In a landmark decision reinforcing the primacy of familial obligations, the Supreme Court has ruled that the maintenance rights of a man’s wife and children take precedence over creditors’ claims under business recovery laws, including the SARFAESI Act and the Insolvency and Bankruptcy Code (IBC). The Court emphasized that the right to maintenance is intrinsically linked to the right to dignity and sustenance under Article 21 of the Constitution, elevating it to a status comparable to fundamental rights.
A bench comprising Justices Surya Kant and Ujjal Bhuyan underscored the overarching nature of this right, stating, “The right to maintenance flows from the right to a dignified life, which supersedes statutory claims of secured and financial creditors.” The Court directed that arrears of maintenance owed to the man’s wife and children must be prioritized over the rights of creditors in any recovery proceedings.
Protection of Maintenance Rights
The Court ordered that forums handling such recovery processes ensure the release of maintenance arrears to the beneficiaries without allowing objections from creditors. If necessary, coercive actions, including the auctioning of immovable assets, may be undertaken to fulfill these obligations.
In this case, the appellant, a businessman owning a diamond factory, had contested the maintenance amounts previously awarded by the Gujarat High Court. The High Court had increased the maintenance for his wife to ₹1 lakh per month and ₹50,000 per month for each child, citing his substantial financial capacity. The appellant argued financial hardship due to business losses and provided income-tax documents to support his claims.
Interim Adjustments and Final Decision
In 2022, the Supreme Court had issued interim orders, reducing the maintenance amounts to ₹50,000 per month for the wife and ₹25,000 per month for each child. Acknowledging the appellant’s financial challenges while maintaining the respondents’ rights, the Court upheld these interim figures as “just and fair” for the time being. However, it directed that arrears owed at the higher High Court rates remain payable until the date of the revised interim order.
This decision highlights the judiciary’s firm stance on safeguarding the financial security and dignity of dependents in the face of competing economic claims, reaffirming that familial obligations hold a unique and protected position in the legal framework.
