Status and Scope of Prenuptial Agreements in India and their Global Significance

Abstract

“A prenuptial agreement, often referred to as a prenup or a premarital agreement, is a legally binding contract entered into by a couple before they get married or enter into a civil partnership. This agreement outlines how the couple’s assets, debts, and other financial matters will be handled in the event of a divorce, separation, or death.” Marriage in India is treated as a sacrament rather than a contract which means that it is formed it is eternal and a bond made forever. Most people in India still consider divorce as a taboo irrespective of the reasons due to which it is taking place such as lack of love, unfaithfulness, bigamy and even abuse of any kind, mental or physical. The author through this research paper has tried to showcase that that even though prenuptial agreements are considered against the public policy in India but are rather in favour of it and can be used various issues such as polygamy, adultery, distribution of property, insurance policies, pension and many more.

Keywords- prenuptial agreements, legality, maintenance, marriage sacrament

Introduction

Prenuptial agreements date back to ancient Egypt. “Back then, prenuptial agreements were not documents drafted by lawyers that represented the rights of each spouse rather they were written or verbal contracts establishing the property that each spouse would bring to the marriage. They were used to establish the bride’s dowry and the bride wealth–the price that a groom would pay the bride’s family in exchange for marrying her.”1

1 Keith B. Schulefand, Esq. (2019) The long and strange history of prenuptial agreements, Keith B. Schulefand, Esq. Available at: https://www.schulefandlawoffice.com/blog/2018/03/the-long-and-strange-history-of- prenuptial- agreements/#:~:text=The%20very%20first%20instance%20of%20this%20occurred%2 02%2C000,that%20married%20women%20would%20inherit%20their%20husband%E 2%80%99s%20estate. (Accessed: 11 November 2023).

“For several thousand years, women were not granted the right to own property. Often, they could not even choose their own spouses. As time went on, prenuptial agreements became a way to ensure that a woman could access her husband’s property if he died. The very first instance of this occurred 2,000 years ago in an ancient Hebrew marriage contract called a ketubah. The use of prenups for this purpose was solidified in 1848, when New York State passed the Married Women’s Property Act, ensuring that married women would inherit their husband’s estate.”2

Research Methodology

This paper is of descriptive nature and the research is based on secondary sources for the deep analysis of status and scope of prenuptial agreements in India and their global significance. Secondary sources of information like newspapers, journals, and websites are used for the research.

Review of Literature

In the research paper, Prenuptial Agreements in India: An Analysis3, the author Rushabh Gurav, has stated that marriage, in India, is treated as a sacrament rather than a contract which means that it is formed it is eternal and a bond made forever. Most people in India still consider divorce as a taboo irrespective of the reasons due to which it is taking place such as lack of love, unfaithfulness, bigamy and even abuse of any kind, mental or physical. It is stated by the author that prenuptial agreements do not profess divorce but rather guarantee the protection of right of both the wife and husband in case of divorce. Signing of prenuptial agreements would help the courts in determining the alimony and maintenance and should be considered the same as insurance in case of a mishap.

In the research paper, Legal Validity of Pre-nuptial Agreements in India: An Analysis4, the author Farooq Ahmad Mir, has stated that even though prenuptial agreements are considered against the public policy in India but are rather in favour of it and can be used various issues

2 Id.

3 Gurav, R., 2022. Prenuptial Agreements in India: An Analysis. Supremo Amicus, 30, p.488.

4 Mir, F.A., 2021. Legal Validity of Pre-nuptial Agreements in India: An Analysis. Central University of Kashmir Law Review, 1, pp.22-59.

such as polygamy, adultery, distribution of property, insurance policies, pension and many more. It is argued that the aim of prenuptial agreements is to provide economic security to the married partners and help to secure gender justice by making spouses at par with each other. The author is of the view that the term “public policy” is very vague and further stated that prenuptial agreements that not all agreements against the public policy as they are not any different from a general contract except for the fact that they are executed by specific parties, the married couple, before their marriage, agreeing to resolve marriage resulted issues amicably.

