What You Should Know About The Married Woman Property Act

Neil Radhakrishnan took a home loan of Rs 1 crore to buy a property in a snazzy housing complex in Gurgaon. He ran losses in his paper industry business, and defaulted on his equated monthly installments (EMIs). The bank sent him repeated reminders, but he could not arrange funds for paying monthly installments. The bank finally decided to attach his property. 

Neil's wife Vandana was very apprehensive. She feared that the bank might attach her property to recover dues from her husband. Their lawyer friend told them that the bank cannot do so, because she is not a co-borrower on the loan. She had not given personal guarantee either. So, her property, assets, and income cannot be attached just because she is the wife of a defaulter. 

The Married Women Property Act, 1874, safeguards the interests of women, but not of their husbands. 

Highlights of the Act

The Act states that any debt of a married woman, before or after the marriage, is the liability of the husband. For instance, if a woman takes any type of loan before marriage, after marriage, her husband shares the liability as well. In case of home loans taken by a woman before marriage, it is the husband's liability to repay the loan without having any right on the property. Moreover, there is no provision to file claims against such debts.

The rule may vary from state to state, because the Act gives power to state governments to amend provisions of the Act retrospectively or prospectively to include/exclude any race, sect or tribe. 

A woman's streedhan or a woman's separate property on which her husband has no claim, includes 

(a) Her earnings before or after marriage from employment or business.

(b) Her income from her literary, artistic, or scientific skills.

(c) Any savings or investment from above-mentioned earnings.

In case a woman has to part with her separate property — which could be due to some family emergency or her husband or in-laws needing the money — the moveable or immoveable property can be recovered through legal proceedings. It is always advisable to keep the woman's property separate. 

The provisions of this Act are not applicable if a woman has given her personal guarantee of any credit or loan. For instance, had Neil's wife Vandana been the personal guarantor of her husband's home loan, she would not have been able to claim immunity under the Married Women Property Act. So, if a wife defaults on loan repayment, her property can be attached. The basic idea behind the Act is that the bank cannot attach the entitlement of life insurance proceeds, which is for protection of the family.