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Principle : If any person enters into wagering or betting agreements, such agreements would be illegal…

Because Birbal has an insurable interest in his own house, an agreement to make good his loss by fire in return for a premium is a contract of insurance and not a wager…

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Principle : If any person enters into wagering or betting agreements, such agreements would be illegal and cannot be given effect for enforcing obligations. Fact : Akbar enters into an agreement with Birbal that if he pays Akbar a premium of Rs.500 per annum and Birbal's house is devastated by fire within one year of entering into the agreement, Akbar shall make good the loss suffered by Birbal.

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Correct answer B

Because Birbal has an insurable interest in his own house, an agreement to make good his loss by fire in return for a premium is a contract of insurance and not a wager under Section 30 of the Indian Contract Act, so it is a "Valid contract and can be enforced if Birbal's house is destroyed."

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