Decided on May 09,1952

SHANKAR RAM Respondents

Referred Judgements :-



Sharma, J - (1.)THIS is the defendants' second appeal, and arises out of a suit filed by the plaintiff Shanker Ram against them for the recovery of Rs. 877/13/. It was alleged in the plaint that the defendants had given a document Ex. 1 for the sum of Rs. 918/13/-, which was found due from them on the 18th of May, 1947, for previous accounts. Out of this sum, a sum of Rs. 180/- was paid. The plaintiff claimed Rs. 738/13/- on account of principal and Rs. 139/- on account of interest at the rate of 12% per annum. The defendant Prabhu Dayal did not file any written statement. Totaram, however, filed one. His defence was that he had not borrowed any amount in cash from the plaintiff, but that the amount sued for was due for the loss on certain transactions (Souda Satta ). It was pleaded that the said transactions were wagering transactions, and were, therefore, void. It was also prayed in the written statement that if any amount was held due against the defendants, they be allowed to pay it in* yearly instalments of Rs. 60/ -. Prabhu Dayal who did not file any written statement of his own adopted the written statement of Totaram.
(2.)THE court of first instance held that no advances were made in cash by the plaintiff to the defendants, and that the document in question was executed for the payment of dues arising out of contracts which were wagering contracts. THE suit was consequently dismissed. On appeal, the learned Senior Civil Judge, Khetri, held that the defendants failed to prove that the amount evidenced by Ex. 1 arose out of losses from any wagering contracts. He consequently reversed the decree of the first court, and decreed the suit, but he ordered payment of the decretal amount in six monthly instalments of Rs. 100/ -. Against this decree of the appellate court, the defendants have come in appeal, and the plaintiff has filed cross-objections objecting to the instalment order.
Taking up the appeal first, it was argued by the learned counsel for the appellants that the evidence of the defendants fully proved that the amount evidenced by Ex. 1 was not due on account of any cash advances. The evidence proved that the sum was due on account of contracts which were wagering contracts. It was pointed out that Totaram defendant had sworn that he was a munim at the plaintiff's shop, and as such he entered into certain forward transactions in silver, which the plaintiff's firm used to do through the Loharu Trading Company Limited. It was argued that these contracts in silver were wagering contracts, as no delivery was contemplated and only differences were to be paid and received on due dates. It was further contended that the plaintiffs son Gigraj, who was in the know of the transactions, had not come into the witness box, and, therefore, every presumption should be raised against the plaintiff. On behalf of the respondent, it was argued that the plaintiff's case was that a certain amount was due from the defendants on past accounts, and that they had given a document evidencing that amount. The defendants did not deny that the said sum was due. Their only contention was that the amount sued for was due on account of wagering contracts. The burden of proving that the contracts were wagering contracts was on the defendants, and they had totally failed to prove it. Under the circumstances, there was no answer to the plaintiff's suit, and the lower appelate court was justified in decreeing the suit.

I have considered the arguments of both the learned counsel. The defendants do not dispute the correctness of the amount evidenced by Ex. 1. Their contention is that no amount was paid in cash to them, and that the amount arose out of the loss from wagering contracts. It was for the defendants to prove that the amount evidenced by Ex. 1 was due on account of some contracts, and that those contracts were wagering contracts. As the plaintiff's son Gigraj did not come into the witness box, and the defendant Totaram swore that the amount was due on account of losses in silver transactions, I may take it as established that the amount was due on account of lossees in silver contracts. The question, however, is whether the defendants has been able to prove that the silver transactions in question were wagering contracts. I may quote the very learned and interesting observations of Hawkins, J. in the ruling of the Queen's Bench in the case Carlile vs. The Carbolic Smoke Ball Company. (1) (1392 (2) Q. B. 481.) These observations are at pages 490-91, and are as follows: - '"it is not easy to define with precision what amounts to a wagering contract, nor the narrow line of demarcation which separates a wagering from an ordinary contract; but, according to my view, a wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependant upon the determination of that event one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for making of such contract by either of the parties. It is essential to a wagering contract that each party may under it either win or lose, whether he will win or lose being dependant on the issue of the event, and, therefore, remaining uncertain until that issue is knowa. If either of the parties may win but cannot lose, or may lose but cannot win it is not a wagering contract. It is also essential that there should be mutuality in the contract. For instance, if the evidence of the contract is such as to make the intentions of the parties material in the consideration of the question whether it is a wagering one or not, and those intentions are at variance, those of one party being such if agreed in by the other would make the contract a wagering one, whilst those of the other would prevent it from becoming so, this want of mutuality would destroy the wagering element of the contract and leave ft enforceable by law as an ordinary one. "

In Sukhdevdoss Ramprasad vs. Govindass Chathurbhujdoss and Co. , (1) (A. I. R. 1923 Privy Council 30.) their Lordships of the Privy Council decided as follows: "the mere fact that contracts are highly speculative is insufficient in itself to render them void as wagering contracts; to produce that result there must be proof that the contracts were entered into upon the terms that performance of the contracts should not be demanded but that differences only should become payable. "

Again in Ram Din Hazari Lal vs. Mansa Ram Murlidhar (2) (A. I. R. 1929 All. 890.), the Privy Council case Sukhdevdoss Ramprasad vs. Govindoss Chathurbhuja-doss and Co. (1) was relied on, and it was held that - "the mere fact that the contracts are of a highly speculative character is insufficient in itself to render them void as wagering contracts. To produce the result of a wager there must be proof that the contracts were entered into upon the terms that the performance of the contract should not be demanded, but that differences only should become payable. " It was, therefore, for the defendants to prove that there was a mutual agreement between the parties that delivery shall not be called for, and that only differences shall be paid at the rate obtaining on due date. It cannot be said that the defendants have been able to prove these factors, which were necessary for holding the contracts to be wagering contracts. The only thing that the defendants have said is that money was due on account of souda satta. I am asked to draw an inference from this expression that the contracts were wagering contracts. The learned counsel for the appellants has not been able to satisfy me that simply because certain transactions are described as souda satta, they ought to be taken as wagering contracts.

There are no grounds for disagreeing with the lower appellate court that it was not proved that the amount in suit was due on account of losses from any wagering contracts.

Coming to the cross-objections filed by the plaintiff, I do not find that the lower appellate court exercised its discretion wrongly or illegally. The cross objections too have no force.

The appeal and the cross-objections are both dismissed. The appellants shall pay costs of the plaintiff-respondent of all the courts. I make no order so far as the costs of the cross-objections are concerned. .

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