The Supreme Court on Monday ruled that a husband can be liable for his wife’s stock market debt based on an oral agreement. According to the Bar and Bench report, the Apex court made the observations while stressing that the arbitral tribunal can make the husband accountable, mentioning Bye-law 248(a) of the Bombay Stock Exchange (BSE) Byelaws, 1957.

The Bar and Bench Report mentioned the top court stating that “Under Bye-law 248(a) (BSE), the arbitral tribunal could have exercised jurisdiction over husband on the basis of an oral contract that he would jointly and severally be accountable for the transactions undertaken in respondent no. 2’s (wife) account.” 

The ruling came after a stockbroker sought recovery of a debit balance from wife’s trading account. 

The husband contested against the ruling for holding him liable and giving the ruling in favour of the broker. The arbitral tribunal held both husband and wife liable. The tribunal was of the view that husband’s involvement in the transaction was good enough to establish shared liability. 

The Supreme Court upheld the tribunal’s verdict and dismissed the husband’s claims while directing him to comply with the jurisdiction of the tribunal.