Husband can't use bankruptcy to skip maintenance; wife, child to have first claim over creditors: Supreme Court

New Delhi: The Supreme Court has said the right to maintenance of wife and children, being equivalent to fundamental right, would be superior to and have overriding effects over claimants in any recovery proceedings under the SARFAESI Act and IBC Code.

A bench of Justices Surya Kant and Ujjal Bhuyan rejected a plea by a man, owner of diamond factory, contending that he has suffered setbacks in business and faced recovery proceedings, so he was not in position to pay the maintenance of Rs 1 lakh to the wife and Rs 50,000 each to two children as fixed by the Gujarat High Court.

"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 in its order on December 10.

The court further said, in a way, the right to maintenance being equivalent to a fundamental right will be superior to and have an 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 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 month as determined on November 7, 2022, finding it as just and fair.

It modified the High Court's order but directed him to pay the arrear within three months.

The bench, however, allowed the wife and children to approach the court under Section 127 CrPC to seek suitable amendment in the grant of maintenance, if they are able to produce some evidence of the income of the appellant.

"We direct that the charge of arrears of maintenance, payable to the respondents (wife and children), 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," the bench said.

The court further ordered 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 would be entertained opposing the entitlement of the respondents for maintenance, the bench added.

The court said this order should not be construed such that the enhanced amount of maintenance awarded by the High Court was perceived to be totally erroneous.

The bench said the view taken by it was only in light of the fact that there was no proper documentary evidence before the High Court to assess the income of the appellant who failed to produce the Income Tax documents.