Husbands will be liable for better halves’ stock market losses, says Supreme Court
As much as this level – February 19, 2025 at 02:09 PM.
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Fresh Delhi
Supreme Court disposes 24-365 days-outdated topic involving A C Chokshi Share Dealer and a couple who opened a joint trading fable with the broking firm
By-legislation of the Bombay Inventory Exchange affords for arbitration between contributors and non-contributors of the BSE, says SC
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Husbands will be liable for the better halves’ stock market losses, a Supreme Court ruling has indicated whereas disposing a 24 years outdated topic.
“The arbitral award dated February 26, 2004 is upheld in its entirety and respondent no. 1 (husband) is collectively and severally liable, alongside with respondent no. 2 (wife), to pay the appellant the arbitral sum of ₹1,18,48,069 alongside with 9 per cent hobby each year from Would possibly perhaps honest 5, 2001 till date of compensation as has been directed by the arbitral tribunal,” dominated a division bench of Justices Pamidighantam Sri Narasimha, and Manoj Mishra.
Trading troubles
The topic involves an charm by A C Chokshi Share Dealer against a ruling by the division bench of the Bombay Excessive Court. The respondents had been a couple who opened a joint trading fable with the broking firm. As a result of market fracture, the debit balance in respondent no. 2’s fable bludgeoned to over ₹1.18 crore as on April 12, 2001, which used to be the recoverable quantity in arbitration.
The arbitration used to be initiated by the broking firm. The arbitral tribunal stumbled on that both respondents had been collectively and severally liable for repaying the debit balance in respondent no. 2’s fable. The couple moved to the Excessive Court, the set the one establish bench blueprint aside the arbitral award. Then again, the division bench of the Excessive Court allowed the charm and blueprint aside the arbitral award handiest against him. Then the broking firm moved to the Supreme Court.
“The topic coming up within the demonstrate charm is whether or no longer or no longer respondent no. 1, who is the husband of respondent no. 2, might possibly well well had been made a celebration to the arbitration that used to be invoked by the appellant, who is a registered stock dealer, and held to be collectively and severally liable for the debit balance that had gathered within the wife’s (respondent no. 2’s) fable with the appellant,” the division bench of the apex court highlighted in its voice.
After going by device of your total arguments made, the bench listed reasoning for allowing the charm. First, the by-legislation of the Bombay Inventory Exchange affords for arbitration between contributors and non-contributors of the BSE. Accordingly going by the involvement of husband in transactions performed by the wife, “we possess now got held that an oral contract project joint and a complete lot of other liability falls within the scope of the arbitration clause and the arbitral tribunal might possibly well well exercise jurisdiction over respondent no. 1,” the bench mentioned.
2nd, going by the settled jurisprudence on the scope of judicial intervention under Arbitration and Conciliation Act, 1996, the bench held that the arbitral tribunal arrived at a cheap conclusion, in line with evidence, as to the joint and a complete lot of other natures of the respondents’ liability. “The arbitral award does now not undergo from perversity and patent illegality as has been held by the Excessive Court within the Share 37 charm, and resulting from this truth, we possess now got upheld the arbitral award in its entirety,” the court mentioned.
