26. Agreement in restraint of marriage void. Every agreement in restraint of the marriage of any person, other than a minor, is void.

The wide and unguarded language of this section is taken from the draft Civil Code of New York (S. 8.36). It seems probable that a contract limited to not marrying a certain person or any one of a certain definite class of persons would be held good. Apparently such agreements must be held void in India. The Allahabad High Court expressed doubt on the question whether partial or indirect restraint on marriage was within the scope of S. 26.


The Hindu law recognises polygamy, and as to Muhammadan law a man may have as many as four wives at a time subject to Family Laws restrictions. But neither law binds a man to marry more than one wife. It would seem, therefore, that a provision in a Kabinnamah by which a Muhammadan husband authorises his wife to divorce herself from him in the event of his marrying a second wife is not void, and if the wife divorces herself from the husband on his marrying a second wife, the divorce is valid, and she is entitled to maintenance from him for the period of iddat.

In an Oudh case a distinction was drawn between restraint on marriage generally and a restraint on remarriage; and a condition in a wakf that if the widow of a co-sharer remarried she should forfeit her right to the profits under the wakf was accordingly upheld.

27. Agreement in restraint of trade void. Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception 1. Saving of agreement not to carry on business of which good-will is sold.--- One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein; Provided that such limits appear to the Court reasonable, regard being had to the nature of the business.

Agreements in restraint of trade.---This section, like the last, unfortunately follows the New York draft Code, which has been the evil genius of this Act. The first paragraph is taken almost word for word from S. 833 of the production. The original draft of the Indian Law Commission did not contain any specific provision on the subject.

The extension of modern commerce and means of communication has displaced the old doctrine that the operation of agreement of this kind must be confined within a definite neighbourhood. But the Anglo-Indian law has stereotyped that doctrine in a narrower form than even the old authorities would justify. The exception is also taken with slight variations from the New York draft Code.

The section is general in its terms, and declares all agreements in restraint of trade void pro tanto, except in the case specified in the exception. The object appears to have been to protect trade. It has been said that "trade in India is in its infancy; and the Legislature may have wished to make the smallest number of exceptions to the rule against contracts whereby trade may be restrained. The reason, however, cannot have been supposed applicable in New York; and it seems more likely that the New York clause was simply copied without reflection by the draftsman of the Indian Legislative Department.

To escape the prohibition, it is not enough to show that the restraint created by an agreement is partial, and not general; it must be distinctly brought within one of the exceptions. The words 'restraint from exercising a lawful profession, trade or business' do not mean an absolute restriction, and are intended to apply to a partial restriction, a restriction limited to some particular place, otherwise the first exception would have been unnecessary. Moreover, "in the following section (S. 28) the legislative authority when it intends to speak of an absolute restraint, and not a partial one, has introduced the word 'absolutely'.... The use of this word in S. 28 supports the view that in S. 27 it was intended to prevent not merely a total restraint from carrying on trade or business, but a partial one. We have nothing to do with policy of such a law. All we have to do is to take the words of the Contract Act, and put upon them the meaning which they appear plainly to bear."

Restraint during term of service.---An agreement of service by which an employee binds himself, during the term of his agreement, not to compete with his employer directly or indirectly is not in restraint of trade. If it were otherwise, "all agreements for personal service for a fixed period would be void. An agreement to serve exclusively for a week, a day, or even for an hour, necessarily prevents the person so agreeing to serve from exercising his calling during that period for any one else than file person with whom he so agrees. It can hardly be contended that such an agreement is void. In truth, a mall who agrees to exercise his calling for a particular wage and for a certain period agrees to exercise his calling and such an agreement does not restrain him from doing so. To hold otherwise would, I think, be a contradiction in terms." Such an agreement may be enforced by injunction where it contains a negative clause, express of implied, providing that the employee should not carry on business on his own account during the term of his engagement. An employee contracted to serve as a weaving master for three years, and agreed not to serve anyone else in India during the period. He left the service after one year, and joined another mill as a weaving master. In terms the prohibition in the agreement was not restricted to serving anyone else as weaving master, but was absolute. The Court, however, in the light of the intention of the parties, construed the prohibition as confined to the profession of weaving master, held the agreement reasonable, and issued an injunction against the employee.

Public policy.---In two cases it was suggested that, even if the section did not apply to cases of partial restraint, they might come under Ss. 23, 24 of the Act. In Haribhai case Candy J. said: "I would not extend the meaning of S. 27 beyond what the words primarily mean: There may be contracts which do not come within the terms of that section and its exceptions, and yet may be contracts 'in partial restraint of trade,' and as such contrary to public policy and so void (Ss. 23, 24 Contract Act). That is the common law doctrine by which restraints of trade, even though partial, are presumed to be bad, the presumption being rebuttable. It is for the Court to determine whether the contract be a fair and reasonable one or not, and the test appears to be whether it be prejudicial or not to the public interest,

for it is on grounds of public policy alone that these contracts are supported or avoided." And in Nur Ali case the Court said: "It is not necessary to consider the effect of S. 24 of the Contract Act upon the case, whether, even had the stipulation in partial restraint of trade not been illegal, the defendant's agreement would not nevertheless have been void, part of the consideration for it having been the undertaking by the plaintiff absolutely to refrain from carrying on the business of dubash. Probably that would be the proper construction of the contract."

It has been observed that an agreement which confers an exclusive right on a priest to perform the religious ceremonies of a village would be void, but an agreement which restricts the right to a certain caste would be valid.

These suggestions, however, do not seem sound. The present section is very strong; it invalidates many agreements which are allowed by the Common Law; and it does not seem open to the Courts to hold that any agreement in pari materia, not coming within the terms of the section, is void on some unspecified grounds of public policy. "So far as restraint of trade is an infringement of public policy, its limits are defined by section 27."

