LexGHERULAL PARAKH versus MAHADEODAS MAIYA AND OTHERS
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r959 The Cominissioncr of Income-tax, llydcrabad- Deccan v. Jt1essrs. Vazir Sultan & Sous Bhagwati ] . r959 March 26. 406 SUPREME COURT REPORTS [1959] Supp. I would therefore allow this appeal with costs throughout. By COURT: In accordance with the majority judg- ment of the Court, the appeal is dismissed with costs throughout. Appeal dismissed. GHERULAL PARAKH v. MAHADEODAS MAIYA AND OTHERS (JAFER IMAM, A. K. SARKAR and K. SuBBA RAO, JJ.) Wager-Collateral contract-Agreement of partnership to enter into wagering transactions-Legality-Indian Contract Act, r872 (9 of I872), SS. 23, 30. The question for determination in this appeal V11as \Vhether - an agreement of partnership ¥.•ith the object of entering into vvagering transactions was illegal within the meaning of s. 23 of the Indian Contract Act. The appellant and the respondent No. I entered into a partnership with the object of entering into forward contracts for the purchase and sale of wheat with two other firms and the agreement between them was that the res- pondent would enter into the contracts on behalf of the partner- ship and the profit or loss would be shared by the parties equally. The transactions resulted in loss and the respondent paid the entire amount due to the third parties. On the appellant deny- ing his liability for the half of the loss, the respondent sued him for the recovery of the same and his defence, inter alia, was that the agreement to enter into the wagering contracts \Vas unlawful under s. 23 of the Contract Act. The trial Court dismissed the suit. The High Court on appeal held that though the wagering contracts \Vere void under s. 30 of the Indian Contract Act, the object of the partnership was not unlawful within the meaning of the Act and decreed the suit. It was contended on behalf of the appellant (r) that a wagering contract being void under s. 30 of the Contract Act, was also forbidden by law within the (2) S.C.R. SUPREME COURT REPORTS 407 meaning of s. 23 of the Act, that (2) the concept of public policy I959 was very comprehensive in India since the independence, and such a contract would be against public policy, (3) that wager- Gherulal Pa.akh ing contracts were illegal under the Hindu Law and (4) that v. they were immoral, tested by the Hindu Law doctrine of piocis Ma/iadeodas obligation of sons to discharge the father's debts. Maiya & Others Held, that the contentions raised were unsustainable in law and must be negatived. Although a wagering contract was void and unenforceable under s. 30 of the Contract Act, it was not forbidden by law and an agreement collateral to such a contract was not unlawful within the meaning of s. 23 of the Contract Act. A partnership with the object of carrying on wagering transactions was not, therefore, hit by that section. Pringle v. J afer Khan, (1883) I.L.R. S All. 443, Shibho Mal v. Lackman Das, (1901) I.L.R. 23 All. 165, Beni Madho Das v. Kaunsal Kishor Dhusar, (1900) I.L.R. 22 All. 452, Md. Gulam Mustafakhan v. Padamsi, A.LR. (1923) Nag. 48, approved. Thacker v. Hardy, (1878) L.R. 4 Q.B. 685, Read v. Anderson, (1882) L.R. IO Q.B. IOO, Bridger v. Savage, (1885) L.R. IS Q.B. 363, Hyams v. Stuart King, [1908] 2 K.B. 696, Thwaites v. Coulth- waite, (1896) I Ch. 496, Brookman v. Mather, (1913) 29 T.L.R. 276 and J ajfrey & Co. v. Bamford, (1921) 2 K.B. 351, Ramlall Thackoor- seydass v. Soojumnull Dhondmull, (1848) 4 M.l.A. 339, Doolubdas Pettamberdass v. Ramlall Thackoorseydass and Ors. (1850) 5 l\U.A. I09, Raghoonauth Shoi'Chotayloll v. Manickchund and Kaisreechund, (1856) 6 M.I.A. 251, referred to. Hill v. William Hill, (1949) 2 All E.R. 452, considered. The doctrine of public policy was only a branch of the com- mon law and just like its any other branch, it was governed by precedents; its principles had been crystallised under different heads and though it was permissible to expound and apply the)Tl to different situations, it could be applied only to clear and un- deniable cas~s of harm to the public. Although theoretically it was permissible to evolve a new head of public policy in excep- tional cirumstances, such a course would be inadvisable in the interest of stability of society. Shrinivas Das Lakshminarayan v. Ram Chandra Ramrattandas, I.L.R. (1920) 44 Born. 6, Bhagwanti Genuji Girme v. Gangabisan Ramgopal, I.L.R. 1941 Born. 71, and Gopi Tihadi v. Gohhei Panda, I.L.R. 1953 Cuttack 558, approved.
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