Apex Court Affirms Priority Of Maintenance Claim Over That Of Creditors; Declares Maintenance A Fundamental Right

The Supreme Court has held that the right to maintenance for a wife and children is equivalent to a fundamental right and shall take precedence over the claims of creditors in proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, the Insolvency and Bankruptcy Code, 2016 or similar such laws.

The Bench of Justice Surya Kant and Justice Ujjal Bhuyan emphasized that the right to maintenance is an extension of the right to dignity and sustenance under Article 21 of the Constitution.

“The right to maintenance is commensurate to the right to sustenance. This right is a subset of the right to dignity and a 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 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,” the Court held.

Senior Advocate Meenakshi Arora appeared for the appellant, and AOR Samar Vijay Singh appeared for the respondent. 

The case originated from a Gujarat Family Court order granting the respondent-wife Rs. 6,000 per month and Rs. 3,000 per month to each of the children as maintenance. Dissatisfied, the wife and children approached the Gujarat High Court, which enhanced the maintenance to Rs. 1,00,000 per month for the wife and Rs. 50,000 per month for each child.

The Gujarat High Court had relied on the appellant’s financial status as a businessman owning a diamond factory and drew adverse inferences due to his failure to produce income-tax documents despite specific directions. The Appellant challenged the High Court's order in the Supreme Court, citing financial difficulties and presenting income-tax returns to support his claim of inability to pay the enhanced maintenance.

Earlier, in 2022, the Supreme Court had granted interim relief, reducing the maintenance to Rs. 50,000 per month for the wife and Rs. 25,000 per month for each child. The Court later modified the High Court's order, holding that this reduced maintenance amount was “just and fair” given the circumstances.

The Court ruled that the reduced maintenance would apply from the date of the High Court's order, while arrears of maintenance at the higher rate granted by the High Court would still be payable for the period before the modification. The appellant was given three months to clear the arrears.

The Court directed that arrears of maintenance owed to the respondent-wife and children shall have a preferential claim over the appellant-husband’s assets, superseding the rights of secured creditors or others in recovery proceedings. It mandated forums handling such proceedings to ensure the immediate release of maintenance arrears to the dependents and to disregard objections or claims from creditors opposing this entitlement.

The Court further directed that if the appellant fails to pay the arrears, the Family Court may take coercive action, including auctioning the appellant’s immovable assets to recover the outstanding maintenance. "In case the appellant fails to pay the arrears of maintenance to the respondents, the Family Court shall take coercive action against the appellant and, if so required, may auction the immovable assets for the purpose of recovery of arrears of maintenance," the Court said. 

The Bench added, "This order shall not be construed such that the enhanced amount of maintenance awarded by the High Court is perceived to be totally erroneous. The view taken by us is only in light of the fact that there was no proper documentary evidence before the High Court to assess the income of the appellant, and as noticed earlier, it may not be prudent to entertain such documents at one end. That being so, nothing precludes the respondent-wife or the children to approach the Court under Section 127 Cr.P.C. to seek suitable amendment in the grant of maintenance, provided they are able to produce some evidence/particulars of the income of the appellant."

Cause Title: Apurva@ Apurvo Bhuvanbabu Mandal v. Dolly & Ors. [Special Leave to Appeal (Crl.) No(s).10093-10094/2022]

Appearance:-

Appellant: Senior Advocate Meenakshi Arora, Advocates Krishnagopal Abhay, Chandratanay Chaube, Pari Bharadwaj, Anita Kanungo (AOR)

Respondent: Advocates Samar Vijay Singh (AOR), Sabarni Som, Keshav Mittal, Fateh Singh, Sukhdev Sharma, Abhishek Kumar Suman, Nepal Singh, Swati Ghildiyal (AOR), Rajat Nair, Devyani Bhatt, Sneha Menon

Click here to read/download the Order