Agreements not in restraint of trade.---This section aims at "contracts by which a person precludes himself altogether either for a limited time or over a limited area from exercising his profession, trade, or business, nor contracts by which in the exercise of his profession, trade, or business, he enters into ordinary agreements with persons dealing with him which are really necessary for the carrying on of his business." In one sense every agreement for sale of goods whether in esse or in posse is a contract in restraint of trade, for if A, B agrees to sell goods to C, D he precludes himself from selling to anybody else. But a reasonable construction must be put upon the section, and not one which would render void the most common form of mercantile contracts. Thus a stipulation in an agreement whereby the plaintiffs agreed that they would not sell to others for a certain period any goods of the same description they were selling to the defendant is not in restraint of trade. Similarly an agreement to sell all the salt manufactured by the defendant during a certain period to the plaintiff at a certain price is not in restraint of trade. It is otherwise if the agreement, while binding the manufacturers not to sell their goods to any other person than the other contracting party, does not bind the other party to buy all the produce or any definite quantity. In such a case the agreement is bad as being in restraint of trade. Where twenty-nine out of thirty manufacturers of combs in the city of Patna agreed with R, S to supply him with combs and not to sell combs to any one else, with an option to R, S not to accept the goods manufactured if he found there was no market for them in Patna, Calcutta, or elsewhere, the agreement was held void. And where A agreed to purchase certain goods from B at a certain rate for the Cuttack market, and the contract contained a stipulation that, if the goods were taken to Madras, a higher rate should be paid for them, it was held that the stipulation for the higher rate was not in restraint of trade. Where the owners of two neighbouring villages, which were let out for holding a cattle market on Tuesdays and Saturdays on payment of market fees, entered into an agreement, to prevent competition and consequent loss to them, that each should let out his village for holding the market on certain specified days, it was held that the agreement was not in restraint of "any profession, trade or business" within the meaning of this section, and it was not therefore void. The Court said: "It seems to us that a landlord who, in return for market tolls or fees, allows a cattle market to be conducted on his land is not thereby exercising the trade or business of selling cattle."

Trade combinations.---An agreement between manufacturers not to sell their goods below a stated price, to pay profits into a common fund and to divide the profits in certain proportions, is not avoided by this section, and cannot be impeached as opposed to public policy under S. 23.

In a later case in the Allahabad High Court it was held that a combination among traders in a particular place to do business only among their members, paying part of their profits to a common fund and levying fines upon their members for breach of conditions laid down by the combination did not offend against S. 27 and was not actionable merely because. it brought profit to the combination and indirectly damaged their trade rivals. "It is perfectly clear that the defendants did not unlawfully or by illegal means procure any breaches of contract in favour of the plaintiffs. There was no conspiracy on the part of the defendants to compel the plaintiffs vendors not to supply goods to the plaintiffs. A certain amount of pressure was brought to bear upon their constituents, the object of which was that if the latter wished to continue to be members of the association they had to obey the edicts of the association and the cease to deal with outsiders. These persons had a choice of action. They were not the victims of any coercion on the part of the defendants. Where a person has a choice of one or other of two courses with their attended advantages or disadvantages, coercion is not necessarily one of the elements involved in the transaction. There was no organized conspiracy on the part of the defendants to do harm to the plaintiffs. The association of the defendants was formed with the primary object of keeping the trade in their own hands and not .with the intention of ruining the trade of the plaintiffs. The association therefore was not unlawful and there was no cause of action for a claim founded upon conspiracy. The plaintiffs are, therefore, not entitled to the relief claimed." An agreement in the nature of a trade combination for mutual benefit for the purpose of avoiding competition is not necessarily unlawful, even if it may damage others.

The present section certainly does not reproduce the Common Law, as we have seen. It seems, therefore, that it should be construed according to its literal terms. When so construed, we submit that the proper inference to draw from the authorities is that it only strikes at agreements which operate as a total bar to the exercise of a lawful business, for however short a period or however limited the area, and does not avoid agreements which merely restrain freedom of action in detail in-the actual exercise of a lawful business. A stipulation not to sell for less than a fixed rate is an agreement of this character. It does not restrain any party to the contract from selling; in other words, none of the parties is restrained from exercising his business of selling, but only that in the exercise of the business certain terms shall be observed.

"To that extent."---The meaning of these words is that if the agreement can be broken tip into parts, it will be valid in respect of those parts which are not vitiated as being in restraint of trade. In English cases, there has been a variety of opinions as to the basis upon which severance can be allowed. It is reasonably clear that the test for cases where the covenant has been entered into by the seller of a business is the "blue pencil" test, a formal test of verbal divisibility. If by eliminating objectionable phrases, though without adding or altering any words, there remains a covenant which is reasonable, this will be enforced.

Lex loci contractus.---The Courts of this country will not enforce a .contract made abroad, to be performed in this country, contrary to the policy of the law of this country. An agreement, therefore, in restraint of trade, made abroad and to be performed in India, is void in India, though it may be valid by the lex loci contractus.

Exception l.---This exception deals with a class of cases which had a leading part in causing the old rule against agreements in restraint of trade to be relaxed in England. The rule arose apparently from a popular dislike of all combinations tending to raise prices, which may be compared with the agitation in America against the modern system of "trusts". It has been laid down in quite modern cases, as the governing principle, that "no power short of the general law," not even the party's own bargain, should be allowed to restrain a man's discretion as to the manner in which he shall carry on his business, and originally the rule was without exceptions. "In time, however, it was found that a rule so rigid and far-reaching must seriously interfere with transactions of everday occurance"; and from the early part of the sixteenth century onwards restrictions "for a time certain and in a place certain," to prevent the seller of a business from competing with the buyer, were allowed.

The law of India, however, is tied down by the language of this section to the principle of a hard and fast rule qualified by strictly limited exceptions; and, however mischievous the economical consequences may be, the Courts here can only administer the Act as they find it.

Earnest money---When may be recovered by purchaser. If the respondent who was the seller is held guilty of breach of contract, obviously, the appellant who was the buyer would be entitled to recover the money paid to the seller as purchase price, on account of the failure of consideration. Thus, the buyer has a quasi-contractual right of claim the recovery of the price, which is paid to the seller, for the seller, in breach of his obligation, failed to pass good title to the good sold. The buyer in such case has a right to sue in restitution to recover the price on the ground of total failure of consideration. Similarly, if the seller failed to deliver the goods the buyer may recover the deposit he paid to the seller. But in that case the buyer must terminate the contract. On the other hand, even if the buyer was in default he can in certain circumstances, claim restitution of the advance payment made to the seller, even if the seller justifiably terminates the contract.

Scope---All agreements in restraint of trade are illegal---Departure from Common Law on tile point stated. Section 27, prohibits all agreements in restraint of trade, and it is intended to invalidate many agreements that are valid under the Common Law.

28. Agreements in restraint of legal proceedings void. Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by tile usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent.

Exception I. Saving of contract to refer to arbitration dispute that may arise.--- This section shall not render illegal a contract by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.

Suits barred by such contracts. When such a contract has been made, a suit may be brought for its specific performance, and if a suit, other than for such specific performance, or for the recovery of the amount so awarded, is brought by one party to such contract against any other such party in respect of any subject which they have so agreed to refer, the existence of such contract shall be a bar to the suit.

[Repealed by Specific Relief Act, S. 2 and Sch. except in scheduled districts where that Act is not in force; for these districts]

Exception 2. Saving of contract to refer questions that have already arisen.---Nor shall this section render illegal any contract in writing by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration.

