Retirement corpus can’t be treated as monthly income for maintenance, Delhi High Court clarifies in matrimonial dispute

Retirement savings cannot be treated as a substitute for monthly income when courts decide maintenance claims, the Delhi High Court has clarified. While the accumulated retirement corpus may be considered when assessing a person’s overall financial resources, only the interest and other returns actually generated from investments can be counted as recurring income.

In its 8 October judgment in Meenakshi Batra v. Vijay Kumar Batra, a Division Bench of Justices Vivek Chaudhary and Renu Bhatnagar said a retired person cannot be expected to consume accumulated retirement savings simply because the corpus is substantial. However, the court also made clear that having savings does not automatically disqualify a spouse from claiming maintenance.

The ruling came while the court dismissed an appeal filed by a retired Central government teacher seeking interim maintenance from her husband, a retired Army officer, during matrimonial proceedings. The court found that the woman had sufficient independent income and financial resources to meet her reasonable needs while the proceedings were pending.

What the court said about retirement savings and investment income

The dispute arose after the Family Court in Delhi rejected the wife’s application for interim maintenance in April 2022. It had noted that both spouses were retired government employees receiving pensions and had sufficient financial resources to support themselves.

The wife challenged the order, arguing that the Family Court had treated her retirement benefits and savings as a continuing source of income without properly assessing her expenses and the husband’s financial position.

The High Court said the distinction between accumulated capital and income generated from that capital was important when assessing a maintenance claim.

“The retirement corpus is accumulated capital,” the court observed, adding that it could not be treated as monthly income merely because the amount was substantial. Interest or other recurring returns earned on investments, however, would count as income and must be considered.

The court noted that the wife had disclosed a monthly pension of around ₹35,329 and interest income of approximately ₹34,000 from investments. This took her recurring monthly income to about ₹69,000, before applicable deductions.

Her retirement benefits included general provident fund savings, gratuity, commuted pension and leave encashment. She had also disclosed investments and other savings.

The court said the retirement corpus remained relevant to the overall assessment of her financial circumstances, but could not be treated as if it were a recurring salary.

It also noted that the wife’s claimed monthly expenditure was around ₹1.16 lakh, excluding litigation expenses. However, merely stating an expenditure figure did not establish that the entire amount was necessary or that the other spouse was legally required to fund it.

Courts must assess reasonable needs, including housing, medical requirements, the parties’ age and their established standard of living, the Bench said.

Higher pension does not automatically establish entitlement to maintenance

The court also examined the husband’s financial position. His affidavit disclosed a monthly pension of approximately ₹1.09 lakh, investments worth around ₹73 lakh in shares, mutual funds and bonds, and about ₹16.50 lakh in the Public Provident Fund (PPF).

Although his pension was higher than the wife’s recurring income, the Bench said this difference alone did not establish her entitlement to maintenance. It also took into account his responsibility to support his 87-year-old dependent mother and meet her medical expenses.

The wife had alleged that her husband continued to earn from a training establishment called Colonel’s Learning Café. The court declined to attribute additional recurring income to him because the material on record did not establish that the establishment was still generating earnings.

The Bench reiterated that maintenance under Section 24 of the Hindu Marriage Act, 1955, is intended to provide reasonable support and meet necessary litigation expenses. It is not a mechanism to equalise the incomes of spouses or reimburse every expense claimed by an applicant.

At the same time, the court cautioned that savings and investments cannot, by themselves, be grounds for rejecting a maintenance claim. Their nature, the income they generate and the claimant’s reasonable needs must be considered together.

The Bench acknowledged that the Family Court’s reasoning, particularly its reliance on the spouses’ comparative incomes and retirement corpus, could not be endorsed in its entirety. However, it found no reason to overturn the final decision because the evidence did not establish that the wife lacked sufficient means for her reasonable support during the proceedings.

The High Court therefore dismissed the appeal.