.  Their Lordships  in considering the applicability of the  doctrine of public policy to a wagering contract observed at p. 350: " We are of opinion, that, although, to a certain degree, it might  create a temptation to do what was wrong, we are  not to presume that the parties would commit a crime; and as  it did  not interfere with the performance of any duty, and  as if  the  parties were not induced by it to commit  a  crime, neither  the interests of individuals or of  the  Government could  be affected by it, we cannot say that it is  contrary to public policy." There  is not a single decision after the above cited  case, which was decided in 1848, up to the present day wherein the Courts  either  declared wagering contracts  as  illegal  or refused  to  enforce any collateral contract in  respect  of such  wagers,  on  the ground of  public  policy.   It  may, therefore,  be  stated without any  contradiction  that  the common  law of England in respect of wagers was followed  in India  and  it  has always been held  that  such  contracts, though  void after the Act of 1848, were not  illegal.   Nor the  legislatures  of the States excepting Bombay  made  any attempt  to  bring  the  law in  India  in  line  with  that obtaining  in  England  after the  Gaming  Act,  1892.   The Contract  Act was passed in the year 1872.  At the  time  of the  passing of the Contract Act, there was a Central  -Act, Act 21 of 1848, principally based on the English Gaming Act, 1845.   There  was also the Bombay Wagers  (Amendment)  Act, 1865,  amending the former Act in terms analogous  to  those later enacted by the Gaming Act, 1892.  Though the Contract (1)  (1848) 4 M.I.A. 339. 56 442 Act  repealed the Act 21 of 1848, it did not incorporate  in it  the provisions similar to those of the Bombay  Act;  nor was  any  amendment made subsequent to the  passing  of  the English Gaming Act, 1892.  The legislature must be deemed to have had the knowledge of the state of law in England,  and, therefore,  we may assume that it did not think fit to  make wagers  illegal  or  to hit at  collateral  contracts.   The policy  of  law in India has therefore been to  sustain  the legality of wagers. The history of the law of gambling in India would also  show that  though gaming in certain respects was  controlled,  it has  never  been absolutely prohibited.  The  following  are some of the gambling Acts in India: The Public Gambling  Act (111 of 1867); The Bengal Public Gambling Act (11 of  1867); The  Bombay Prevention of Gambling Act (IV of 1887);  Madhya Bharat  Gambling  Act(LI  of 1949);  Madhya  Pradesh  Public -Gambling  Act; Madras Gaming Act (111 of 1930); The  Orissa Prevention of Gambling Act (XVII of 1955); the Punjab Public

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Gambling  Act (111 of 1867); the Rajasthan  Public  Gambling Ordinance  (Ordinance  XLVIII of 1949) and the  U.P.  Public Gambling  Act.   These Acts do not prohibit  gaming  in  its entirety,  but aim at suppressing gaming in  private  houses when carried on for profit or gain of the owner or  occupier thereof   and  also  gaming  in  public.    Gaming   without contravening  the  provisions  of the said  Acts  is  legal. Wherever the State intended to declare a particular form  of gaming illegal, it made "an express statute to that  effect: See  s. 29-A of the Indian Penal Code.  In  other  respects, gaming and wagering are allowed in India.  It is also common knowledge that horse races are allowed throughout India  and the State also derives revenue therefrom. The  next  question  posed by the learned  Counsel  for  the appellant is whether under the Hindu Law it can be said that gambling  contracts  are held to be  illegal.   The  learned Counsel  relies upon the observations of this Court  in  The State  of  Bombay  v.  R. M.  D.  Chamarbaugwala  (1).   The question raised in that case was (1)  [1957] S.C.R. 874. 443 whether the Bombay Lotteries and Prize’ Competition  Control and Tax (Amendment) Act of 1952 extending the definition  of " prize competition " contained in s. 2(1)(d) of the  Bombay Lotteries and Prize Competition Control and Tax Act of 1948, so  as  to  include prize  competition  carried  on  through newspapers  printed  and published outside  the  State,  was constitutionally  valid, It was contended, inter alia,  that the  Act offended the fundamental right of the  respondents, who were conducting prize competitions, under Art. 19(1) (g) of the Constitution and also violated the freedom of  inter- State trade under Art. 301 thereof This Court held that  the gambling  activities in their very nature and  essence  were extra  commercium and could not either be trade or  commerce within the meaning of the aforesaid provisions and therefore neither the fundamental right of the respondents under  Art. 19(1)(g) or their right to freedom of interState trade under Art.  301  is  violated.  