MPID-Attachment of Wife’s house is not valid even if Husband is accused & co-borrower

MPID Act – Attachment of Spouse”s House Cannot Be Made and Continued Merely Because Husband is an accused or co-borrower.  Property purchased substantially from the home loan Ordered to be Released from Attachment.

MPID Attachment Must Correspond with Identifiable Tainted Funds

MPID Attachment of Spouse House As Husband is Accused

The residential property of the petitioner at Chandigarh was attached in terms of the Notifications in special MPID Case No.1 of 2014 on the ground that it is belonging to M/s. Lotus Refineries Pvt Limited – a borrower company of National Spot Exchange.

By the order dated 25.11.2021, the application of the petitioner for release of attached property was rejected.

HELD that the property was purchased substantially from out of the home loan of Rs.3.63 crores.  The said property was mortgaged with the Bank.   However, for non-payment of the loan, the PNB had obtained the recovery certificate on 29.1.2016.

The forensic audit report shows that an amount of Rs.55 lakhs was transferred to the appellant by her husband – accused.  However, the record indicates that the amount of Rs.68,80,995/- was recovered by EOW.

We are unable to accept the contention of Mr. Lakhawat that, the attachment must be sustained merely because the Appellant’s husband, Arun Sharma, was a co-borrower under the loan obtained from the Punjab National Bank. The uncontroverted fact that the Appellant was a housewife with no independent source of income would also not, by itself, justify the attachment of the entire property, when a substantial part of the consideration was admittedly funded by the Bank and the amount shown to have been received from her husband has already been adequately secured by way of attachment/seizure.

The impugned order has placed undue emphasis on the fact that the Appellant’s husband was a co-borrower under the loan transaction. In our view, the mere inclusion of the Appellant’s husband as a co-borrower would not alter the nature or character of the loan advanced by the Bank to the Appellant as the principal borrower.

Judgment dated 21.7.2026 of the High Court of Bombay in Interim Application No.146 of 2026 of National Spot Exchange Limited  in Criminal Appeal No.86 of 2022 of Seema Sharma  Vs.  The State of Maharashtra and others