Agreement in restraint of legal proceedings.---"This section applies to agreements which wholly or partially prohibit the parties from having recourse to a court of law. If, for instance, a contract were to contain a stipulation that no action should be brought upon it, that stipulation would, under the first part of S. 28, be void, because it would restrict both parties from enforcing their rights under the contract in the ordinary legal tribunals, and so if a contract were to contain a double stipulation that any dispute between the parties should be settled by arbitration, and that neither party should enforce his rights under it in a court of law; that would be a valid stipulation so far as regards its first branch, viz., that all disputes between the parties should be referred to arbitration, because that of itself would not have the effect of ousting the jurisdiction of the Courts, but the latter branch of the stipulation would be void because by that the jurisdiction of the Court would be necessarily excluded."

Nor does a contract whereby it is provided that all disputes arising between the parties "should be referred to the arbitration of the Bengal Chamber of Commerce, whose decision shall be accepted as final and binding on both parties to the contract"; still less is it wrong for the parties to a pending suit to give the Court itself, if they choose so to agree, full power to decide the whole matter without further appeal. But a stipulation that parties to a reference shall not object at all to the validity of the award on any ground whatsoever before any Court of law does restrict a party absolutely from enforcing his rights in ordinary tribunals, and, as such, is void. The Courts have power, in spite of such a stipulation, to set aside an award on the ground of misconduct on the part of the arbitrator. For though, in that case, the provisions of that Code would not apply, the award may be set aside in a regular suit on the ground. A party to an arbitration agreement has now the right to have an award set aside on that ground of misconduct on the part of the arbitrator, and a stipulation whereby he binds himself to accept the award as final in all cases has the effect of restricting him absolutely from enforcing his right and is, therefore, void under the provisions of this section.

An agreement by a joint decree holder not to intervene in execution under Order XXI, rule 15, of the Civil Procedure Code, is invalid. The section does not affect the validity of compromise of doubtful rights, and this view is supported by the provisions of the Civil Procedure Code, which enable parties to a suit to go before the Court and obtain a decree in terms of a compromise. But an agreement between the parties to a suit on a contract that the suit should be decided in accordance with the result of another suit between the same parties is void under this section, as it restricts the parties absolutely from enforcing their rights by the "usual legal proceedings". It is competent, however, to parties to a suit under the provisions of the Indian Oaths Act, 1873, to enter into an agreement making the oath of one of them conclusive evidence of all or any of the facts in issue between them. If the oath is mad,: and evidence is given on such oath, it is, under S. 11 of that Act, conclusive as to the matter stated. But if a party, after entering into such agreement as aforesaid, refuses to make the oath, all that the Court has to do is to record under S. 12 the refusal together with the reasons if any and the trial should proceed. It is to this extent only that agreements of this character are recognised under the Indian Oaths Act. An agreement, therefore, between A and B that if A. made certain statements on the special oath, B would be bound by those statements, and that if A refused to take the oath, the suit instituted by A. against B, should be dismissed, is void, as the Oaths Act does not empower a Court to dismiss a suit for such refusal.

"Rights under or in respect of any contract."---Note that this section applies only to cases where a party is restricted from enforcing his rights under or in respect of any contract. It therefore presumably does not apply if the Court hold that the parties did not intend that their agreement should give rise to any legal relations. It does not apply to cases of wrongs or torts. Nor does it apply to decrees. The expression "contract" does not include rights under a decree. The Code of Civil Procedure contains express provisions as to adjustment of a decree and postponement of rights under a decree by mutual agreement of parties of a suit.

Limitation of time to enforce rights under a contract.---Under the provisions of this section, an agreement which provides that a suit should be brought for the breach of any terms of the agreements within a time shorter than the period of limitation prescribed by law is void to that extent. The effect of such an agreement is absolutely to restrict the parties from enforcing their rights after the expiration of the stipulated period, though it may be within the period of limitation. Agreements of this kind must be distinguished from those which do not limit the time within which a party may enforce his rights, but which provide for a release or forfeiture to rights if no suit is brought within the period stipulated in the agreement. The latter class of agreements are outside the scope of the present section, and they are binding between the parties. Thus a clause in a policy of fire insurance which provides that "if the claim is made and rejected, and an action or suit be not commenced within three months after such rejection all benefits under this policy shall be forfeited," is valid, as such a clause operates as a release or forfeiture of the rights of the assured if the condition be not complied with, and a suit cannot be maintained on such a policy after the expiration of three months from the date of rejection of the plaintiff's claim. It was so held by the High Court of Bombay; and similarly where a bill of lading provided that" in any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless a suit is brought within one year after the delivery of the goods," it was held that the clause was valid. But this cannot be said of a clause in a policy in the following form: "No suit shall be brought against the company in connection with the said policy later than one year after the time when the cause of action accrues." Such a clause does not operate as a release or forfeiture of the rights of the assured on non-fulfillment of the condition, but it is to limit the time within which the assured may enforce his rights under the policy, and it is therefore void under the present section. The contrary, however, was held by the High Court of Bombay, the ground of the decision being that the clause amounted in effect to an agreement between the parties that if no suit were brought within a year, then neither party should be regarded as having any rights against the other.

In a Calcutta case one of the conditions of a policy of marine insurance was that no suit by the assured should be sustainable in any Court, unless the suit was commenced within six months next after the loss, and that if any suit was commenced after the expiration of six months, the lapse of time should be taken as conclusive evidence against the validity of the claim. It was held that the assured could not sue on the policy after the expiration of six months. No reference was made either in the argument of counsel or in the judgment to the present section. An agreement providing that a person in whose favour a provision for maintenance was made is not entitled to sue for maintenance which had been in arrears for more than one year is void. In short, an agreement providing for the relinquishment of rights and remedies is valid, but an agreement for the relinquishment of remedies only falls within the mischief of S. 28.

No provision is made in the section for agreements extending the period of limitation for enforcing rights arising under it. There is hardly any doubt that an agreement which provides for a longer period of limitation than the law allows does not lie within the scope of this section. Such an agreement certainly does not fall within the first branch of the section. There is no restriction imposed upon the right to sue; on the contrary, it seeks to keep the right of sue subsisting even after the period to limitation. Nor is this an agreement limiting the time of enforce legal rights. It would, however, be void under S. 23 as tending to defeat the provisions of the Limitation Act, 1908.

Ordinary tribunals.---A clause in a bill of lading whereby it was agreed that questions arising on the bill should be heard by the High Court of Calcutta instead of the Court at Mirzapur, which was the proper tribunal to try the questions, is void, and cannot be pleaded in bar of a suit brought in the Mirzapur Court. Where, however, two Courts have jurisdiction to try a case, there is nothing contrary to law in an agreement between parties that disputes between them should be tried at the one Court rather than the other. Nor is it any objection to an arbitration agreement that it contains a stipulation that any arbitration proceedings under the agreement shall take place in a specified country or city.

