The Supreme Court has held that a husband can be jointly and severally liable for losses in his wife's stock market trading account under certain conditions. The decision is based on an oral agreement and their financial dealings, allowing an arbitral tribunal to extend jurisdiction over the husband.

The case, AC Choksi Share Broker vs. Jatin Pratap Desai, arose when a woman incurred substantial losses in her trading account, while her husband’s account remained profitable.

The broker claimed that both spouses had agreed to operate their accounts jointly and share liabilities. Acting on the husband's oral instructions, the broker transferred funds from his account to cover his wife's losses. However, a market crash escalated the losses, leading to arbitration.

The arbitral tribunal ruled in favor of the broker, citing evidence that the husband was actively involved and had agreed to cover shortfalls. The husband contested this, arguing that fund transfers without written authorization violated SEBI guidelines.

A Bombay High Court Division Bench sided with the husband, ruling that his liability stemmed from a private agreement, separate from official stock transactions.

On appeal, the Supreme Court overturned this decision, stating that the couple's financial history demonstrated shared responsibility. Upholding the arbitral award, the court ordered the husband to pay ₹1.18 crore plus 9% annual interest.

This ruling clarifies that a husband may be held liable for his wife’s trading losses if evidence supports a joint financial commitment, even without a written contract.