In that context Das,  C.  J.,  has collected   all   the  Hindu  Law  texts  from   Rig   Veda, Mahabharata,  Manu,  Brihaspati, Yagnavalkya, etc.,  at  pp. 922-923.  It is unnecessary to restate them here, but it  is clear  from  those texts that Hindu sacred  books  condemned gambling in unambiguous terms.  But the question is  whether those ancient text-books remain only as pious wishes of  our ancestors or whether they were enforced in the recent centu- ries.   All  the  branches of the Hindu Law  have  not  been administered  by Courts in India; only  questions  regarding succession, inheritance, marriage, and religious usages  and institutions are decided according to the Hindu Law,  except in  so  far  as such law has  been  altered  by  legislative enactment.  Besides the matters above referred to, there are certain additional matters to which the Hindu Law is applied to   the  Hindus,  in  some  cases  by  virtue  of   express legislation  and  in  others on the  principle  of  justice, equity  and  good conscience.  These matters  are  adoption, guardianship, family relations, wills, gifts and  partition. As  to  these matters also the Hindu Law is  to  be  applied subject to such alterations as have been made by legislative enactments: See Mulla’s Hindu Law, para. 444 3,  p.  2. In other respects the ancient Hindu Law  was  not enforced  in  Indian  Courts and it may be  said  that  they became  obsolete.  Admittedly there, has not been  a  single instance  in  recorded cases holding  gambling  or  wagering contracts  illegal on the ground that they are  contrary  to

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public  policy  as they offended the principles  of  ancient Hindu  Law.  In the circumstances, we find it  difficult  to import  the tenets of Hindu Law to give a novel  content  to the  doctrine  of public policy in respect of  contracts  of gaming and wagering. To  summarize: The common law of England and that  of  India have  never struck down contracts of wager on the ground  of public policy ; indeed they have always been held to be  not illegal  notwithstanding the fact that the statute  declared them void.  Even after the contracts of wager were  declared to  be void in England, collateral contracts  were  enforced till  the passing of the Gamina Act of 1892, and  in  India, except in the State of Bombay, they have been enforced  even after  the  passing  of  the  Act  21  of  1848,  which  was substituted  by  s.  30  of the  Contract  Act.   The  moral prohibitions  in Hindu Law texts against gambling  were  not only  not  legally enforced but were allowed  to  fall  into desuetude.   In practice, though gambling is  controlled  in specific matters, it has not been declared illegal and there is  no law declaring wagering illegal.  Indeed, some of  the gambling  practices are a perennial source of income to  the State.   In  the circumstances it is not -possible  to  hold that  there  is  any definite head or  principle  of  public policy  evolved by Courts or laid down by  precedents  which would  directly apply to wagering contracts.  Even if it  is permissible for Courts to evolve a new head of public policy under    extraordinary   circumstances   giving   rise    to incontestable harm to the society, we cannot say that  wager is one of such instances of exceptional gravity, for it  has been recognized for centuries and has been tolerated by  the public and the State alike. If it has any such tendency,  it is  for  the  legislature to make  a  law  prohibiting  such contracts and declaring them illegal and not for this  Court to resort to judicial legislation. 445 Re.  Point  3-Immorality: The argument under  this  head  is rather  broadly  stated  by  the  learned  Counsel  for  the appellant.  The learned counsel attempts to draw an  analogy from  the  Hindu  Law  relating to  the  doctrine  of  pious obligation  of  sons to discharge their father’s  debts  and contends that what the Hindu Law considers to be immoral  in that context may appropriately be applied to a case under s. 23 of the Contract Act. - Neither any authority is cited nor any  legal basis is suggested for importing the doctrine  of Hindu  Law into the domain of contracts.  Section 23 of  the Contract Act is inspired by the common law of England and it would be more useful to refer to the English Law than to the Hindu  Law texts dealing with a different matter.  Anson  in his Law Of Contracts states at p. 222 thus : " The only aspect of immorality with which Court of Law have dealt  is sexual immorality............. ." Halsbury in  his Laws  of England, 3rd Edn., Vol. makes a similar  statement, at p. 138: " A contract which is made upon an immoral consideration  or for  an  immoral purpose is unenforceable and  there  is  no distinction  in  this respect between  immoral  and  illegal contracts.   The  immorality  here  alluded  to  is   sexual immorality." In the Law of Contract by Cheshire and Fifoot, 3rd Edn.,  it is stated at p. 279: "  Although  Lord  Mansfield laid it down  that  a  contract contra  bonos mores is illegal, the law in  this  connection gives  no extended meaning to morality but  concerns  itself only  with what is sexually reprehensible." In the  book  on the Indian Contract Act by Pollock and Mulla it is stated at