Exception l.---This exception "applies only to a class of contracts, where the parties have agreed that no action shall be brought until some question of amount has first been decided by a reference, as for instance, the amount of damage which the assured has sustained in a marine or fire policy. Such an agreement does not exclude the jurisdiction of the Courts; it only stays the plaintiff's hand till some particular amount of money has been first ascertained by reference". It is not essential for the purpose of excluding the jurisdiction of the Court that the contract should in terms provide that the award of the selected tribunal shall be a condition preedent to legal proceedings.

An agreement between a tramway company and a conductor, that the manager of the company shall be the sole judge as to the right of the company to retain the whole or any part of the deposit to be made by the conductor as security for the discharge of his duties, and that his certificate in respect of the amount to be retained shall be conclusive evidence between the parties in Courts of justice, comes within this exception. Such an agreement does not oust the jurisdiction of the Courts. Its effect is merely to constitute the manager the sole arbitrator between the company and the conductor, as to wheter, in the event of the conductor's misconduct, the company is entitled to retain the whole or any part of the deposit.

This class of cases must be distinguished from those where the obligation of the promisor, such as the duty of paying for work to be done or goods to be supplied, is made, by the terms of the contract, to depend on the consent or approval of some person, as in a builder's contract, the certificate of the architect that the work has been properly done. Here there is no question of referring to arbitration, or anything like arbitration, a dispute subsequent to the contract, but the contract, itself is conditional, or, in the language of the Act, contingent.

Exception 1 Second, Clause.---This clause was repealed by the Specific Relief Act S. 21 of the Act provides that, "save as provided by the Arbitration Act, 1940, no contract to refer present or future differences to arbitration shall be specifically enforced ; but if any person who has made such a contract other than an arbitration agreement to which the provisions of the said Act apply and has refused to perform it sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit." If a suit is brought in respect of any such subject, it must be shown by the defendant, before he could rely upon the section as a bar to the suit, that the agreement is still operative, and that the plaintiff has refused to perform it. The mere act of filing the plaint is not such a refusal.

Remedies for breach of agreement to refer.---There are two remedies open to a party to a reference for breach of the agreement. He may sue for damages for the breach, or he may plead the agreement in bar of any suit that may be brought against him in violation of the terms of the agreement, as provided by the Specific Relief Act, S. 21. But the provisions of that Act have no operation wherever the Arbitration Act, 1940, applies, and by far the greater number of arbitrations take place under the convenient machinery of the latter.

Conventional restrictions of evidence.---An agreement purporting to prevent the ordinary evidence of payment between the parties from being received has been disregarded as being an unwarrantable interference with the jurisdiction of the Court. Where a bond contained a stipulation enabling the obligee to treat as a nullity payments not endorsed in writing on the bond, it was held that the stipulation was against good conscience, and did not preclude the obligor from proving payments alleged to have been made by him by oral evidence. Such a stipulation "cannot be permitted to control Courts of justice as to the evidence which, keeping within the rules of the general law of evidence in this country, they may admit of payments. There is nothing in that law which would warrant our Courts in excluding direct oral evidence of payment."

Exclusive jurisdiction given to foreign Court by contract---Pakistan Courts may still entertain suit relating to dispute.

Exclusive jurisdiction clauses in Bill of Lading---Suit in Pakistan cannot be stayed merely because of such clause---Party seeking stay must show justification for it.

Arbitration Act (X of 1940), S. 34---Law Reforms Ordinance (II of 1940), S. 3---High Court Appeal---Application for stay of proceedings in suit for recovery for breach of contract and recourse to arbitration as per arbitration clause in contract---Petitioner-applicant contending that in commercial contracts effect must be given to obvious intention in agreement of parties---Contention not accepted ---Held, such a clause was given effect to as an arbitration clause which fell within Exceptions to S. 28, Contract Act, 1872.

Jurisdiction of Court---Parties agreeing to sue in Courts of one country and not in those of another---Agreement valid. In agreeing to bring a suit in one out of the two Courts belonging to two foreign countries, both of which would be competent to try the suit, the parties cannot be said to have contracted out of the jurisdiction vested in the Court or to be depriving that Court of its jurisdiction, which it otherwise possessed. Therefore, if two parties, one being a national of Pakistan and another of Denmark agreed by their contract to have their disputes settled under the contract by a Court in Denmark according to Danish Law, it cannot be said that they have contravened the provisions of section 28 of the Contract Act.

An agreement between parties to a contract to the effect that a suit concerning disputes arising between them on the basis of that contract should be instituted in one only out of two competent Courts having territorial jurisdiction over the subject matter of that suit is valid and enforceable and is not void under S. 28.

Section 28 prevents parties from divesting Courts of their inherent jurisdiction and makes void only those agreements which absolutely restrict a party to a contract from enforcing the rights under that contract in ordinary tribunals. But it has no application when a party agrees not to restrict his right of enforcing his rights in the ordinary tribunals but only agrees to limitation of the choice of forum which the law has conferred upon him and to a selection of one of those ordinary tribunals in which ordinarily a suit would be tried.

It is well settled that mutual consent cannot confer jurisdiction upon any Court which it might not possess under the general law, nor individuals by agreement amongst themselves can divest any Court of its jurisdiction which it might possess under the general law. Section 28 of the Contract Act makes void only the contract which absolutely restricts a party from enforcing his right under the contract in an ordinary Tribunal but it is not attracted to a party who agrees, not to restrict his right in the ordinary Tribunal but only consents to the selection of a Court in which the suit is to be decided.

Section 28 of the Contract Act makes void only that agreement which absolutely restricts a party to a contract from enforcing his right under the contract in ordinary tribunals but has no application when a party agrees not to restrict his right in the ordinary tribunal but only agrees to the selection of a particular tribunal in which the suit is to be tried.

Jurisdiction---Clause in contract by which disputes are to be referred to foreign tribunals-..lf bars jurisdiction of local court. There was a clause in a contract by which a dispute between the parties was to be referred to Bombay Chamber of Commerce for arbitration at the option of one of the parties. The question before the court was if such a clause ousts the jurisdiction of the local courts, and as such a suit before a local Court could be stayed for reference to arbitration to the foreign tribunal.

Held: The correct rule in such cases seems to be that a clause of this character in a contract providing for determination of all disputes arising between the parties to the contract, by a foreign tribunal, must be construed as a submission clause for arbitration purposes. It does not really oust the jurisdiction of the local courts.

