1babasaheb VS Rajaram (Air 1931 Bom Contract Law

BABASAHEB VS RAJARAM (AIR
1931 BOM .264)

COLLEGE NAME: HINDI VIDYA PRACHAR
SAMITIS COLLEGE OF LAW
NAME OF THE STUDENT: PRACHI
SANJEEV KOKANE
CLASS & SEMESTER: TYBLS 5TH
SEMESTER
ROLL NO. : 11
SUBJECT NAME: LAW OF CONTRACT
INDEX
⦿ WAGERING AGREEMENT
⦿ INTRODUCTION
⦿ ESSENTIAL FEATURES
⦿ RAJARAM VS BABASAHEB CASE LAW
⦿ EFFECTS OF WAGERING AGREEMENT
⦿ CONCLUSION
WAGERING AGREEMENT
⦿ WAGER – In the term wagering agreements, the word wager means an equal
probability of winning and losing a bet on the occurrence of something.
⦿ AGREEMENT – An agreement is a type of a deal in which two parties agree on
completion of some work. Agreements are made when there is no intention of creating
a legal relationship. If there would be any intension of creation of a legal relationship ,
then it would not be an agreement , it would be a contract.
⦿ Wagering agreement - Wagering agreement is an agreement wherein one party
promises to pay / receive money or money’s worth upon the happening or non happening of a
future uncertain event. In other words, parties to a wagering agreement enters into an
agreement upon happening or non happening of an uncertain event and if the uncertain
event does/ does not happen as challenged, then the losing party will pay money or money’s
worth to the winning party. Under this type of agreement, both the parties have equal
chances of winning or losing the wager.
⦿ section 30 of the Indian Contract Act talks about wagering agreements, which reads as
“agreements by way of wager are void”. The section does not define ‘wager.’ Section 30
states that,
“Agreements by way of wager are void; and no suit shall be brought for recovering anything
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.”
INTRODUCTION
⦿ During my childhood, my friends use to bet on small-small things especially on IPL
teams and the deal was usually that one would promise to other to give some
chocolates if his team loses the game and the same was promised to the other party as
well. One day after the outcome of the result the party that lost the bet refused to give
the chocolates to the one who won and they got into a small ﬁght. The one who won the
bet was my best friend and he asked me whether the lost party should have given him
the chocolates or not. I said that the one who lost the bet is obliged to give you because
it was a deal and you both promised each other and breaking promises is a bad habit.
Good guys don’t do it. But now I know that the logic that I gave way back was wrong
and legally the lost party was not bound to give as the deal between them was of
wagering in nature which according to the law is void. This incident was always in the
back of my mind and was one of those topics of contracts that So inspired by this true
story I thought to do a brief analysis on wagering agreements.
ESSENTIAL FEATURES OF
WAGERING AGREEMENTS
⦿ UNCERTAIN EVENT:
⦿ The ﬁrst thing essential to the wager is that the event on which the betting is done
must be uncertain in nature unknown to both the contracting parties.
⦿ MUTUAL CHANCES OF GAIN OR LOSS:

⦿ The second essential feature is that upon the determination of the contemplated event
each party should stand to win or lose. If there are no such mutual chances of gain or
loss, there is no wager./
/
CONTINUED……
RAJARAM VS BABASAHEB
⦿ In this case the facts were:

⦿ There were two wrestlers who had a scheduled wrestling match and they agreed on a
deal . If either of them failed to appear on that, then that person would pay RS 500 to
the other wrestler and the deal winning wrestler would get a total sum of RS 1125 from
the gate money.
⦿ One of them failed to appear and lost the deal and then the other wrestler sued him for
RS 500.
⦿ The defendant contended that the agreement was a wagering contract, but the court
ruled that the agreement was not because it lacked the wagering agreements main
requirement of mutual gain and loss.
CONTINUED…..
⦿ NEITHER PARTY TO HAVE CONTROL OVER THE

EVENT:
Thirdly, neither party should have control over the happening of the event because, “If
one of the parties has the event in his own hands, the transaction lacks an essential
ingredient of a wager” was said by BIRDWOOD J in the case Dayabhai
Tribhovandas v Lakshmichand.
⦿ BOTH THE PARTIES SHOULD HAVE NO OTHER

INTEREST IN THE EVENT OTHER THAN BETTING:
Lastly, neither party should have any interest in the happening of the event other than
the sum or stake he will win or lose. So the sole purpose of the agreement must be
betting. If either of the party has any interest other than that of betting the agreement
would cease to be called as wagering in nature,e.g., an insurable interest in the
contract will not be called as wagering contract. So there must be no other
considerations for the making of such contract by either of such parties. Thus
speculation is not wagering by itself.
EFFECTS OF WAGERING
AGREEMENT
⦿ A wagering agreement is void ab initio, and S. 65 has no application to it. Money paid
directly by a third party to a winner of a bet cannot be recovered from the loser. Even
if a loser makes a new promise to pay for his losses in consideration of his not being
posted, the promise cannot be enforced; but if he gives a cheque in discharge of his
liability, the cheque may not be tainted with illegality because of the winner’s promise
not to have the name posted. The cheques will not be enforceable by the original payee,
but may be enforced by a third party holder of the cheque, even if he knew of the facts
leading up to giving of the cheque.
It has been laid down by the Supreme Court, in

⦿ Gherulal Parekh v.Mahadeo Das :
⦿ That though a wager is void and unenforceable it is not forbidden by law .Hence a
wagering agreement is not unlawful under section 23 of the Contract Act and therefore
the transactions collateral to the main transaction are enforceable.
CONCLUSION
⦿ Not only the horse racing but all other sports and games that have involvement of
skills must also be kept as an exception to wagering agreements and for this, section 30
of Indian contract act needs to be amended.

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BABASAHEB VS RAJARAM (AIR

1931 BOM .264)

⦿ MUTUAL CHANCES OF GAIN OR LOSS:

⦿ In this case the facts were:

⦿ NEITHER PARTY TO HAVE CONTROL OVER THE

⦿ BOTH THE PARTIES SHOULD HAVE NO OTHER

It has been laid down by the Supreme Court, in

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