Husband Can Be Held Liable for Wife’s Stock Trading Losses Based on Oral Agreement: SC
The Supreme Court has recently made a significant ruling in a case that has far-reaching implications for married couples and their financial dealings. In a landmark decision, the court has upheld an arbitration tribunal’s ruling that a husband can be jointly or severally liable for his wife’s stock market debt based on an oral agreement.
The case was filed by a stockbroker against a married couple who had entered into an oral agreement, wherein the husband had allegedly agreed to bear the risk of their joint stock market investments. The stockbroker had advanced a loan of ₹1.18 crore to the couple, which the wife had used to purchase shares. However, the shares declined in value, resulting in a loss of ₹1.18 crore. The stockbroker then filed a claim against the couple, seeking repayment of the loan with interest.
The arbitration tribunal ruled in favor of the stockbroker, holding that the couple was liable to pay the loan amount with interest. The tribunal also held the husband jointly and severally liable for the wife’s trading losses, based on the oral agreement entered into between the couple. The husband challenged the tribunal’s ruling in the Supreme Court, arguing that there was no written agreement and that he had not given any specific undertaking to bear the risk of their joint investments.
The Supreme Court, however, upheld the tribunal’s ruling, holding that the oral agreement between the couple was sufficient to make the husband liable for the wife’s trading losses. The court observed that the husband had not disputed the fact that he had given an oral undertaking to bear the risk of their joint investments, and that the wife had acted in reliance on this undertaking.
The court also noted that the husband had not produced any evidence to contradict the wife’s claim that he had given the undertaking. In the absence of any evidence to the contrary, the court held that the husband was bound by the terms of the oral agreement and was therefore liable for the wife’s trading losses.
The implications of this ruling are significant, particularly for married couples who have joint financial dealings. The ruling makes it clear that a husband can be held liable for his wife’s stock market debt based on an oral agreement, even in the absence of a written agreement. This means that husbands who enter into oral agreements with their wives to bear the risk of their joint investments can be held liable for any losses that their wives may incur.
The ruling also highlights the importance of ensuring that any agreements entered into between married couples are in writing and signed by both parties. While oral agreements may be sufficient in certain circumstances, they can also be difficult to enforce and may not be recognized by the courts.
In conclusion, the Supreme Court’s ruling in this case has significant implications for married couples and their financial dealings. The ruling makes it clear that husbands can be held liable for their wives’ stock market debt based on oral agreements, and highlights the importance of ensuring that any agreements entered into between married couples are in writing and signed by both parties.
