A promissory note executed in lieu of a wagering contract is not enforceable, even in the hands of a third party who is aware of the nature of the transaction.

SHARFUDDIN AHMED, J.

( 1 ) THESE two revisions 713 and 716 of 1961 arise out of a common order of the Additional Subordinate Judge, Kakinada and made in S. C. Suits Nos. 251 and 252 of 1960 on his file.

( 2 ) THE two suits were filed by the plaintiff-respondent against the petitioner-defendant alleging that his was a registered firm carrying on business at Kakinada. The petitioner-defendants was a joint family firm carrying on business at the same place and one Raja Ram the father is the managing member of the family; that on 1-12-1959 the petitioner-defendant borrowed a sum of Rs. 900. 00 and executed a promissory note agreeing to pay the said amount with interest at 1-0-6% per mensem. In the second suit the amount claimed was Rs. 1500. 00 and the promissory note was dated 27-11-1959.

( 3 ) THE petitioner-defendant pleaded that the two notes are not supported by any valid consideration. He was carrying on his speculative business in castor seeds, cotton, silver and gold with one Umed Mall. The petitioner-defendant used to purchase and sell by forward contracts and neither party had any time to take actual delivery of the articles at any stage. The contracts were being adjusted by settling differences. In that connection the amount was found due and pronotes were executed in the name of the plaintiff-respondent who is also a partner of the firm and a brother of Umedmal. As the contracts were wagering contracts, their claims were not enforceable.

( 4 ) THE point at issue in the lower court was whether the suit notes were the result of wagering contracts. The learned Additional Subordinate Judge on a consideration of the evidence adduced on either side, came to the conclusion that the liabilities of the defendant-petitioner under the pro-notes arose out of wagering contracts. The conclusion reached by him, in his own words reads as under:--"on the question of fact, I am satisfied that there is no evidence on the side of the plaintiff that cash passed under the pronotes, but only the liability of the defendants under a wagering contract has been put an end to by the execution of the suit promissory notes. "in spite of the said conclusion, he decreed the suits on the grounds that the pronotes in favour of the plaintiff-respondent had put an end to the liability under the wagering contract, which though void, are not illegal or opposed to public policy relying on a decision in Gherumal Parekh v. Mahadeodas Maiya, 1959-2 Andh WR (SC) 81 : (AIR 1959 SC 781 ). It is against this order that the two revision petitions have been filed.

( 5 ) THE learned counsel for the petitioner contended that once the court had come to the conclusion that the consideration for the notes was a wagering contract it should not have granted a decree in favour of the plaintiff. The mere fact that the plaintiff was a third/party, would not be sufficient to justify the passing of a decree particularly when it has been brought on record that the plaintiff was the brother of Umedmal with whom the respondents had entered into wagering contracts. There is no denying the fact that the conclusion of the lower court as to the nature of the liability is indisputable. At more than one place in the impugned order, it has been found by the lower court that the respondents had entered into wagering contracts with Umedmal and Umedmal was a brother of the plaintiff-respondent. In the concluding portion of para 8 the Court has observed as under:-- "i therefore find on the point that the defendants in these suits entered into wagering contracts with Umedmal. " In para 9 it is stated that the plaintiff in both the suits is one Mookanchand who is a brother of Umedmal and he has aso signed some of the wagering contracts entered into by the defendant with Umedmal. Further, it was observed that there is no evidence on the side of the plaintiff that cash passed under the pronotes. It is therefore clear that the contention of the plaintiff that the notes were executed for cash cons

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