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Viability Of Pre-Nuptial Agreements In India

siddharth manocha
29 July 2019 2:42 AM GMT
Viability Of Pre-Nuptial Agreements In India
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    For all his vision and ambitions, Jef Bezos (Amazon Founder) with a net worth of $137 Billion approx., may not have ever imagined that he would be divorcing his wife, MacKenzie Bezos one day. With no Pre-Nuptial agreement between the couple, Mackenzie Bezos could now get almost half of the fortune as alimony making her the richest women in the world.

    To combat this millennial yet contemporary issue where divorces between spouses end up in unjustified distribution of assets, societies came up with a contract called Pre-nuptial, Pre-marital Agreement also called a "Prenup". It is a contract entered into by couples who intend to solemnize their wedding whereby applying various terms and conditions on their marriage and providing safeguards for themselves in case a situation of dissolution arises.

    The first recorded prenup goes back two millennia and was written with hieroglyphs. While divorce, separation and alimony seem like modern problems, they very well could have existed hand-in-hand with the practice of lifelong commitment. Likewise prenuptial agreements have their roots in ancient civilizations, though they were not always as fair and exhaustive as they are now.

    While in the millennial era, the trend of a prenup is popular among the rich and famous couples of Hollywood, Indian society is no more oblivious to it. However, since the marriages in India are considered a sacred union between the two individuals, prenups being a polemic concept, it becomes challenging to weigh them in contractual terms. In addition, opting for such agreements invites for social stigma and implies lack of trust between the families.

    However, with the changing times as there is a rise in the number of love marriages over arranged marriages, where both spouses are financially independent and desire to be "insured" against any ambiguity, prenups cannot be considered a taboo anymore.

    A prenup is beneficial in the following ways:

    • It provides for full disclosure of financial status of both spouses and prevents the possibility of marital frauds, wherein either of the spouses hides his/her real financial background from the other spouse.
    • It removes ambiguity and pre-determines the quantum of maintenance and/or alimony to the wife and children at the time of separation or dissolution of marriage. The alimony awarded by court reflects the discretion of the judge and can be meagre or excessive. Whereas, on the contrary, a pre-nuptial agreement provides for predetermined distribution of assets safeguarding their future after divorce.
    • Since most of the financial issues are already outlined in a prenup, the couple is saved from legal hassles, bitter negotiations and harassment that go into sorting out financial matters, post breakdown.
    • It provides for pre-negotiated custodial rights of children, at the time of separation or dissolution of marriage.
    • It also provides protection to husband against false prosecutions or allegations by the wife.

    ENFORCEABILITY:

    While the advocates for Prenuptial Agreements in India claim them to be women-liberating documents as they financially secure the female spouses by providing terms stating pre-negotiated distribution of assets, however, it has its own shortcomings. The first set of problems stems from the very diverse system of Indian matrimonial laws given the fact that marriages in India are governed by Personal Laws of the parties to marriage. Due to the absence of a Universal Civil Code governing marriages in India, each religion's marital code has its own set of rules, leading to diversity in the way marriages dissolve and distribution of assets, custodial rights of children, and other issues that are dealt with. Thus, no contract template can possibly adequately manoeuvre the complexity of this legal web.

    Presently, there is no particular law which talks about legality or enforceability of pre-nuptial agreements in India, except for Goan Law which recognises pre-nuptial agreements. The general view still remains that they cannot be legally enforced, and merely indicate the intent of parties. The Government's position emerged from a Stakeholders' meeting held in March, 2019 convened by The Ministry of Women and Child Development to deliberate on whether such agreement should have a legal standing. As some commentators noted, much of the discussion hinged on how Western societies had integrated the concept of prenups into their marriage laws. Ultimately, the meeting ended with no clear determination other than that more research into Western prenups was warranted.[1]

    The courts in India have held Prenups to be unenforceable under Section 23 of the Indian Contract Act as being in contradiction with the personal laws and therefore being opposed to public policy.

    In Tekait Mon Mohini Jemadai v. Basanta Kumar Singh[2], where there was an ante-nuptial agreement on the part of the husband providing that he will never be at liberty to remove his wife from parental abode and in Krishna Aiyar v. Balammal[3], where there was an agreement between the parties which provided for a future separation, the courts refused to uphold their validity. In CIT v. Shanti Meattle[4], the Allahabad High Court while deciding the validity of an agreement between the parties to live apart was held unenforceable because it brought to an end all marital rights which a husband can exercise in relation to his wife.

    However, this does not devalue the importance of prenups. Recently, The High Court of Bombay at Goa, in the matter "Sunita Devendra Deshprabhu v. Sita Devendra Deshprabu"[5] took the Pre-nuptial agreement into consideration for deciding the issue of separation of assets among the parties.

    Having no landmark authority on the validity of the Pre-nuptial agreements in India, the same are not considered per se invalid, however, they can at best be an indication of the intent of the parties.

    CONCLUSION:

    As the next generation becomes more aware of their rights and women becoming less tolerant in any misbehaviour in relationships, there is a sharp rise in divorce cases in India. Thus, if pre-nuptial agreements are given validity in India through legislation or by the courts recognising them as valid contracts, various benefits as stated above can be derived by the couples. Moreover, in case of NRI marriages where the female spouse are often victims of a fraudulent marriage and end up being deserted with no means of support, a prenuptial can do wonders by creating a balance in favour of the deserted spouse.



    [1] "Just Because Prenups Are Western Doesn't Mean They're Good for Women" published on theswaddle.com on April 9,2019.

    [2] ILR (1901) 28 Cal 751

    [3] ILR (1911) 34 Mad 398

    [4] (1973) 90 ITR 385 (All)

    [5] [2016 SCC OnLine Bom 9296]


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