The jurisdiction of the local Courts is by no means ousted and it is only a question for consideration whether a suit brought before a local tribunal should be stayed or not, in the face of such an arbitration clause which would dearly fall within section 34 of the Arbitration Act. Under this section it is not incumbent to stay proceedings but the Court has a discretion in the matter.

S. 28 and Limitation Act (IX of 1908)---Relevant clause of Insurance of Policy not providing that no suit can be filed for any loss or damage after expiration of 12 months but providing that in no case whatever shall company be liable for any loss or damage after expiration of 12 months from happening of loss or damage unless claim be subject of pending action or arbitration---Clause, held, does not contravene S. 28 of Contract Act, 1872.

S. 28 and Limitation Act (IX of 1908), Art. 148---Redemption of mortgage---Limitation---Provisions of S. 28, Contract Act and Art. 148 of Limitation Act, cannot be interpreted to mean that a property cannot be mortgaged for more than 60 years Right to redeem mortgage for a certain fixed period---Accrues after expiry of such period unless any contrary stipulation exists in mortgage deed.

Agreement ousting the jurisdiction of two Courts---Effect. Where a clause in a contract stated that any legal action arising out of the contract would be taken at C, Court, though normally Court at C and D, would both have jurisdiction, the effect of the agreement is to prevent the parties absolutely from filing a suit in the Court at D and as such it falls trader S. 28. Even if the agreement is not void, it is putting the matter rather too high to say that it has taken away the jurisdiction from the Court at D. The fact that a party willingly made the agreement may, however, afford a ground for transfer.

Contract providing that only a foreign court shall have jurisdiction in case of dispute---Jurisdiction of Pakistan Courts is not ousted---Such jurisdiction clause may be treated as arbitration clause. Where a contract provides that in case of a dispute only certain foreign Courts would have jurisdiction to decide the matter and jurisdiction of the Pakistan Courts is ousted by it. Held: The language of section 28 is clear by itself, and can only, mean that a contract which absolutely restricts any party to it from enforcing his rights under or in respect of such a contract by the "usual legal proceedings" in the "ordinary tribunals" of the country, will, to that extent, be void unless protected by the exceptions to section 28. However, in order to preserve the sanctity of contracts it ought also to be held, as was done in the earlier cases in Great Britain that foreign jurisdiction clauses, even when they purport to give jurisdiction to a Court in a foreign country, are realy in the nature of arbitration clauses which come within the, exceptions to section 28 and, therefore, should be dealt with in the same manner as other arbitration clauses. In the case of an arbitration it has to be, remembered that the jurisdiction of the Courts is not altogether ousted, for, the Courts merely stay their hands to allow the parties to resort to the form of adjudication to which they have previously agreed. By only staying the actions before them the Courts still retain to themselves the jurisdiction to resume the case if the arbitration, for any reason, fails or the parties find it impossible to comply with the form of adjudication to which they had agreed.

Foreign jurisdiction clause in contract---Onus of proof as to stay of proceedings. The party who seeks to invoke the foreign jurisdiction clause, should ordinarily satisfy the Court that it is just and equitable to bind the parties to their bargain.

29. Agreements void for uncertainty. Agreements, the meaning of which is not certain, or capable of being made certain, are void.

(a) A agrees to sell to B "a hundred tons of oil." There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty.

(b) A agrees to sell to B one hundred tons of oil of a specified description, known as an article of commerce. There is no uncertainty here to make the agreement void.

(c) A, who is a dealer in coconut-oil only, agrees to sell to B "one hundred tons of oil." The nature of A's trade affords an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred tons of coconut-oil.

(d) A agrees to sell to B "all the grain at Rahimyar Khan. "There is no uncertainty here to make the agreement void.

(e) A agrees to sell to B "one thousand maunds of rice at a price to be fixed by C." As the price is capable of being made certain, there is no uncertainty here to make the agreement void.

(f) A agrees to sell to B "my white horse for rupees five hundred or rupees one thousand." There is nothing to show which of the two prices was to be given. The agreement is void.

Ambiguous contracts.---The text and (with one addition) the illustrations of this section follow the draft of the Indian Law Commissioners with only formal variation. The Illustrations are plain, and sufficient to explain the meaning of the section.

S. 93 of the Evidence Act provides that when the language of a document is ambiguous or defective no evidence can be given to explain or amend the document. Sec also Ss. 94-97 of the same Act. Neither will the Court undertake to supply defects or remove ambiguities according to its own notions of what is reasonable; for this would be not to enforce a contract made by the parties, but to make a new contract for them. The only apparent exception to this principle is that when goods are sold without naming a price, the bargain is understood to be for a reasonable price. This was probably introduced in England on the assumption that there was an ascertainable market price, and then extended to all cases.

Where the defendants, describing themselves as residents of a certain place, executed a bond and hypothecated as security for the amount "our property, with all the rights and interest", it was held that the hypothecation was too indefinite to be acted upon. The mere fact that the defendants describe themselves in the bond as residents of a certain place is not enough to indicate their property in that place as the property hypothecated. If they had described themselves as the owners of certain property it would then have been reasonable to refer the indefinite expression to the description. And where the defendant passed a document to the Agra Savings Bank whereby he promised to pay to the manager of the bank the sum of Rs. 10 on or before a certain date "and a similar sum monthly every succeeding month," it was held that the instrument could not be regarded as a promissory note, as it was impossible from its language to say for what period it was to subsist and what amount was to be paid under it.

Similarly, where in an agreement for the sale of goods, the seller reserves the right to vary the price at will, there is no contract. A compromise stating: "The following five gentlemen shall decide all matters relating to our movable and immovable property" was held to be too ambiguous to be enforced. An agreement to grant a lease when no date of commencement is expressly or impliedly fixed cannot be enforced. But when the commencement of a lease is dependent upon a contingency, which has occurred, the agreement can be enforced. An agreement to pay a certain amount after deductions as would be agreed upon between the parties is void for uncertainty. It has also been held that an agreement to refer an arbitration to a person, who has been described in uncertain terms is void. But where the proprietor of an indigo factory mortgaged to B all the indigo cakes that might be manufactured by the factory from crops to be grown on lands of the factory from the date of the mortgage up to the date of payment of tile mortgage debt, it was held that the terms of the mortgage were not vague, and that the mortgage was not void in law. It has been suggested that an agreement is too uncertain to be enforced if no limit to the time of performance is expressed or can be inferred from the nature of the case. This does not appear acceptable as a general proposition.

