Licensing chiefs said the Mognies premises licence could be transferred into Savera Patel’s name because there was no evidence that she, any other family members or staff were involved in any “wider sexual grooming activity”.
Her solicitor said Mrs Patel was of “impeccable character”.
Her husband Siraj Patel, 49, of Dallas Road, Lancaster, was found guilty of four counts of sexual activity with a child under 16 and one count of sexual grooming after a trial at Preston Crown Court last November.
In December 2016, he was sentenced to four years in jail for these offences, which were committed against a 15-year-old girl in his delivery van.
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Police and immigration officials also raided Mognies last July and found three illegal immigrants from India all living above Mognies in one room.
Police had called for Mrs Patel’s appeal for a transfer to be thrown out.
A solicitor acting for Lancashire police said at Wednesday’s Lancaster City Council licensing sub-committee hearing that they believed Mr and Mrs Patel were “one and the same person”.
But John Halewood-Dodd, of LHD Solicitors, acting on behalf of Mrs Patel, said she was “affronted” by this suggestion.
“Mrs Patel and her family shouldn’t be penalised for something that her husband did,” he said.
“She is a lady of impeccable character, she has no involvement with the police whatsoever, she was quite affronted when comments were made she was one of the same person. Is a wife the same person as a husband?
“I think the police in this particular case have tried to suggest he should be punished twice.”
Mrs Patel took over the takeaway in November 2016 and also jointly ran a newsagents on Penny Street with her husband, which closed in October 2015.
Licensing chiefs heard how their former newsagent business racked up £90,000 debt for the family, which was currently being paid off by Mrs Patel through the Mognies business.
The mum-of-three assured councillors that her husband would not be returning to Lancaster when he is released from prison.
But police said the prevention of crime and disorder would be seriously undermined if the transfer of licence was to go ahead.
“When Mr Patel is released from prison, he may be due for early release in November 2018, he will use the opportunity through takeaways to make contact with young children and pursue them for sexual purposes,” said Richard Williams, a solicitor for Lancashire Constabulary.
“We believe Mrs Patel is still in close contact with her husband in prison, we believe they run the same bank accounts, they are one and the same person.
“My concern is that she is holding the fort for when he comes back.”
Police said there was still a serious risk of child grooming at the premises.
“It is difficult to know exactly what’s going on in those takeaways sometimes, whereas in the daytime we can look at that with patrols to make sure there is no children in the premises,” said PC Andrew Taylor, licensing officer.
“Sometimes it is difficult because the front doors are closed and the back doors are open.
“If he was released he will be back in the takeaway and will carry on as normal, whether his wife is in or not.”
The committee concluded that Mrs Patel only has limited contact with her husband and intends to run the premises with no input from him. They also said that whilst the bank account for the Penny Street takeaway is still in joint names, Mrs Patel has full control over the business and does not intend for Mr Patel to have any future involvement.
Lancashire Police will press ahead with a review of the premises licence at Mognies. They are appealing to revoke the serving of late night refreshment from Monday to Sunday, 11pm to 5am.