Prenups In India: A Way Out Of Acrimonious Courtroom Battles And Bitter Divorces

Published on 25 Oct 2016 by Team

Pre-Nuptial Agreement as an instrument is certainly more popular in the west and rather obscure or unheard of in India, yet it could in some situations help avoid financial disputes and trauma at the time of separation or divorce as things can get messy without clarity of terms.

In India, prenups can come with some stigma attached. A marriage is treated as a religious bond between husband and wife and is not per se recognised by the Courts easily as marriage is considered holy and not a contract. Alternatively, India has a relatively conservative stance on separation or divorce and at the time of marriage, no party ever ties the nuptial knot with half a thought given remotely to even think about the marriage falling apart in the future. Hence prenuptial agreements don't find social acceptance.

Pre-Nuptial Agreement- Just another Contract

A Prenuptial Agreement is a contract between two individuals who are about to get married which like any other contract has to be signed, registered and notarized to have a binding effect. Prenuptial agreement is a contract has to be governed by the Indian Contract Act and have as much sanctity as any other contract, oral or written.

The Indian courts take cognisance of a prenuptial agreement if both the parties mutually agree to it and sign it voluntarily, without any undue influence, force or threat. It must be reiterated again that the agreement should be fair, clearly stating the division of property, personal possessions and financial assets of the parties, and should be certified by a separate lawyer for each. You can talk to the best family lawyers in India to know more about the sanctity of prenuptial agreements in India.

Law governing marriages & divorce- moving towards clarity and standardisation

The trends in Family law especially laws related to Hindu Marriages are witnessing changes. The central government in effect accepted the Law Commission’s recent recommendation to make marriage registration mandatory for couples of all communities across the country. In a report submitted to the law ministry on July 4, 2017, the commission pushed for compulsory registration of marriage within 30 days of the wedding, proposing a fine of Rs 5 per day for any delays after that. 

Even more recently The Supreme Court ruled that the stipulation under the Hindu Marriage Act for a six-month wait could be done away with if all efforts for mediation and conciliation intended to reunite the parties had failed. The waiving off can be considered if the parties had already lived separately for at least a year. In such situations, the court could take a view that delay in proceedings will only prolong subsequent resettlement.

Terms to be included in a Pre-Nup 

Alimony, support, and maintenance

The last development towards making Pre-nuptial Agreements recognized in Indian Courts per se was a move in 2015 by Maneka Gandhi, Union Minister for Women and Child Development called for a consultation on making prenuptial agreements recognised by law in Indian Courts. Among those who have been invited for the consultation are former solicitor general Indira Jaising, representatives from law schools in Bangalore and Delhi, NGOs like Jagori and Action India.

The move is primarily to address the most serious aspect of a Prenuptial Contract in the Indian context - Alimony, support, and maintenance. Legalisation and recognition of Prenuptial agreements in Indian Courts are sought to protect the interests of women who are in live-in relationships or marriage. The best family law advocates in India can help you understand the concept of prenuptial agreements in India in detail.

The intention is that in the event that the marriage gets into trouble, a woman should be able to get financial support without going through a lengthy, expensive process of divorce which may act as a drain on her resources and she may not end up with anything.
Hence what can be said to be the most important clause in the agreement, in the context of Indian society has to clarify who pays whom upon any divorce, and how much. The clause can prove to be pivotal in empowering women in India if given a blanket binding effect on it. Nevertheless, it may be enforceable as a contract with standard procedures being followed like signatures of the couple on the document and registering the same with witnesses as per the Indian Contract Act.

This particular clause must take into account certain facts related to the earnings of the couple independently and how much they are contributing to the marriage in terms of work and financially. Alternatively how much a non earning spouse is sacrificing on a good chance for making money or letting the next best working opportunity pass by to put in the desired time at home or to commitments related to the marriage. Further, it could also be clarified as to what will be the situation when the party to the marriage who is not earning now starts to earn in future or the one who is earning stops earning.

