Legal Principle: 1. Wagering agreement are void. 2. Collateral agreement to wagering contracts are valid.Factual Situation: XYZ Bank lends ` 40,000 to Sabu in order to enable him to award as prize to Randeep who is the winner of horse race. Later Sabu refused to pay the prize stating that horse racing is wagering agreement. Can XYZ Bank recover money from Sabu. (CLAT 2016)

Each question consists of legal principle(s) (hereinafter referred to as 'principle') and facts. Such proposition may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this section. You have to apply the principles to the given facts to arrive at the most reasonable conclusion. Only one of the alternatives, i.e., (A), (B), (C), or (D) is the most reasonable conclusion. Remember: you must not rely on any principle except the principles that are given for every question.