Void agreement, connotation of---Agreements meaning whereof is not certain or capable of being made certain, held, would be void---Where both contracting parties are at consensus ad idem with regard to essential terms of contract, any uncertainty or vagueness which is incapable of being ascertained, would have effect of vitiating contract---In letter of guarantee there was no vagueness or uncertainty, which could vitiate contract.

Lease---Agreement that rent will be fixed by Chief Officer of Corporation and will be paid from date of possession---Not valid. The terms of the allotment of a shop by the Karachi Municipal Corporation provided that the lease would commence from the date from which possession will be handed over to the respondent.

Held; the agreement was not void under section 29 of the Contract Act, because the terms of the agreement it was agreed between the parties that the respondent will pay such rent as will be fixed by the Chief Officer and the lease will commence on delivery of possession of the shop. These two terms were quite plain and simple.

Applicability---Agreement is void only when it is uncertain and unascertainable---Agreement capable of being ascertained---Not void. Under section 29 of the Contract Act, it is only when the meaning of an agreement is not certain or capable of being made certain that the agreement becomes void.

When, therefore, the sellers told the buyers that each shipment shall be treated as if separate contracts were made for it and they shall be bound to accept it even if this shipment was only in respect of a part of the goods and the buyers agreed to this condition, the agreement is not void as it is capable of being ascertained.

Vague contract---When not enforceable. Section 29 is based upon the principle that the contracting parties must be shown to be at ad idem with reference to the essential terms of the contract and, therefore, if there is any vagueness or uncertainty incapable of being made certain the contract fails for vagueness. For, in that case the parties cannot be said to agree to the same thing in the same sense. Therefore merely because the terms of the arbitration agreement are capable of different and various interpretations it cannot ipso facto be liable to be struck down as void. It can only be regarded as void for uncertainty if its meaning is not certain or capable of being made certain as provided by section 29.

Terms of contract not ascertainable---Contract void and enforceable. Held: The document being incomplete, as its terms are not ascertainable with reasonable certainty, it comes within the mischief of section 29 and is void and by virtue of the provisions of S. 21 (a) of the Specific Relief Act cannot be enforced specifically.

30. Agreement 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 awarded to the winner or winners of any horse-race.

Section 294-A of the Pakistan Penal Code not affected. Nothing in this section shall be deemed to legalise any transaction connected with horse racing, to which the provisions of section 294-A of the Pakistan Penal Code apply.

Wagering contract.---This section represents the whole law of wagering entracts now in force.---There is no technical objection to the validity of a wagering contract. It is an agreement by mutual promises, each of them conditional on the happening or not happening of an unknown event. So far as that goes, promises of this form will support each other as well as any other reciprocal promises. It would have been better if the Courts in England had refused, on broad grounds of public policy, to admit actions on wagers; but this did not occur to the Judges until such actions had become common; and, until a remedy was provided by statute, they could only find reasons of special public policy in special cases, which they did with almost ludicrous ingenuity.

What is a wager?---A wager has been defined as a contract by A to pay money to B, on the happening of a given event, in consideration of B paying [this should be "promising to pay"] to him money on the event not happening. But Sir William Anson's definition, "a promise to give money or money's worth upon the determination or ascertainment of an uncertain event," is neater and more accurate. To constitute a wager "the parties must contemplate the determination of the uncertain event as the sole condition of their contract. One may thus distinguish a genuine wager from a conditional promise or a guarantee": Anson, Law of Contract, 17th ed. 221,222 (i). "But if one of the parties has the event in his own hands, the transaction lacks an essential ingredient of a wager". "It is of the essence of a wager that each side should stand to win or lose according to the uncertain or unascertained event in reference to which the chance or risk is taken."

In a case of life insurance, Fulton J. said: "What is the meaning of the phrase 'agreements by way of wager' in S. 30 of the Contract Act? ...... Can it be that the words mean something different in India from what the corresponding words 'agreement by way of wagering' mean in England? I do not see how such an argument can be maintained, or how the fact that 14 Geo. III. C. 48 is not in force in India affects the question.

A certain class of agreements such as bets, by common consent, come within the expression 'agreements by way of wagers'. Others, such as legitimate forms of life insurance, do not, though, looked at from one point of view, they appear to come within the definition of wagers. The distinction is doubtless rather subtle, and probably lies more in the intention of the parties than in the form of the contract.

There is no wager unless both parties run the risk of loss and both parties have a chance of gain. Where two wrestlers therefore agreed to a contest with a stipulation that the wrestler who failed to appear should forfeit Rs. 500 and that the winner, if the contest took place, should receive a fixed sum out of the gate-money, in a suit to recover the Rs. 500 the defence of gaming and wagering failed.

"By way of wager"---There is no distinction between the expression "gaming and wagering," and the expression "by way of wager," used in this section. The cases therefore bearing on the expression used are still useful in construing the expression "by way of wager," used in the present section.

Wagering contracts may assume a variety of forms, and a type with which the Courts have, constantly dealt is that which provides for the payment of differences in stock transactions, with or without colourable provisions for the completion of purchases. Such provisions, if inserted, will not prevent the Court from examining the real nature of the agreement as a whole. "In order to constitute a wagering contract neither party should intend to perform the contract itself, but only to pay the differences". It is not sufficient if the intention to gamble exists on the part of only one of the contracting parties. Contracts are not wagering contracts unless it be the intention of both contracting parties at the time of entering into the contracts under no circumstances to call for or give delivery from or to each other. It is not necessary that such intention should be expressed. If the circumstances are such as to warrant the legal inference that they never intended any actual transfer of goods at all, but only to pay or receive money between one another according as the market price of the goods should vary from the contract price at the given time, that is not a commercial transaction, but a wager on the rise or fall of the market.

On the other hand, the modus operandi may be such as to raise a presumption against the existence of a common intention to wager. This infrequently happens when agreements of a speculative character are entered into through the medium of brokers, and when, according to the practice of the market, the principals are not brought into contact with each other, nor do they know the name of the person with whom they are contracting, until after the bought and sold notes are executed. Under circumstances such as these, when a party launches his contract orders he does not know with whom the contracts would be made. And this presumption is considerably strengthened when the broker is authorised by the principal to contract with third persons in his (the broker's) own name; for the third person may in such case remain undisclosed even after the contract is made. But the presumption may be rebutted by evidence of a common intention to wager, though the contract has been brought about by a broker.

The presumption against a wager was applied in a case where the transactions were in Government paper to the extent of about half a crore of rupees, and the plaintiff was both stockbroker and stockjobber, and the defendant was a stockjobber. The magnitude of the transactions in the case was set up by the defendant to support the contention that the transactions were by way of wager, and reliance was placed on the Privy Council decision. But the contention was overruled and the Court said: "In the Privy Council case the defendant was a rice miller or a producer by trade, and. the wager related to quantities of rice enormously out of proportion to his output and capital, deliverable at option from a number of specified mills. Here there is, I think, sufficient proof that the defendant was known in the market as the largest of jobbers, and the capital available for the purchases which he bargained for was at least presumably to be supplied by the constituents for whom a jobber is ordinarily supposed to be acting."

