In a landmark ruling, the Supreme Court of India emphasized the importance of maintenance for estranged wife and children, granting it precedence over the claims of secured, financial, and operational creditors under the Insolvency and Bankruptcy Code (IBC).
This decision underscores the constitutional right to dignity and sustenance, prioritizing family obligations even in complex insolvency proceedings.
The judgment was delivered by a bench comprising Justices Surya Kant and Ujjal Bhuyan. The court rejected the argument presented by a husband that his inability to pay arrears of interim maintenance stemmed from financial difficulties and losses in his diamond business.
Article 21 of Indian Constitution
The court directed that any pending insolvency or bankruptcy proceedings must ensure that arrears of maintenance are released immediately to the beneficiaries.
This decision reflects the court’s recognition of maintenance as an essential component of the fundamental right to dignity under Article 21 of the Indian Constitution.
The bench highlighted that the right to maintenance is intrinsically linked to the right to sustenance and a dignified life. It argued that such a right holds a superior position to statutory claims made by creditors within the IBC’s framework.
To ensure compliance with the ruling, the court authorized family courts to take strict action against defaulting husbands. This includes the auctioning of immovable assets if necessary to recover the arrears of maintenance. The decision aims to protect the financial well-being of estranged spouses and children, even when the husband faces insolvency proceedings.
Background of the case
The case originated from a Gujarat High Court order that had directed the husband to pay monthly maintenance of Rs 1 lakh to his estranged wife and Rs 50,000 each to their two children.
In November 2022, the Supreme Court modified this order, reducing the interim maintenance to Rs 50,000 for the wife and Rs 25,000 for each child. Despite this adjustment, the wife presented evidence that her husband continued to misrepresent his financial status. He was found to be paying significant installments for a home loan while claiming a meager annual income, highlighting the need for strict enforcement of maintenance obligations.
The judgment sets a crucial precedent by affirming that the right to maintenance is paramount, even in the face of competing claims from creditors under insolvency laws.