In the research paper, Quest for Prenuptial Agreement in Institution of Marriage: A Socio-Legal Approach5, the author Vijender Kumar, has stated how “prenuptial agreements are similar to the customary practice in India where families of the bride and groom delineate the composition and division of resources, rights, liabilities and responsibilities before, or at the time of, the union but are still considered as an alien concept.” The author is of the view that prenuptial agreement is a very progressive approach as it helps in the following ways, firstly, it is the most economical solution considering “the costs of divorce or suits relating to maintenance, adoption etc. through the court. Secondly, parties are free to include conditions which are suitable to them with mutual consent. Thirdly, the procedure is more relaxed than going through court. And fourthly, it keeps a check on misrepresentations made by either spouse and reduces the possibilities of fraud; and hence, parties can be protected from such bitter experiences.”6

Findings and Discussion

A prenuptial agreement, often referred to as a “prenup” or a “premarital agreement”, is a legally binding contract entered into by a couple before they get married or enter into a civil partnership. This agreement outlines how the couple’s assets, debts, and other financial matters will be handled in the event of a divorce, separation, or death.

Prenuptial agreements are designed to provide a level of certainty and protection for both parties, particularly in the event of divorce. However, their enforceability can vary based on jurisdiction, and certain conditions must be met for a prenuptial agreement to be considered

5 Kumar, V., 2018. Quest For Prenuptial Agreement In Institution Of Marriage. Journal of the Indian Law Institute, 60(4), pp.406-426.

6 Id.

valid. It is crucial for both parties to consult with separate legal counsel to ensure that the agreement meets legal requirements and adequately protects their interests.

“To ensure that prenuptial agreements do not undermine the marital duty to be fair and honest, states often require both spouses retain independent legal counsel. To retain legal counsel means to hire a lawyer to look over the prenuptial agreement and advise the client about the potential consequences of signing it. In order for the lawyers to be independent, the lawyers cannot have a conflict of interest.”7

Divorce, the legal dissolution of marriage by a court or other competent body, is one of the most difficult phases of life a married couple goes through. In India, there are different laws which deal with the same depending on the religion. “The Hindu Marriage Act,1955 governs the divorce for the Jains, Sikhs, Hindus and Buddhists. The divorce laws of Muslims are governed by Dissolution of Muslim Marriage Act,1939, the Parsis by Parsi Marriage and Divorce Act,1936, and Christians are governed by the Indian Divorce Act,1869. All inter- community marriages are governed by the Special Marriages Act,1954.”8

“In India, prenuptial agreements are neither legal, nor valid under the marriage laws because they do not consider marriage as a contract. A marriage is treated as a religious bond between husband and wife and prenuptial agreements don’t find social acceptance.”9 “In 2015, the Ministry of Women & Child Development initiated a move to formally recognize prenuptial agreements, but could not make any head way due to lack of consensus at the ministry level.

7 Prenuptial agreement and our legal system (no date) Legal Service India – Law, Lawyers and Legal Resources. Available at: https://legalserviceindia.com/legal/article-5291- prenuptial-agreement-and-our-legal-system.html (Accessed: 12 November 2023).

8 Rai, D. (2019) Everything you need to know about divorce law in India, iPleaders. Available at: https://blog.ipleaders.in/divorce-law-in-india/ (Accessed: 11 November 2023).

9 Are prenuptial agreements valid and enforceable in India? (no date) The Economic Times. Available at: https://economictimes.indiatimes.com/analysis/are-prenuptial-agreements- valid-and-enforceable-in-india/articleshow/44782040.cms (Accessed: 11 November 2023).

Main opposition was that there is a doubt about the practicability of these agreements and they may lead to break down of the families.”10

In India, prenuptial agreements do not have a special status but are governed under the Indian Contract Act of 1872. Section 10 of the Indian Contracts Act of 1872 states that, “all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void”11 but on the other hand, under Section 23 of the Indian Contracts Act of 1872, it “creates a limitation on the freedom of a person in relation to entering into contracts and subjects the right of the person to the overriding considerations of the public policy”12. Therefore, even though the prenuptial agreement is made with free consent, it will be considered as void since it is against public policy and morality. Furthermore, “prenuptials are treated as unenforceable agreements since either party may be required to sign away the right to legal remedy in the division of the marital estate after the dissolution of marriage.” Under Section 28 of the Indian Contract Act of 1872, “any contract by which any party thereto is restricted absolutely from enforcing his/her rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals is void.”13

However, prenuptial agreements are considered valid in India under two situations, firstly, in Goa as the state is compliant with the Portuguese Civil Code of 1867 wherein “a prenuptial agreement may be signed between the two parties at the time of marriage, stating the regime of ownership. If a prenuptial has not been signed, then the martial property is simply divided equally between the husband and wife”. Secondly, prenuptial agreements become legally enforceable if the marriage is consummated under the Special Marriage Act of 1954 and all declaration documents are properly registered at the Register Office.

