Right To Maintenance Of Wife, Children Overrides Effects On Other Claimants Under IBC: SC

A bench of Justices Surya Kant and Ujjal Bhuyan has stated that right to maintenance is equivalent to a fundamental right.

New Delhi:The Supreme Court has said that the right to maintenance of wife and children is commensurate with the right to sustenance and this right is a subset of the right to dignity and a dignified life, which in turn flows from Article 21 of the Constitution.

A bench of Justices Surya Kant and Ujjal Bhuyan said: “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”

The bench said the right to maintenance of wife and children would have overriding effects over claimants in any recovery proceedings under the SARFAESI Act and IBC Code. “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 the bench, in an order passed on December 10.

The apex court rejected a plea by a man, who owns a diamond factory. The appellant contended that he has suffered losses in business and his income has substantially reduced and faced recovery proceedings. The appellant contended that he was not in position to pay the maintenance of Rs one lakh to the wife and Rs 50,000 each to two children as fixed by the Gujarat High Court.

The bench directed the appellant man to pay the maintenance sum of Rs 50,000 to the wife and Rs 25,000 each to the children per its order passed on November 7, 2022. “Taking into consideration the totality of the circumstances, we are of the view that the tentative maintenance, as granted by us vide order dated 07.11.2022, will be just and fair, as of now, for the sustenance of the respondents”, said the bench.

The bench modified the high court's order but directed him to pay the arrear within three months.

“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”, said the bench.

“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”, said the bench.

The bench said 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.

The bench said the appellant is directed to pay the arrears of maintenance within a period of three months. “In this regard, we direct that the charge of arrears of maintenance, payable to the respondents, shall have 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”, said the bench.

“Wherever such proceedings are pending, that forum is directed to ensure that the arrears of maintenance are released to the respondents forthwith. No objection of any secured creditor, operational creditor or any other claim shall be entertained opposing the entitlement of the respondents for maintenance”, added the bench.