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p. 157: " The epithet " immoral " points, in legal usage, to conduct or  purposes which the State, though disapproving  them,  is unable, or not advised, to visit with direct punishment." The learned authors confined its operation to acts which are considered  to  be  immoral according to  the  standards  of immorality approved by Courts.  The case law both in England and  India confines the operation of the doctrine to  sexual immorality.  To cite 446 Only   some  instances:  settlements  in  consideration   of encubinage,  contracts of sale or hire of things to be  used in  a brothel or by a prostitute for purposes incidental  to her  profession, agreements to pay money for future  illicit cohabitation,   promises   in   regard   to   marriage   for consideration,  or  contracts facilitating divorce  are  all held to be void on the ground that the object is immoral. The  word  "  immoral  "  is  a  very  comprehensive   word. ordinarily  it  takes in every aspect  of  personal  conduct deviating  from the standard norms of life.  It may also  be said  that what is repugnant to good conscience is  immoral. Its  varying content depends upon time, place and the  stage of  civilization  of  a particular society.   In  short,  no universal  standard  can be laid down and any law  based  on such fluid concept defeats its own purpose.  The  provisions of  s.  23  of the Contract  Act  indicate  the  legislative intention   to   give   it  a   restricted   meaning.    Its juxtaposition  with  an  equally  illusive  concept,  public policy,  indicates  that it is used in a  restricted  sense; otherwise  there would be overlapping of the  two  concepts. In  its  wide sense what is immoral may  be  against  public policy,  ’for  public policy covers  political,  social  and economic   ground   of   objection.    Decided   cases   and authoritative  text-book’ writers, therefore,  confined  it, with  every justification, only to sexual  immorality.   The other  -  limitation  imposed on the word  by  the  statute, namely, " the court regards it as immoral ", brings out  the idea  that  it is also a branch of the common law  like  the doctrine  of  public  policy,  and,  therefore,  should   be confined to the Principles recognized and settled by Courts. -Precedents confine the said concept only to sexual  immora- lity and no case has been brought to our notice where it has been  applied to any head other than sexual immorality.   In the  circumstances,  we cannot evolve a new head  so  as  to bring in wagers within its fold. Lastly  it  is  contended by the  learned  Counsel  for  the appellant that wager is extra-commercium and therefore there cannot be in law partnership for wager within the meaning of s.  4  of the Partnership Act; for  partnership  under  that section is relationship between 447 persons who have agreed to share the profits of a  business. Reliance  is  placed in respect of this  contention  on  the decision  of this Court in The State of Bombay v. R.  M.  D. Chamarbaugwala  (1).   This question was not raised  in  the pleadings.   No issue was framed in respect of it.  No  such case  was argued before the learned Subordinate Judge or  in the High Court; nor was this point raised in the application for  certificate  for leave to appeal to the  Supreme  Court filed  in  the  High Court.  Indeed,  the  learned  Advocate appearing  for the appellant in the High Court  stated  that his  client  intended to raise one  question  only,  namely, whether  the partnership formed for the purpose of  carrying on a business in differences was illegal within the  meaning of  s.  23 of the Contract Act.  Further this plea  was  not

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specifically disclosed in the statement of case filed by the appellant in this Court.  If this contention had been raised at  the earliest point of time, it would have been  open  to the  respondents  to  ask for a suitable  amendment  of  the plaint to sustain their claim.  In the circumstances, we  do not  think  that  we  could  with  justification  allow  the appellant  to raise this new plea for the first time  before us,   as  it  would  cause  irreparable  prejudice  to   the respondents.  We express no opinion on this point. For  the  foregoing  reasons  we must  hold  that  the  suit partnership was not unlawful within the meaning of s. 23  of the Indian Contract Act. In the result, the appeal fails and is dismissed with costs. Appeal dismissed. (1) [1957] S.C.R. 874. 448