10 Mir, F.A., 2021. Legal Validity of Pre-nuptial Agreements in India: An Analysis. Central University of Kashmir Law Review, 1, pp.22-59.

11 The Indian Contract Act, 1872 (2022). Gurgaon, Haryana, India: LexisNexis.

12 Id.

13   Id.

In India, there have been contrasting views about whether marriage is only a religious bond between the two parties involved or can be considered as a contract.

Judgements in India where marriage was upheld as a contract and prenuptial agreements were validated-

  • Seema v. Ashwini Kumar14, it was held by the Supreme Court of India that registration should be made compulsory by the state government for all citizens irrespective of caste, religion, sex to check or control bigamy, child marriage, forceful marriage, to save time of the court in determining whether the marriage is solemnized properly or not.
  • Dhanjit Vadra v. Beena Vadra15, it was held that Section 13B of the Hindu Marriage Act, 1955 radically altered the legal basis of the human marriage by treating it as ordinary form of contract which competent parties can enter into and put an end to like any other contract by mutual consent.
  • In the landmark case of Bhagwati Saran Singh vs. Parmeshwari Nandar Singh16, the Allahabad High court held that marriage in addition to being a sacrament is a civil contract entered into between two parties.
  • Anjana Desi V. Ghose17, it was held that suits relating to marriage deal with that which in the eye of the law must be treated as a civil contract.
  • Nawab Khwaja Md. Khan vs. Nawab Husaini Begam18, an agreement was executed by the father-in-law prior to marriage according to which the bride was liable to get karcha- e-pandan and the said agreement was enforced by the Court. Further, an agreement by

14 Seema v. Ashwini Kumar, AIR 2006 SC 1158

15 Dhanjit Vadra v. Beena Vadra, AIR 1990 Delhi 146

16 Bhagwati Saran Singh vs. Parmeshwari Nandar Singh, 1942 ILR All 518

17 Anjana Desi V. Ghose, 6 Bengal Law Reporter, 243

18 Nawab Khwaja Md. Khan vs. Nawab Husaini Begam, (1910) 12 BOMLR 638

the husband to pay a monthly sum of Rs 25/- in addition to the maintenance even if the wife lived separately was held to be enforceable.

  • Razia Begum V Sahebzadi Anwar Begum19, the alleged prenuptial agreement in which the respondent had agreed to pay his wife a sum of Rs 2000/- per month as kharcha-e- pandan which was too enforced by the court.”

Judgements in India where prenuptial agreements were held to be invalid-

  • Tekait Mon Mohini Jemadai v. Basanta Kumar Singh20, in this case the husband has signed a prenuptial agreement that he, along with his parents, would live in the house of his mother-in-law forever but after 15 years due to some differences the husband moved out and demanded that his wife should also leave the house with him. This was challenged in the court by Mon Mohini and it was held by the Calcutta High Court that this prenuptial agreement made an attempt to control the rights of the husband given to him by the Hindu law and the agreement was against the public policy and was thus declared to be void.
  • Bai Fatma v. Ali Mahomed Aiyab21, in this case an agreement was signed by the parties here, a Muslim man and a Muslim woman, that in event of their separation, the husband would pay a pre-decided amount to the wife as maintenance. It was held by the Bombay High Court that this agreement to a certain extent was encouraging future separation and was against public policy, hence, making the agreement invalid.”

