Mumbai, Nov 20: Expressing displeasure over misuse of insolvency proceedings, the Bombay High Court on Thursday rejected a suburban Mumbai dance teacher’s attempt to declare himself insolvent to avoid paying maintenance to his estranged wife.
Calling the move an improper effort to “frustrate” a valid Family Court order, the court said the Insolvency Act “cannot be used as a tool to do indirectly what is not permissible directly”.
Man Sought Insolvency to Stall ₹25,000 Monthly Maintenance Order
The man had approached the court under Section 14 of the Presidency-Towns Insolvency Act, 1909, seeking to be declared insolvent and to stay a May 17, 2021 Family Court order directing him to pay Rs25,000 per month as maintenance.
The couple married in January 2014 but separated barely two months later, triggering a long legal battle. He claimed his monthly income was only Rs 12,000–15,000 and said he was unable to pay arrears of Rs 22.3 lakh. Relying on Sections 14(1)(a), 9(1)(f) and the Explanation to Section 10 of the Insolvency Act, he argued that once “debts exceed Rs500”, the court must declare him insolvent.
HC: Insolvency Threshold Does Not Mean Automatic Declaration
Justice Jitendra Jain rejected this interpretation outright, underscoring that Section 14 only fixes the threshold for filing a petition. “Merely because the debts are more than Rs 500, it does not mean that automatically on a petition being filed, the Court has no option but to declare the petitioner as an insolvent,” the court said.
The court further emphasised that explanation in the Act says “the court ‘may’ make an order” of insolvency, which shows that the adjudication is discretionary, not mandatory.
The husband has also challenged the maintenance order before the high court in a revision petition, which is pending hearing.
Justice Jain noted that granting relief in insolvency plea would effectively mean pre-judging that revision. “The Insolvency Act cannot be abused to seek stay of the Family Court order… This Court cannot be used as a tool to do indirectly what is not permissible directly,” the order warned.
Maintenance Is Not a Debt, Says Court
The judge also ruled that maintenance is not a “debt”, relying on a Mysore High Court ruling that such payments stem from “a moral duty”. Since the Family Court order is under challenge, even this alleged liability has not attained finality.
Questioning why the petitioner approached the insolvency court only in 2023—two years after the order—the court said he was attempting to “stall” compliance. Allowing such use of insolvency provisions would “embolden the debtor to escape liability”.
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The order ended with a reflective note on the disproportionate litigation: “2 months of marriage union; 120 months of litigation for division… Would it not be better to amicably resolve the dispute… save the balance period from mental pain.” The petition was dismissed.
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