Wife not responsible for husband's debts, says HC

In a writ petition filed by K P Santhosh Kumar against Standard Chartered Bank, his wife Sunanda had appeared before the Lok Adalat and signed the compromise in respect of a loan obtained by Santhosh Kumar.

As per the compromise the wife had paid Rs 1.61 lakh and failed to remit Rs 23,000.
For failure of not paying Rs 23,000, the bank took a warrant for the attachment of movable assets.   

The Court observed that there was nothing on record to show that the wife of the petitioner had represented him as general power of attorney (GPA) holder and or appeared before the Adalat as a GPA holder of the petitioner or as a co-obligant of the petitioner.

The Court, hence, ruled that the petitioner’s wife could not be signatory to the compromise said to have been arrived at before the Lok Adalat. “Even if the wife has signed it, the Adalat should not have accepted her petition filed for settlement,” the Court ruled.

In another case before Additional Consumer Forum IV at Bangalore, it was held that the bank cannot exercise right of set off and bankers general lien (right of the creditor to retain assets until the debt is paid, unless there is contract) on joint account held by the husband and wife for the debt of husband.

In a case between Usha Saraswathi v/s HDFC Bank Ltd the Court found that the bank cannot recover or force the wife of the borrower to pay the amount due to them. Usha Saraswthi, who is running a provision and general store at Nagarbhavi Ring Road, was harassed by the recovery agents when her husband defaulted on the personal loan.

The recovery agents forcibly recovered one monthly installment of Rs 10,848 and started harassing her to pay the balance EMIs repeatedly. She filed a suit for permanent injunction against the defendants.

The Court observed: “If really there is a due or balance of loan amount, it is for the defendants to recover the said amount with due process of law.” It further observed the wife was not a party to the loan transactions taken between the defendants and her husband, nor was she the guarantor for the loan.

The Court restrained the bank and the recovery agents from harassing them or trying to reclaim the amount from the wife. C V Giddappa, General Secretary, Credit Card Holders Association, said the three judgements confirmed that the wife was not responsible for the debts of her husband. Stating that they received several complaints, he said they were already in the process of filing civil and criminal charges against the banks.