What factors determine fair alimony? Latest SC ruling on divorce explained

The Supreme Court's recent ruling in the Rajnesh vs Neha case outlines eight key factors that determine alimony, focusing on financial capacity, standard of living, and the welfare of children.

Atul Subhash, a 34-year-old deputy general manager at a private firm, died by suicide on December 9,  and accused his wife of filing nine cases against him, including allegations of murder, domestic violence, dowry harassment, and financial exploitation.  Recently, the Supreme Court issued an important ruling in a separate alimony case, laying out eight factors to determine fair maintenance. These factors include the financial position of the parties, the standard of living, and the duration of the marriage, among others, to guide decisions on spousal support.

 

"The Bengaluru Techie Suicide Case has thrown much needed light and directives urgently required in the ambit of Matrimonial disputes, especially in context of Permanent Alimony. The Supreme Court reiterated the principles laid down in Rajnesh v. Neha (2021) and subsequent judgments, underscoring the importance of considering the lifestyle, financial needs, and earning capacity of the spouse," said Advocate Anshuman Singh, AOR, Patna High Court.

 

 

The case involving the banker, who is now the CEO of a Dubai-based bank, is a prime example of the complexities surrounding alimony disputes. The legal battle began in 2004 when the banker filed for divorce on grounds of cruelty, while his wife filed a petition under Section 24 of the Hindu Marriage Act for alimony. For the next 20 years, the case moved through various courts, including the family court, high court, and the Supreme Court, with the primary issue being the alimony amount.

 

In 2015, the banker, adhering to the judgments passed by various courts, voluntarily agreed to increase the alimony amount. However, the situation became more complicated when his wife demanded an even higher alimony amount. Her demand was based on Section 26 of the Hindu Marriage Act, which allows for the maintenance of adult children in certain circumstances. In this case, the wife argued that their adult son, who had recently completed his Bachelor's degree, was still dependent and needed financial support, along with her own.

 

The banker’s primary point of contention was the application of Section 26 of the Hindu Marriage Act, which he believed was being misused by his wife to demand a higher amount. Despite his compliance with earlier judgments and his willingness to adjust the alimony, he fought back against the idea of continuing to increase the amount indefinitely, especially considering his financial position and his obligations as a father.

 

Since this family dispute became a question of law, the case was heard by the Honourable Supreme Court. Justices Vikram Nath and Prasanna B. Varale heard the case and analysed its details and took the existing law into consideration. The Supreme Court then laid out eight factors which can be used to decide whether alimony payment is required to be paid and if required then how much.

 

 Rishi Sehgal, Advocate On Record, Supreme Court of India, lays down the conditions

 

1. Status of the parties, social and financial. 

 

2. Standard of life enjoyed by the wife in the matrimonial home. 

 

Under this head, the court will have to assess the social standing, lifestyle, and financial resources, which may include, number and value of properties owned; number and value of cars owned; size of the properties owned, number of air conditioners and other facilities available at the house like swimming pool, etc., number of house help, how often the parties used to go on vacations – whether in India and abroad, etc. 

 

If the couple was part of a high-society family, having all luxuries of life, the alimony might be higher since the wife is entitled to maintain the same lifestyle as the husband.

 

In alimony cases, both parties' societal and financial status are key factors in determining a fair amount. Courts often set alimony to ensure the wife maintains a similar standard of living to her husband, considering factors like age, education, and earning ability, especially if she is unemployed.

 

3. Reasonable needs of the wife and the dependent children. 

Though, the wife, is undoubtedly entitled to maintain the same standard of living she enjoyed during the marriage, it is imperative that her claims remain reasonable.  

There is no dispute regarding the fulfillment of her basic needs, including sustenance, shelter, healthcare, and education. However, the Court must also ensure that her demands are not unreasonable. 

For instance, if the husband owns three cars, it would be unreasonable for the wife to demand 3 cars for herself. While she is entitled to a comparable lifestyle, this does not necessarily translate to identical possessions.

 

In alimony and child custody cases, Singh said the court places significant importance on the basic and long-term needs of the wife and children. The welfare of the children is always a top priority. While it is commonly believed that mothers have a stronger position in child custody battles, courts in India have, in several cases, granted custody to the father when circumstances warranted it. For example, in the case of L. Babubhai Desai vs State of Gujarat, the Gujarat High Court awarded custody to the father, considering the children's affection and emotional bond with him, despite their lack of attachment to their mother.

 

The Supreme Court has emphasized that child custody and alimony decisions must strike a balance between the rights of both parents and the welfare of the child. Factors such as the child’s emotional well-being, health, education, intellectual growth, and overall environment are crucial in these decisions. The child’s living expenses, including food, clothing, medical care, education, and any additional learning support like coaching classes or vocational training, are considered when determining child support.

 

Similarly, the wife's expenses—such as food, accommodation, and potential medical costs—are also taken into account when determining the alimony she should receive. The overall goal is to ensure that both the wife and children are supported in a manner that maintains their standard of living, without unduly burdening the financial capacity of the paying spouse.

