Wife and Children's Maintenance Rights Prevail Over Creditors' Claims Under SARFAESI/IBC on Husband's Assets: Supreme Court
The Supreme Court, in the case of Apurva @ Apurvo Bhuvanbabu Mandal v. Dolly & Ors., held that the right to maintenance for a man's wife and children takes precedence over the rights of creditors in recovery proceedings. It observed that the right to maintenance is akin to a fundamental right, flowing from Article 21 of the Constitution, and overrides statutory rights of creditors under laws such as the SARFAESI Act, 2002, and the Insolvency and Bankruptcy Code, 2016.
A bench of Justices Surya Kant and Ujjal Bhuyan directed that arrears of maintenance owed to the respondents (wife and children) shall have priority over the assets of the appellant-husband, superseding the claims of secured creditors or other similar stakeholders. Forums handling such proceedings must ensure the immediate release of maintenance arrears and reject any objections from creditors opposing this entitlement. The Court also instructed that failure to pay arrears could result in coercive action, including auctioning the appellant's immovable assets.
Initially, a Family Court awarded maintenance of ₹6,000 per month to the wife and ₹3,000 per child, which the Gujarat High Court later enhanced to ₹1 lakh per month for the wife and ₹50,000 per child, citing the appellant’s business income and adverse inference from his failure to produce income-tax documents. The Supreme Court, in 2022, issued interim relief reducing the amounts to ₹50,000 for the wife and ₹25,000 per child, citing the appellant’s claim of business setbacks.
In its final judgment, the Supreme Court modified the High Court's decision, holding that the interim amounts were "just and fair," while allowing arrears at the higher rates for the period before the High Court order. The appellant was directed to clear these arrears within three months.