Maintenance Right Of Wife & Children Overrides Creditors' Claims Under SARFAESI/IBC On Husband's Assets : Supreme Court

While giving precedence to the maintenance rights of a man's wife and children over the rights of creditors under recovery proceedings, the Supreme Court recently observed that right to maintenance is equivalent to a fundamental right and shall have an overriding effect over statutory rights of creditors, etc. under business laws."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", said a bench of Justices Surya Kant and Ujjal Bhuyan.The Court directed that the charge of arrears of maintenance payable to respondents (wife and children) shall have preferential right over the assets of the appellant-husband, over and above the rights of a secured creditor or similar right holders under any recovery proceedings.It added that wherever such proceedings are pending, the concerned forum shall ensure that the arrears of maintenance are released to the respondents forthwith and no objection/claim of any creditor, etc. is entertained opposing the entitlement of the respondents for maintenance.In addition, the order mentioned that if the appellant fails to pay the arrears of maintenance, the Family Court shall take coercive action against him. If required, his immovable assets can also be auctioned for the purpose of recovery of arrears of maintenance.Briefly put, a Family Court had initially awarded maintenance of Rs.6,000/- per month to the respondent-wife and Rs.3,000/- per month to each of the children. In appeal, the Gujarat High Court enhanced the amounts, granting the respondent-wife maintenance @ Rs.1 lakh per month and the two children @ Rs.50,000/- each per month.The High Court accepted the respondents' claims and enhanced the sums noting that the appellant is a businessman, who owns a diamond factory. Further, it drew an adverse inference against him as he failed to produce income-tax documents, despite a direction to that effect.Before the Supreme Court, the appellant placed his income-tax returns and claimed inability to pay maintenance at the rate awarded by the High Court. In 2022, the top Court issued interim directions, reducing the amount of maintenance as follows: the respondent-wife was to be paid Rs.50,000/- per month and the children were to be paid @ Rs.25,000/- per month from the date of the High Court order.In due course, the appellant asserted that due to certain setbacks suffered in business, he was not in a position to pay maintenance at the rate awarded by the High Court.Considering that maintenance was awarded by the High Court under Section 125 CrPC, and the appellant's claim of business losses was a question of fact, the Supreme Court opined that as of now, interim maintenance (as directed to be paid in 2022) will be "just and fair" for the sustenance of the respondents."we allow these appeals in part and modify the impugned judgment of the High Court to the extent that the respondent-wife is held entitled to maintenance at the rate of Rs.50,000/- per month from the date of the order passed by the High Court. Similarly, both the children are also held entitled to maintenance at the rate of Rs.25,000/- per month, each with effect from the date of the High Court order. They shall, however, be entitled to arrears of maintenance at the higher rate, awarded by the High Court upto the date the said order was passed by the High Court", the order said.The appellant was directed to pay the arrears within 3 months.Case Title: APURVA @ APURVO BHUVANBABU MANDAL Versus DOLLY & ORS., CRIMINAL APPEAL Nos.5148-5149 OF 2024Citation : 2024 LiveLaw (SC) 977Click here to read the order

Maintenance Right Of Wife & Children Overrides Creditors' Claims Under SARFAESI/IBC On Husband's Assets : Supreme Court

Debby Jain

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Maintenance Right Of Wife & Children Overrides Creditors' Claims Under SARFAESI/IBC On Husband's Assets : Supreme Court

Debby Jain

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