 

4. Parties’ individual qualifications and employment statuses. 

 

The education, skills, and employment status of both spouses play a crucial role in determining alimony. The Rajnesh vs Neha case highlighted that in long marriages, if a wife is educated but had to give up her career to care for the family, this should be considered when deciding alimony. In modern society, a wife may need retraining to re-enter the workforce after a long absence, especially as she ages, making it more challenging to secure a job.

 

The education, skills, and employment status of both spouses play a crucial role in determining alimony. The Rajnesh vs Neha case highlighted that in long marriages, if a wife is educated but had to give up her career to care for the family, this should be considered when deciding alimony. In modern society, a wife may need retraining to re-enter the workforce after a long absence, especially as she ages, making it more challenging to secure a job.

 

Singh cites several other cases to further emphasize these principles. For instance, in Kavita Prasad vs Ram Ashray Prasad, the Delhi High Court granted conditional maintenance to a wife with an MBBS qualification, requiring her to work for free in a public welfare institute. In contrast, the Archana Gupta vs Rajeev Gupta case denied maintenance as the wife was educated but unemployed and didn't prove she couldn't support herself. In Padmaja Sharma vs Ratan Lal Sharma, the Supreme Court held that both spouses should contribute to the child's maintenance in proportion to their income.

 

Other cases, such as Sanjay Bharadwaj vs The State, and Bhushan Kumar Meen vs Mansi Meen, show that a husband's financial obligations can be reduced based on factors like his own financial commitments (e.g., EMIs) or the wife's qualifications and ability to earn. Similarly, in Deepak Shrivastava vs Smt. Jyoti Shrivastava, the MP High Court denied interim maintenance to a wife who was capable of earning but awarded her legal expenses.

 

5. Any employment sacrifices made for the family responsibilities

If the wife is highly qualified and is currently earning a sufficient amount to maintain herself, then court will have to consider her earning while fixing the alimony. However, if the wife is qualified and not working/ had to leave her job, especially because of circumstances created by husband and his family then the court may even quantify such loss of earning, while deciding the alimony.

 

6. Independent income or assets owned by the applicant. 

Though personal income/ liabilities of the wife/ husband majority determine the amount of alimony, however, if the wife or the husband have interest/ share in the family property, it may also be considered by the court.

If the wife is earning from the family properties or is due to inherit amount/ property through her family, then the court may also take the same into consideration while fixing alimony. 

 

In the Rajnesh vs Neha case, the Supreme Court established a new procedure for determining alimony in India. It introduced the requirement for both parties to submit an "Affidavit of Disclosure of Assets and Liabilities" during maintenance proceedings. This affidavit ensures transparency regarding the income and assets of both spouses, making it harder for either party to manipulate or exaggerate financial details.

 

The Court also clarified that the duration of the marriage should be considered when determining alimony. Permanent alimony may not be appropriate in short marriages, as it could be unfair to require one spouse to support the other for life if the marriage was brief.

 

The Court emphasized that there is no fixed formula for determining alimony amounts. The primary goal of alimony is to ensure the dependent spouse is not left destitute after the marriage ends, not to punish the other spouse. Factors like the financial status of both spouses, the applicant's needs, educational qualifications, and employment history are all relevant. The Court will also consider whether the applicant sacrificed career opportunities to care for the family.

 

Importantly, the financial situation of the applicant's family is not relevant when calculating alimony. If a spouse has no income, they can claim maintenance, regardless of their education or potential to earn. The husband's financial situation, including his income, expenses, and obligations, will also be considered.

 

The Court stresses that alimony should be a fair amount. It should neither be so high that it is a burden on the paying spouse nor so low that the recipient spouse cannot maintain a reasonable standard of living. The amount should help the spouse live with some comfort without causing financial hardship to the paying spouse.

 

7. Reasonable litigation costs for a non-working wife. 

The Courts in all cases invariably grants ad hoc litigation costs to the wife in family matters, however the wife is also entitled to the complete cost incurred by her for fighting the cases. This is generally granted at the time of final judgment, upon proof of payment thereof.

 

"Provisions for a non-working wife’s legal expenses are factored into the alimony. This is justifiable as often the legal costs can become excruciatingly expensive in prolonged litigation as well as where there are multiplicity of proceedings pending between the parties," said Singh.

 

8. Financial capacity of the husband, his income, maintenance obligations, and liabilities

The Courts have repeatedly held that a husband is duty bound to maintain his wife and give her the same standard of living as she enjoyed at the relevant time, as per his financial capacity. Both the income/ assets and liabilities of the husband are assessed by the court on the basis of self declaration made on oath -punishable if found to be wrong.

If the husband earns 100 rupees, the wife will not be entitled to alimony according to the said amount – all his liabilities, like, expenses on dependents -parents, EMIs, etc., will have to be assessed, while considering the alimony.

 

"The husband’s income, liabilities, and dependents are also considered. Education expenses of the children must be normally borne by the father. If the wife is working and earning sufficiently, the expenses may be shared proportionately between the parties," said Singh. 

 

The Courts have also repeatedly held that there cannot be any straight jacket formula and each case has to be decided on its own facts, though the above may act as guiding principles for determining alimony and maintenance.