Supreme Court holds Husband liable for Wife's Stock Market Debt [Read Judgement]:

Supreme Court holds Husband liable for Wife's Stock Market Debt [Read Judgement] The Supreme Court declared last week that a husband might be held equally and severally liable for his wife's stock market liabilities under an oral agreement. The decision came in the case of AC Choksi Share Broker vs. Jatin Pratap Desai. The judgement underlines that the arbitral tribunal has the competence to exercise jurisdiction over the husband, citing Bye-law 248(a) of the Bombay Stock Exchange (BSE) Byelaws of 1957. "First, by interpreting Bye-law 248(a) of the Bombay Stock Exchange Byelaws, 1957, which stipulates for arbitration between members and non-members of the BSE, and considering the nature of respondent no 1's (husband) involvement in transactions conducted in respondent no 2's (wife) account, we have held that an oral contract undertaking joint and several liability comes within the scope of the arbitration clause, and the arbitral tribunal could exercise jurisdiction over respondent no 1", the court stated. The issue arose from a stockbroker's attempt to recover a significant debit sum from the wife's trading account. Both husband and wife had separate trading accounts with the appellant stockbroker, who claimed they had consented to manage them jointly. After transferring funds from the husband's account to compensate the wife's trading losses, the debit amount increased dramatically due to a market slump. Seeking recovery, the broker initiated arbitration, holding both parties liable for the remaining debts. Although the husband challenged the arbitration proceedings against him, the panel decided in favour of the broker, concluding that his participation in the transactions justified joint liability. The Supreme Court upheld the tribunal's verdict, overturning the husband's objections and affirming its jurisdiction. As a result, he was ordered to return Rs 1.18 crore along with 9% yearly interest. "The arbitral tribunal granted the appellant's claim and held both respondents jointly and severally liable to pay Rs.1,18,48,069 plus interest at 9% per annum from May 1, 2001 until the date of payment. It also dismissed respondent no. 1's proposed counterclaim," according to the judgement.