Teji mandi transaction.---Teji mandi contracts were thus described; "It would appear that what happens in a contract of this nature is that one party pays a premium to the other party thus acquiring an option to buy and sell, as he decides, a certain quantity of gold at a certain rate on a certain date. Either on, or some date prior to, that date the put. chaser decides whether he will buy or sell. According to his decision, communicated to his broker, the broker enters into a contract with some third person in order to meet the situation. On the due date the parties can either take or give delivery of the stipulated quantity of gold or settle on the difference." In a Bombay case Beaman J. held that these transactions were by way of wager, and they were void under this section, and adhered to this view in a later case. But at present time the presumption is that a teji mandi is not a mere wagering transaction; and this, it is submitted, is the correct rule.

Agreements between Pakka Adatia and his constituents.--- It was at one time held in some Bombay cases that a Pakka adatia was merely the agent of his constituent, and that therefore no transaction between them could be a wagering transaction. However, it was held on the evidence of custom that as regards his constituent the pakka adatia was a principal and not a disinterested middleman bringing two principals together. Since that decision it has been held by the High Court of Bombay in two cases that a transaction between a pakka adatia and his constituent may be by way of wager like any other transaction between two contracting parties, and that the existence of the pakki adat relationship does not of itself negative the possibility of a contract being a wagering contract as between them. One of those cases was taken to the Privy Council, and though the decree of the High Court of Bombay was reversed, the Privy Council taking a different view of the facts, the principle laid down by the Bombay High Court was affirmed by the tribunal. The same view has been taken by the High Court of Allahabad, and the East Punjab High Court.

Agreement collateral to wagering contracts.---Thus for our observations are confined to suits between the principal parties to a contract. Different considerations apply where the suit is brought by a broker or an agent against his principal to recover his brokerage or commission in respect of transactions entered into by him as such, or for indemnity for losses incurred by him in such transactions, on behalf of his principal.

There is no statute which declares agreements collateral to wagering contracts to be void. Nor is there anything in the present section to render such agreements void. It has accordingly been held that a broker or an agent may Successfully maintain a suit against his principal to recover his brokerage, commission, or the losses sustained by .him, even though contracts in respect of which the claim is made are contracts by way of wager. It does not follow because a wagering contract is void that contracts collateral to it cannot be enforced. The fact that a person has constituted another person his agent to enter into and Conduct wagering transactions in the name of the latter, but on behalf of the former (the principal) amounts to a request by the principal to the agent to pay the amount of the losses, if any, on those wageing transactions and if such payment is made, the agent is entitled to recover the amount from him. Conversely, an agent who has received money on account of a wagering contract is bound to restore the same to his principal. A deposit made by one gambler with another, as security for the observance of the terms of a wagering agreement, can be recovered, unless the amount has in fact been appropriated for the purpose for which it has been deposited. On the same principle a suit will lie to recover a sum of money paid by the plaintiff for the defendant and at his request, though such sum represents the defendant's loss on a bet. Similarly money lent for gaming purposes, or to enable the defendant to pay off a gambling debt is recoverable. Such transactions are neither against the provisions of the present section nor of S. 23.

But the transaction in respect of which the brokerage, commission, or losses are claimed must amount to a wagering agreement, and it is no answer to a suit by a broker in respect of such a claim against his principal that, so far as the defendant was concerned, be entered into the contracts as wagering transactions with the intention of paying the differences only, and that the plaintiff must have known of the inability of the defendant to complete the contracts by payment and delivery, having regard to his position and means. It must, further, be shown that the contracts which the plaintiff entered into with third persons on behalf of the defendant were wagering contracts as between the plaintiff and those third persons.

An agreement to settle differences arising out of a nominal agreement for sale which was really a gamble is no less void than the original wagering transaction. The result therefore is that though an agreement by way of wager is void, a contract collateral to it or in respect of a wagering agreement is not void.

Speculative transactions.---Speculative transactions must be distinguished from agreements by way of a wager. This distinction comes into prominence in a class of cases where the contracts are entered into through brokers. The modus operandi of the defendant in this class of cases is, when he enters into a contract of purchase, to sell again the same quantity deliverable at the same time in one or more contracts, either to the original vendor or to some one else, so as either to secure the profit, or to ascertain the loss, before the vaida day; and, when he enters into a contract of sale, to purchase the same quantity before the vaida day. This mode of dealing, when the sale and purchase are to and from the same person, has the effect, of course, of cancelling the contracts, leaving only differences to be paid. When they are to different persons, it puts the defendant in a position vicariously to perform his contracts. This is, no doubt, a highly speculative mode of transacting business; but the contracts arc not wagering contracts, unless it be the intention of both contracting parties at the time of entering into the contracts, neither to call for nor give delivery from or to each other. There is no law against speculation, as there is against gambling. It may well be that the defendant is a speculator who never intended to give delivery, and even that the plaintiffs did not expect him to deliver; but that does not convert a contract, otherwise innocent, into a wager. Speculation does not necessarily involve a contract by way of wager, and to constitute such a contract a common intention to wager is essential. It is in cases of the above description that there is a danger of confounding speculation, or that which is properly described as gambling, with agreements by way of wager; but the distinction in the legal result is vital.

The Contract Act in section 30 provides that agreements by way of wager are void; but that a transaction may fall within this provision of the law there must be at least two parties, the agreement between them must be by way of wager, and both sides must be parties to that wager.

Oral evidence of agreement being by way of wager.---Though an agreement in writing may ostensibly be for the purchase and sale of goods deliverable on a certain day, oral evidence is admissible to prove that the intention of the parties was only to pay the difference, the burden of proof, of course, being on the party who alleges that it was a wager. Such "intention" is a "fact" within the meaning of S. 3 of the Evidence Act (see cl. 1, illustration (d), and it may be proved by oral evidence under S. 92, proviso 1, of the same Act, as, if proved, it would invalidate the agreement under the provisions of the section now under consideration. The same principle has been reiterated in some cases. Thus in a Bombay case Jenkins C.J. said; "The law says that we must find, as best we can, the true intention of the parties; we must not take them at their written word, but we must probe among the surrounding circumstances to find out what they really meant.....We are not, and we must not be, bound by the mere formal rectitude of the documents if in fact there lurks behind them the common intention to wager, and parties cannot be allowed to obtain from the Courts any sanction for their wagers merely because they use a form which is not a true expression of their common purpose and intention. The surrounding circumstances and the position of the parities and the history of dealings of this class are legitimate, though not .exclusive, matters for our investigation into the true intention of the parties." In a still later case Davar J. said: "What the Court has to do is not simply to look at the transactions as they appear on the face of them, but to go behind and beyond them, and ascertain the true nature of the dealings between the parties by probing into surrounding circumstances and minutely examining the position of the parties and the general character of the business carried on by them." In this class of suits it would be almost idle to expect to get at the truth unless the Court takes the widest possible outlook consistent with the provisions of the Contract Act; otherwise the result would be that the statute could be violated with impunity by the simple and habitual device of cloaking wagers in the guise of contracts. There can be no question of a wager, if a substantial part of the goods has been delivered.