Global Significance of Prenuptial Agreements-

In the case Radmacher vs. Granatino22, it was held that prenups do not hit public policy if they are mutually and voluntarily entered by the married couple. Three factors were set out by the

19 Razia Begum V Sahebzadi Anwar Begum, [1961] 3 SCR 936

20 Tekait Mon Mohini Jemadai v. Basanta Kumar Singh, (1901) ILR 28 Cal 751

21 Bai Fatma v. Ali Mahomed Aiyab, (1912) 14 BOMLR 1178

22 Radmacher vs. Granatino, [2010] UKSC 42

Supreme Court which in turn increased the likelihood of prenuptial agreements getting accepted legally in the court of law-

  • “There should be free consent of both the parties involved
  • The parties must be completely aware of the implications of the said agreement
  • The agreement must not be unfair to hold the parties in the circumstances prevailing”

The above-mentioned case was a historic judgement because after the said judgement was passed the number of prenuptial agreements signed increased not only in England but also in Germany. “This ruling has been further underlined in the case of WW v HW. However, even as case law continues to support it, prenuptial agreements are still not legally binding and there has not been much development on the Law Commission’s proposals of a qualifying nuptial agreement made in 2014.”23

In Europe, prenuptial agreements are valid in several countries such as “France, Belgium, the Netherlands, Germany, Poland, Switzerland, Sweden, Denmark, Norway and Finland.”24 Pre- nuptial agreements can also shield non-community assets from bankruptcy and be used as collateral for post-marriage lawsuits and settlements (e.g., if one spouse has mistakenly sold or mortgaged a piece of property that the other spouse had set aside). This is the case in many of the aforementioned countries.

23 Prenuptial agreement and our legal system (no date a) Legal Service India – Law, Lawyers and Legal Resources. Available at: https://legalserviceindia.com/legal/article-5291- prenuptial-agreement-and-our-legal-system.html (Accessed: 13 November 2023).

24 Prenuptial agreement (2023) Wikipedia. Available at: https://en.wikipedia.org/wiki/Prenuptial_agreement (Accessed: 13 November 2023).

While the position of prenuptial agreements with respect to the United States of America is they are “enforceable in all fifty states of the United States, although the nature of such agreement and procedural requirements prescribed for them varies from state to state.”25 These agreements are held valid as long as it protects the interests of both the parties involved and the agreement is entered into by parties with full and fair disclosure of their assets. Provisions that tend to unreasonably encourage divorce or separation are unenforceable on grounds of public policy.

In the United Kingdom, a prenuptial agreement is a legal document formulated by the couple before getting married to outline the division of their assets in case of a divorce. Prenuptial agreements are not enforceable in the courts of United Kingdom but are given significant weight in the legal proceedings and are to a great extent upheld if they were formulated with the correct considerations and precautions.

In Australia, prenuptial agreements are also known as Binding Financial Agreements (BFA). They are legally enforceable under Section 90B of the Family Law Act 197526. International prenuptial agreements are not valid in Australia.

In China, prenuptial agreements are enforceable under the Marriage Law allowing for specified property ownership to be signed before marriage.

Suggestions and Conclusion

Prenuptial agreements have great potential to cater specific needs of married couples but the lack or absence of legislative laws pose a serious issue. They are governed by the law of contracts and not personal laws as they are seen standing against the public policy and are hence held void. “Prenuptial agreements help in the determination of alimony and maintenance and the burden of post-breakdown of marriage is greatly reduced with a prenup in play.”27 They are one of the most economical solutions and the parties have freedom to include terms and

25 Ghosh, A. and Kar, P., 2019. Prenuptial Agreements in India: An Analysis of Law and Society. Nujs L. Rev., 12, p.217.

26 Family Law Act 1975 (Cth)

27 Gurav, R., 2022. Prenuptial Agreements in India: An Analysis. Supremo Amicus, 30, p.488.

conditions that are mutually beneficial to both. Prenuptial agreements do not profess divorce but rather guarantee the protection of right of both the wife and husband in case of divorce. “They decrease the chance of misrepresentation or fraud by either party, and hence aims for a more amicable divorce option.”28

Name- Kavya Agarwal

College name- Kirit P. Mehta School of Law (NMIMS, KPMSOL), Mumbai

28 Are prenuptial agreements valid in India? (no date) Finology Blog – Latest Updates & News on Current Affairs and Laws in India. Available at: https://blog.finology.in/recent- updates/prenuptial-agreement (Accessed: 13 November 2023).