A very thin line separates the wagering agreements from contingent contracts.

The
inclusiveness of the future uncertain event is the juncture of similarity between the two, but
the difference doesn’t appear on its face.

The fact that former stands unenforceable in India and the latter is used extensively in the
world of commercial transactions makes it necessary for us to understand appropriately the
line of separation so as to avoid unnecessary hindrances which might give lead to futile
litigations. A little understanding of the characteristics of wagering agreements and
contingent contracts prior to engendering legally-binding agreements can prevent the future
dismissal of dealings.

Agreements of wager are void in India. The Indian Contract Act, 1872, declares the
agreements done by way of wager void under section 30. It prescribes:

30. Agreements by way of wager, void. - 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.

Exception in favour of certain prizes for horse racing. - This section shall not be
deemed to render unlawful a subscription or contribution, or agreement to
subscribe or contribute, made or entered into for or toward any plate, prize or sum
of money, of the value or amount of five hundred rupees or upwards, to be rewarded
to the winner or winners of any horse-race.

Section 294-A of the Indian Penal Code not affected. - Nothing in this section
shall be deemed to legalize any transaction connected with horse-racing, to which
the provisions of section 294A(1) of the Indian Penal Code (45 of 1860) apply.

Section 30 of the Act in no way discusses the legality of the wagering agreements, but the
unenforceability. It simply renders the wagering agreement destitute of legal effect. The point
to be noted here is that the said section has although declared agreements by way of wager
void, the absence of any definition of ‘wager’ has engendered legal quandary.

Law understands no grey, but black and white, and black and white only. The space left
uncertain by the legislators had to be fulfilled, and the same has been done by the courts of
law from time to time, but despite legions of litigations and judicial discussions, a state of
perplexity prevails.

Dated back to 1885, the case of Dayabhai Tribhovandas vs Lakshmichand Panachand2

dealt with what constitutes wager. The adjudication of the court mentioned that to constitute a
wager, the transaction between the parties must wholly depend on the risk in contemplation,

1
294A. Keeping lottery office.—Whoever keeps any office or place for the purpose of drawing any lottery, not
being a State lottery, or a lottery authorised by the State Government, shall be punished with imprisonment of
either description for a term which may extend to six months, or with fine, or with both. And whoever publishes
any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any
person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in
any such lottery, shall be punished with fine which may extend to one thousand rupees.
2
(1885) ILR 9 Bom 358
and neither must look to anything but the payment of money on the determination of an
uncertainty.

In this case, the court took the issue of concealment of facts by one party to defraud another
party to make him enter into an agreement. Dealing with this context, the court observed that
if one of the parties has "the event in his own hands," the transaction lacks an essential
ingredient of a wager, and thus, since the concealment of facts was done by one party, which
has the effect of him having the event in his own hands, the agreement cannot be said to be
that of by the way of wager.

This judgement pushed the extent of the word “uncertainty” beyond general consideration.
While the contemplated event was undoubtedly uncertain, the entrance of party into contract
was in the hands of the first party which he did by the way of concealment of facts. This light
the view that the series of events, i.e. from agreeing upon the terms of contract to the future
unexpected event, is what has to be considered while investigating into the actual uncertainty
of the event, and not only the particular contemplation over which the stakes are.

Trying to push ahead a strict definition of wager, it was observed in Bhagvandas Parashram
v. Burjorji Ruttonji Bomanji3 that a true wager is where two persons agree to pay and
receive respectively money or money's worth, merely upon the happening or not happening
of an uncertain future event, and for no other consideration whatever. However, even after
defining a wager, the court got struck upon the same and inevitable point of absence of a
generalising principle and commented:

“No amount of generalization, no amount of definition, is really of any help. Criteria which
occur to certain most eminent and learned Judges as of general applicability and service,
because they preponderate in that particular case, may be quite useless in another case. And.
when all is said and done, the question on each fresh trial is invariably res integra, was this
defendant wagering? Did the plaintiff know he was wagering and accept the agreement on
that basis? Were both wagering? And so on.”

In Bhagvandas’ case4, the court mentioned the observance of public morals while deciding
what amounts to wager and what doesn’t.

“5. Passing from these comments upon definitions and criteria of wagers, to the attitude of the
Courts towards such defences and the appropriate methods to be followed really as a
consequence of that attitude, I think that it might be an improvement to shift the view point.
Most of the judgments, to which Courts are commonly referred for guidance in these points,
are strongly tinged with a moral sentiment. It can hardly be doubted, reading some of the
more impressive passages, that their authors felt themselves to be doing a little more than
coldly enunciating law; that they felt themselves to be carrying out a moral mission. (…)”

The duty of the Courts of law is to pull out a just and rationale cause out of the cases of cross-
allegations and claims while considering the correct legal principles, and not morals. The
judicial and enforcement machinery and institutions have been set up with law as root.

3
(1913) 15 BOMLR 85
4
Ibid.
Adjudicating disputes as per the voice of personal conscience and view of individualistic
morals would generate turbulence amidst the stable journey of law and order, for the
unreasonable ground of presence in grey of the fundamental characteristics to determine
wager.