Treatment of Separate Property

1. Separate property- everything a husband and wife own separately. The parties to a solemnised marriage can negotiate and put a clause as such which provides for exclusive right on the property that belonged to only them before the marriage.

In most cases, separate property includes:

  • Anything owned prior to the marriage
  • Anything inherited or received as a gift during the marriage
  • Anything either spouse earned after the date of separation

Upon separation by death or divorce, the court could assign exclusively owned or acquired property to the other spouse. To ensure that the property acquired before marriage is divided evenly as per the past ownership the couple can enter into a prenuptial agreement and keep the terms clear beforehand.

2. Separate Debts-
Similar to separate property, separate debts belong to one spouse. All debts incurred before marriage are separate debts. Educational or job training loans acquired before marriage are examples of separate debts.

Treatment of Shared property

The treatment of property acquired independently before marriage is logically easier than the property which may be acquired by the couple together post solemnization of a marriage or as per various traditions in India be given to the couple by in-laws for the couple to use together. To clarify how such properties are to be treated a couple can negotiate treatment of any future properties that may be acquired by them together as a couple.

Earning during the marriage

Someone with a high earning capacity may want to cap the maintenance provision to be made to the other party in the event of divorce. This is generally the application of various high earners in short duration of time like athletes, models etc. Although this clause can state that all earnings of each party during the marriage shall be considered the separate property of the individual, it can in no way be drafted to remove liabilities of taking care of the children through maintenance or funding their requirements otherwise in the marriage. 

Rider dealing with any future transfer or treatment of property

The Prenuptial agreement can also contain a clause that does not take away power from any future transfer of property being made by one spouse to the other whose treatment has been dealt with in the prenup.

Any device so created for example- Will/ instrument to transfer property dealt with/ gift or grant etc; has a legal standing regardless. Nevertheless, such a rider in the Prenup only provides clarity and more credibility to the Prenuptial agreement.

Clause dealing with Children 

This is also a very important clause in the context of Indian society. A Prenup can effectively decide who gets the custody of any future child whether biological, adopted or as a guardian in case of death or divorce. The clause can further venture into the territory of child support or can keep a simple language and only speak about the custody.

The real advantages of a Pre-Nuptial Agreement; not having a Binding value in Court

A big advantage of having a prenuptial agreement is that it forces couples to have a financial discussion before marriage. The issues that can be efficiently dealt with through such a contract include protecting both the parties from each other's debts, preventing a division of the family businesses and disputes regarding separate and shared assets, as well as dealing with the issue of children's custody after the dissolution of a marriage. So, essentially, the agreement helps decide who gets what in case of divorce or deal.

The Indian courts take cognizance of a prenuptial agreement if both the parties mutually agree to it and sign it voluntarily, without any undue influence, force or threat. Besides, the agreement should be fair, clearly stating the division of property, personal possessions and financial assets of the parties, and should be certified by a separate lawyer for each.

There could be a way out of acrimonious courtroom battles and bitter divorces if Union minister Maneka Gandhi has her way. The minister wants prenuptial agreements — a standard legal document in many Western countries — to be recognized in India. The move could help both spouses especially women get their right to maintenance or marital property without a cumbersome, expensive legal battle.

Divorce cases in India often run into several years of courtroom battles over property, assets and maintenance, and women often end up losing out on their rightful share. If the terms of property division and maintenance are clearly spelt out in a legally valid prenup, however, it could ensure that women get the assets and support they are entitled to without going through lengthy litigation.

Thus, prenups can be used as a tool to check lengthy and cumbersome courtroom trials, save the court’s time. It can also act as determining the factor for securing the rights of women against divorce as well!

Starting Point for evidence regardless of not being binding per se

Although Prenups are not enforceable per se in Indian Courts right now yet they can always be used for the purpose of evidence and reference. Prenuptial agreements are rare in India. If entered into, they are taken as ordinary agreements. However, if in a prenup, the woman agrees to give up her legal rights, the court is likely to strike off such an agreement as opposed to the public policy of India. This is because an agreement by which a party gives up his or her legal remedies is considered void (Section 28 Contract Act 1872).

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