To determine the general character of the plaintiff's business, the Court ought to inquire how other contracts that may have been entered into by the plaintiff with the same defendant, or even with third parties, and relating to the goods in question, were previously performed by the plaintiff, whether by payment of differences or by delivery of goods. Thus where it appeared that at the vaida for which the contracts in question had been made the plaintiff had neither given nor taken any delivery of any cotton, it was held that the evidence tendered by the plaintiff to show that at other vaidas he had given and taken delivery of cotton was admissible, and that the lower Court was wrong in excluding this evidence. Upon the same principle, evidence is admissible to show that in the case of a particular class of contracts, or of contracts relating to a particular commodity, the normal course of dealing is to pay difference only.

Promissory note for debt due on a wagering contract.---Agreements by way of wager being void, no suit will lie on a promissory note for a debt due on a wagering contract. Such a note must be regarded "as made without consideration"; for "a contract which is itself null and void cannot be treated as any consideration for a promissory note."

Suit to recover deposit.---The prohibition contained in this section as regards the recovery of money deposited pending the event of a bet applies only to the case of winners. The winner of a wager or a bet cannot sue to recover the amount deposited by the loser with the stake-holder, but it is quite competent to the loser to recover back his deposit before the stake-holder has paid it over to the winner. In case, however, governed by the provisions of Bombay Act for Avoiding of Wagers (Amendment) Act, 1865, even a loser cannot recover back the deposit.

Lotteries.---S. 294.A of the Pakistan Penal Code makes it penal to keep any office or place for the purpose of drawing any lottery not authorised by Government or to publish 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.

Before the enactment of this section of the Code, lotteries not authorised by Government were prohibited by the Private Lotteries Act, 1844. The Act declares all such lotteries "common and public nuisances and against law." The Act was repealed by the Indian Penal Code Amendment Act, 1870, and in its place S. 294-A was inserted in the Code (see S. 10 of the amending Act).

Where a particular association was authorised by the Government by a letter to hold a lottery, the effect was that no prosecution would lie under the criminal law. But a sale or purchase of a ticket in such a lottery would still be a wagering contract under this section as well as under the Bombay Act; for the Government could not by a letter overrule the Central Act of the Acts of the Provincial Legislature.

What is a Lottery?---"Lotteries ordinarily understood are games of chance in which the event of either gain or loss of the absolute right to a prize or prizes by the person concerned is made wholly dependent upon the drawing or casting of lots, and the necessary effect of which is to beget a spirit of speculation and gaming that is often productive of serious evils." It was so stated in a Madras case where an agreement was entered into between twenty persons whereby it was provided that each should subscribe Rs. 200 by monthly installments of Rs. 10, and that each in his turn, as determined by lot, should take the whole of the subscriptions for one month. The defendant contributed Rs. 10 every month for a period of ten months, and in the tenth month he got his lot of Rs. 200. Thereupon a bond was taken from him by the plaintiff, who was the agent in the business, for the remaining Rs. 100 in order to ensure the furture regular payment of monthly installments for the further period often months. In a suit upon the bond it was contended that the transaction was illegal as being a lottery within the meaning of the Private Lotteries Act, 1844, and that the suit therefore could not be maintained. It was held that the transaction did not amount to a lottery. The Court said: "Here no such lottery appears to have taken place: It is not the case of a few out of a number of subscribers obtaining prizes by lot. By the arrangement all got a return of the amount of their contribution. It is simply a loan of the common fund to each subscriber in turn, and neither the right of the subscribers to the return of their contributions nor to a loan of the fund is made a matter of risk or speculation. No loss appears to be necessarily hazarded, nor any gain made a matter of chance." A "chit fund" plan under which all subscribers are repaid their capital by "a fixed date, though some determined by lot get more and sooner, is not a lottery.

Default by Bank---Recovery of security by Bank---Relationship between respondent Bank and appellant firm---One of agency---Respondent Bank under obligation to present three bills of lading of foreign Bank before a specified date alongwith Bill of Exchange---Bill of Lading and Bill of Exchange being most integrated parts of same transaction, failure to present full set of bills of lading being immediate cause of non-payment of Bill of Exchange, respondent Bank, held, marred security and not entitled to any decree on basis of bills of exchange.

Wagering Contract---What. is---Such contracts are void---No suit for recovery of money can be brought on such contract. A wagering contract is one by which two persons mutually agree that on determination of a future uncertain event one shall win from the other and the other shall pay a sum of money, there being no other real consideration for the making of such contract. In cases of such contract the intention of the parties .is to be determined as a question of fact. It is to be seen whether actual delivery of the goods is contemplated or only the differences are required to be paid. All contracts by way of gaming or wagering are void and no action can be brought by the winner on a wager, either against the loser or the stake-holder to recover what is alleged to be won.

30-A. Agreements collateral to wagering agreements.---All agreements knowingly made to further or assist the entering into, effecting or carrying out, or to secure or guarantee the performance, of any agreement void under section 30, are void.

30-B. No suit for recovery of money, commission etc., in respect of void agreements---No suit or other proceeding shall lie for the recovery of.---

(a) any sum of money paid or payable in respect of any agreement void under section 30-A, or

(b) any commission, brokerage, fee or reward in respect of knowingly effecting or carrying out, or aiding in effecting or carrying out, of any such agreement, or of any sum of money otherwise claimed or claimable in respect thereor, or

(c) any sum of money knowingly paid or payable on account of any person by way of commission, brokerage, fee, reward or other claim in respect of any such agreement.

30-C. Payment of guardian, executor etc., in respect of void agreements not to be allowed credit.---No guardian, executor, administrator, heir or personal representative of any minor or deceased person, as the case may be, shall be entitled to or allowed any credit in his account for or in respect of any payment made by him on behalf of such minor or deceased person in respect of any such agreement, or any such commission, brokerage, fee, reward or claim as is referred to in sections 30-A and 30-B.