“Supreme Court Prioritizes Wife and Children’s Maintenance Over Creditors’ Claims.”
December 12, 2024 2025-03-02 12:45“Supreme Court Prioritizes Wife and Children’s Maintenance Over Creditors’ Claims.”
“Supreme Court Prioritizes Wife and Children’s Maintenance Over Creditors’ Claims.”
By Niyati Dhiman
In a landmark decision, the Supreme Court recently upheld that the right to maintenance for a wife and children holds precedence over the claims of creditors under various business laws, such as the Insolvency and Bankruptcy Code, 2016, and the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. A bench of Justices Surya Kant and Ujjal Bhuyan asserted that the right to maintenance is integral to the right to sustenance and dignity, which stems from Article 21 of the Constitution of India. The Court emphasized that this fundamental right takes precedence over the statutory rights of financial, secured, or operational creditors.
The case involved an appeal by a businessman, the appellant-husband, whose wife and children were awarded maintenance by the Family Court. Initially, the Family Court had granted the wife Rs. 6,000 per month and the children Rs. 3,000 each per month. On appeal, the Gujarat High Court raised these amounts significantly, awarding the wife Rs. 1 lakh per month and Rs. 50,000 per child. The High Court’s decision was based on the appellant’s failure to provide adequate evidence of his income, despite being a businessman who owned a diamond factory.
The appellant challenged the High Court’s decision before the Supreme Court, presenting his income-tax returns and claiming that he could not afford the enhanced maintenance due to business setbacks. The Supreme Court issued interim directions in 2022, reducing the maintenance to Rs. 50,000 per month for the wife and Rs. 25,000 per month for each child, which it deemed fair for their sustenance. The appellant’s claim of business losses was considered a factual issue, and the Court upheld the interim maintenance arrangement as just and fair.
The Supreme Court ultimately allowed the appeals in part, modifying the High Court’s judgment to maintain the reduced maintenance amounts of Rs. 50,000 for the wife and Rs. 25,000 each for the children, effective from the date of the High Court’s order. However, the appellant was ordered to pay arrears at the higher rate granted by the High Court up to the date of the judgment. The appellant was also directed to pay the arrears within three months.
The Court further ruled that the arrears of maintenance would have a preferential claim over the appellant’s assets, superseding the claims of any creditors. If the appellant fails to make the payment, coercive actions, including the potential auction of his immovable assets, could be pursued for recovery.
Case Title: Apurva Vs. Dolly and Ors.
Citation: MANU/SCOR/137549/2024
