The Supreme Court has delivered a strong statement on the supremacy of maintenance rights for a wife and children, asserting that these rights outweigh creditors' claims under laws like the SARFAESI Act and the Insolvency and Bankruptcy Code (IBC). The Court emphasised that the right to maintenance is not just a financial obligation but a fundamental right deserving of superior status in comparison to the statutory rights of creditors.
The bench, consisting of Justice Surya Kant and Justice Ujjal Bhuyan, stated that "the right to maintenance is commensurate to the right to sustenance. This right is a subset of the right to dignity and dignified life, which in turn flows from Article 21 of the Constitution of India. In a way, the right to maintenance being equivalent to a fundamental right will be superior to and have an overriding effect than the statutory rights afforded to Financial Creditors, Secured Creditors, Operational Creditors or any other such claimants encompassed within the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, the Insolvency and Bankruptcy Code, 2016 or similar such laws."
This case arose from an appeal by a businessman, the appellant, whose maintenance obligations were contested after the Gujarat High Court raised the amount to be paid to his wife and children. Initially, a Family Court in Surat had granted a modest maintenance of Rs. 6,000 per month to the wife and Rs. 3,000 per child. However, the High Court, after considering the appellant’s financial standing as a diamond factory owner, increased the maintenance to Rs.1 lakh per month for the wife and Rs. 50,000 per month for each of the children. The appellant challenged the decision, presenting income-tax returns and claiming that his financial condition had worsened due to business losses.
While addressing the appeal, the Supreme Court took note of the appellant’s claims but ultimately ruled that the interim maintenance order issued earlier in 2022 would continue. This reduced the maintenance to Rs. 50,000 for the wife and Rs. 25,000 for each child per month, but it also required the appellant to pay arrears at the higher rate set by the Gujarat High Court for the period before the interim ruling.
Importantly, the Supreme Court emphasised that the right to maintenance has an overriding effect in all legal proceedings, including those under SARFAESI and IBC. "The charge of arrears of maintenance, payable to the respondents, shall have a preferential right over the assets of the appellant, over and above the rights of a secured creditor or similar right holders, under any recovery proceedings," the Court declared. This means that the wife and children’s right to maintenance will take precedence over any claims made by creditors, and the arrears of maintenance must be paid first, irrespective of any ongoing financial recovery actions.
The Court further stated that if the appellant failed to pay the arrears within three months, the Family Court could take coercive action, including the auctioning of the appellant’s immovable assets. The Court underscored that no creditor’s objection would be entertained when it comes to the maintenance entitlements of the wife and children, noting that their right to sustenance is paramount.
The Supreme Court also clarified that while it modified the maintenance amounts as a temporary measure, this ruling does not preclude the wife and children from approaching the Family Court under Section 127 of the CrPC to seek a further increase in the maintenance amount if they provide additional evidence of the appellant’s financial situation.
Read Order @LatestLaws.com
Picture Source :
