The top court stated that the liability would be based on an oral agreement between the two and the nature of their financial dealings
Supreme Court of India.
The Supreme Court in a ruling last week held that husband is liable both jointly and severally for wife's stock market debt.
The top court stated that the liability would be based on an oral agreement between the two and the nature of their financial dealings.
The development came after a stockbroker, AC Chokshi filed a case against a couple for recovery of debt. In 1999, the couple approached Chokshi for opening trading accounts, although both of them had separate accounts, he contended that the husband attempted to cancel out his credit balance against the debit balance in his wife's account.
But the stock market crash in 2001, made the debit balance in the wife's account spike up to Rs 1.18 crore.
Seeking to recover this huge amount, the stockbroker approached an 'arbitral tribunal' which ruled the couple to pay Rs 1.18 crore with a 9 percent interest.
However, the award was partly set aside by the Bombay High Court after the couple's appeal. The High Court maintained that the couple with two separate accounts are two separate legal entities and therefore the award was illegal.
The Supreme Court overturned this decision and upheld the tribunal's award.
( Source : Deccan Chronicle )
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