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Law

Is India Ready For Pre-Nuptial Agreements?

Though prenuptial agreements are not legally tenable in India, there is rising popularity for the same among a small section of society.

By - Ritika Jain | 15 Nov 2023 5:01 AM GMT

Of late, there is a small section of the society that is increasingly looking towards prenuptial agreements to protect their assets. Experts observe that the trend is rising in cases of inter-country marriages, among the wealthy, where there is a great economic divide among the spouses and those who have had more than one marriage.

Though Indian laws do not recognize prenuptial agreements, or ‘prenups’, a Delhi Court recently observed that it is time to make it compulsory. “The time has come to make compulsory a prenuptial agreement be executed before the appointed authority after counselling of parties about the possible risk of marriage going haywire for a variety of reasons,” family court judge Harish Kumar said while granting a divorce to a couple who had tied the knot in 2011.

A Mumbai court pointed out that though prenups are not enforceable it would help in gauging the couples’ intent at the time of divorce.

Since 2015, BJP leader Maneka Gandhi has mooted the idea to legalise prenups at least twice. However, the complete silence and inaction from the government suggest that the idea does not seem to have found favour.

“The wealthy, people marrying out of status, those tying the knot more than once, or couples where there is income/wealth inequality between them are opting for prenuptial agreements,” senior advocate Geeta Luthra said. “Most of the prenups I have drafted are those who are marrying second or third time,” she added.

Even though prenups in India are not legally tenable, it has persuasive value and a court may consider them during divorce proceedings.

“At present, the concept of prenups is itself very nascent, underdeveloped, and perhaps controversial. Except Goa which enforces a uniform Goa Civil Code, 1867, providing different regimes for division of assets akin to the western nations, there is a complete legislative vacuum around this idea,” advocate Shivani Luthra said.

What are prenups?

Pre-nuptial agreements (or prenups) are popular contractual agreements in the West where couples before they marry, decide on the ownership of their respective assets in case their marriage fails. For example, in the United State of America (USA), the state of Washington is recognized as a “community property state” where all assets and debts accrued during a marriage is considered to be equally owned by a couple unless there’s a prenup with specific terms and conditions.

Will it work in India?

There are several reasons why prenups may not work in India. Personal laws, considering marriages sacred, and lack of ‘community property’ laws are a few of the reasons that stand in the way of prenups.

“Marriages are considered as social events. Marriage is cohesive in our society as compared to other Western countries. Acceptability of prenup is difficult and it will not really work, because our societal structures are different from Western countries,” advocate Saudamini Sharma said.

“We still have women who are dependent on their families – especially rural areas,” she said adding, “In one fell swoop, you will negate all welfare rights of a spouse.”

Apart from this, experts point out that the urban-rural divide in economic means, education, and acceptance of change in societal values are also important factors that may prove to be detrimental to the idea of prenuptial agreements.

“It ultimately boils down to illiteracy and lack of education,” advocate Sarah Kapadia said. “We are not looking at India that is highly educated – that’s a small percentage. There is also a large disparity between urban and rural. They wouldn’t know what they are signing before getting married,” she added.

“The strata that one is proposing a prenup for is a minority of a minority – the 1%,” Kapadia told BOOM.

“Indian society still holds marriages in high regard. It is considered sacred, and this is reflected in the marriage laws prevalent here,” advocate Sharma told BOOM. “Apart from that, personal laws governing marriages/divorces and the fact that we don’t have the concept for ‘community property’ also makes it difficult to impose prenups here,” Sharma added.

“The huge socio-economic divide, gender discrimination, and rampant dowry in rural areas further exacerbate the situation,” Shivani Luthra said. “There is no “settled or codified law that either permits or prohibits the execution of prenuptial agreements before marriage,” she added.

However, experts have pointed out that a couple may draft one which the courts may simply consider during divorce proceedings. “In an arranged marriage set up it will create a lot of angst and distrust, however, in a non-arranged marriage set up it could still work,” Geeta Luthra said. “You are going from the presumption that women are in a position with equal bargaining power when they get married,” she added.

“Marriages are sacred, but Memorandum of Understanding (MOUs) can still be done,” Geeta Luthra said adding that it may protect only in cases where there may be fraud.

Sharma’s point echoed Luthra’s when she said that a strong prenup also depends on one’s negotiation skills. “In a patriarchal society like ours, it may prove one-sided,” she added. We can’t have a scenario where one side holds all the cards. It will prove detrimental to the progress in women’s rights,” Sharma said.

