Thakar Dass Bagai vs Dr. C.N. Bhargava

Falshaw, C.J.—This is an appeal against the order of a Tribunal constituted under the Displaced Persons (Debts Adjustment) Act of 195), dismissing a petition filed by the Appellant u/s 13 of the Act.

This section is the one which empowers the Tribunal to dispose of claims for the recovery of debts made by displaced persons against non-displaced persons -The Appellant Thakar Dass Bagai carries on the business of a stock broker at Delhi and is a displaced person. This was disputed before the Tribunal, but is no longer in dispute. Between 1948 and August 1951 the Respondent Dr. C.N. Bhargava, a resident of Lucknow, entered into a number of transactions with the Appellant regarding the purchase and sale of shares as a result of which a sum of Rs. 5,392/8/- remained due from the Respondent to the Appellant who claimed this amount together with Rs. 405/- on account of interest of 6% per annum in his application.

The petition was contested on several grounds by the Respondent, who denied a number of transactions listed in the petition and alleged that the Appellant had cheated him in various ways and had also caused losses to him by failing to carry out his instructions. The principal defence on the basis of which the petition was dismissed was that the transactions in dispute were of a wagering character.

This question is now the only matter in dispute since no attempt had been made on behalf of the Respondent to reverse the finding of the Tribunal that the broker carried out the instructions of his client properly and that he entered into the transactions from which the losses resulted with two firms of brokers in Bombay.

The main ground on which the Tribunal decided in favour of the debtor was that the transactions between the parties were on the basis of constituent and pacca arhti and that at any rate from August or September 1948 onwards there was to be no delivery of shares at all and merely a fortnightly determination of losses and profits. Reliance was placed on the decision of the Full Bench in Firm Ram Dev Jai Dev v. Seth Kaku A. I. R. 1950 E.P. 9 : (1950)52 P.L.R. 31 (F.B ), in which, however, although there may have been seme reference in the authorities discussed to wagering contracts, such contracts were not at all under consideration, the point considered by the learned Judges being whether a constiueut can file a suit for rendition of accounts against a pacca arhti.

The learned Tribunal appears to have considered that the sole criterion for determining whether contracts are wagering contracts or otherwise is whether both parties should have intended that delivery was not to be made. It was held in AIR 1932 273 (Lahore) , that the essence of a wagering contract is that both parties should have intended the delivery not to be made. The same view is approved in Nand Kishore Vs. Lachmi Narain, in which it had been held, ''In order to decide whether there is a wagering contract it is neressary to prove that there was a contract between the parties, that delivery would neither be taken nor given and that the parties intended to deal in difference only.

However, the principle appears to be equally well-established that where the customer gambles but the broker carries out his instructions the customer cannot set up a plea oi gaming and wagering against the broker''s claim, This has been held by Lord Williams J. in Goaldas Daga Vs. Manicklal Baity, . The learned Tribunal sought to distinguish that case on the ground that there was no question of pacca arth in that case. This distinction, however, does not exist in the case Bhagwandas Parasram v. Burjorji Ruttonji Bomanpji AIR 1917 P.C. 101. This was a case from Bombay and it was held by their Lordships that pacca arth dealings are well established as a legitimate mode of conducting commercial business in the Bombay market and further that the fact that the principal was a speculator who never intended to give delivery and even that the agent did not expect him to deliver would not convert a contract otherwise innocent into a wager. It was observed by Sir Lawrence Jenkins. J. that speculation does not necessarily involve a contract by way of wager and to constitute such a contract a common intention to wager is essential. In the present case the broker had shown that he carried out the transactions which later resulted in losses with brokers at Bombay and in such circumstances he is evidently to recover the losses incurred by him even though his relationship with the Respondent was that of customer and pacca arthi. The test is not solelly whether both parties do not intend to deliver, but whether both intend to gamble. I am therefore of the opinion that the Appellant was entitled to the sum claimed and accepting the appeal grant the Appellant a decree for Rs. 5,797/8/ with costs throughout against the Respondent.