“Our divorce laws have finally been streamlined after so many years. If we have prenups, it will overturn everything,” Sharma added.

Kapadia said prenups may act “detrimental” for women – especially, as it will be protecting the man’s assets in this day and age.

“It is very nuanced, and one must consider the social welfare conditions of our country. And the legislation in play for women,” she added.

Personal laws versus contract laws

Personal laws governing marriages and divorces are the biggest stumbling blocks for the consideration or legality of prenups in India.

Marriages and divorces in India are governed by personal laws. But unions registered under the Special Marriage Act may be exceptions or in Goa where the state recognizes civil marriages and not personal laws.

The personal laws dictate principles related to marriage, divorce, maintenance, adoption, inheritance, guardianship, succession, etc.

So even if a couple drafts a prenup, it is not legally enforceable because section 23 of the Indian Contract Act (ICA), 1872 invalidates it. The ICA nullifies any contract that opposes public policy or where a party has signed away their rights that is ensured to them under personal laws. Furthermore, agreements that contemplate separation from a marriage are considered against public policy.

Thus, any contract governing marriages in India is considered against public policy, and hence illegal.

The government is not looking at marriage as a contract. We cannot have an agreement that is contrary to law. For example, if a prenup stipulates that a wife should not be given alimony and she needs it, then such a contract is untenable, Sharma said.

Hindu Marriage Act, 1955; Indian Christian Marriage Act, 1872; Parsi Marriage and Divorce Act, 1939 are personal laws that don’t allow for contracts between couples.

Islam considers marriages as contracts. A “mehr”—a sum of money or property—is fixed at the time of nikah, which a wife will get in case the marriage fails or if her husband dies.

There is scope for the registration of a prenuptial agreement under the Special Marriage Act since it is essentially a registered marriage.

No concept of matrimonial property under Indian family law

Matrimonial laws don’t consider the division of spousal assets. Since India does not even have the concept of community property, the concept of division of assets does not apply. In India, transfer of property – (i) sale, (ii) mortgage, (iii) lease (iv) exchange, and (v) gift – are governed by the Transfer of Property Act.

“The rights that arise out of a marriage are two-fold: religion-based personal laws and religion-neutral general laws which provide for welfare to parties at the time of divorce,” Sharma said. Religion-neutral laws include the Domestic Violence Act, the Indian Penal Code, and the Code of Criminal Procedure include rights for aggrieved parties seeking rights arising from a divorce.

“In India consider maintenance, residence, and alimony. There are no rules or laws on assets. As we speak, there is no provision in the law as we speak for proportionate division of assets,” Geeta Luthra said.

“In India, we don’t have an idea for ‘community property’ which if owned by one person, the other partner can ask for it. The only rights that arise in a matrimonial dispute are rights that flow from the matrimony. Maintenance, the duty of the husband to provide wife at the same status at the time of marriage, inheritance rights,” advocate Saudamini Sharma said.

Under Section 27, Hindu Marriage Act 1955 property owned jointly by a husband and a wife will be settled during divorce proceedings. However, the law does not take in account property that is individually owned by a husband or a wife.

Divorce laws provide for alimony or maintenance to either spouse as a statutory right in the event of the breakdown of a marriage. Courts may consider personal net worth including assets from trusts, and companies while fixing alimony to either spouse during divorce proceedings. This will also include maintenance for minor children born in wedlock.

The rising popularity of prenups

Shivani Luthra said that despite the anti-prenup legal system, off-late prenups have become more popular among the urban population in metropolitan cities like Delhi and Mumbai.

“Many come to us that say we want prenups, but they work more as MOUs. When presented before a judge, they may consider it but will also factor in that the agreement was from a time when a couple was more agreeable,” advocate Sarah Kapadia said.

“But circumstances may change at the time of when a couple is going through a divorce,” Kapadia, partner with Vesta Legal said.

“In fact, it has been reported that a Family Court in Bombay recently in October 2023 held that although a prenup is unenforceable, it is indicative of the parties' intent before marriage. Likewise, a Family Court in Delhi also held that prenups should be mandatory after counseling of parties seeking divorce by mutual consent,” Luthra added.

“Hence, keeping up with the judicial penmanship and considering the mushrooming divorce rates in India, the legislature must break the legislative silence and accelerate the snail-paced growth of this unexplored concept at the earliest,” Shivani Luthra said.