Prenuptial agreement (prenup) is a contract of European roots that is garnering its place in many other regions of the world. In its classical European philosophical sense, the contract is represented as a measure of precaution that secures the assets of both the husband and wife. In India, the concept of prenups have resurfaced time-and-again and gained popularity, such as, when Maneka Gandhi recommended the Minister of Law and Justice for the establishment of prenups as mandatory before the act of marriage. However, the legality of prenup agreements in India is a dicey road.
What are Prenups?
A prenuptial contract is a contract among two married people highlighting the financial status and the individual obligations in the event of a failure of the marriage. Although the instrument is not popular in India, formation of a prenup before marriage could result in avoiding financial controversy and trauma at the time of separation. The prenup premise is interspersed with a variety of concepts, including family law, contract law, economic, feminist and public interests.
A prenup must include several provisions like, divulging assets and liabilities, position in financial or monetary terms, property share and division, specific properties, Child custody, alimony and maintenance as well as Insurance claims and joint account management.
Prenups have certain prerequisites:
There should be a properly made prenup, which should be fair and reasonable
The prenup shall be signed by both the parties and their attorneys.
It should contain all the assets and liabilities of both the parties as annexures.
It should contain a clause of severability.
It should contain clauses of division of assets and liabilities, custody, alimony maintenance, etc.
Legal Validity of Prenups in India
The Indian Prenuptial Accord appears to be an alien concept. In contrast to the western nations in which marriage is considered an agreement between husband and wife, marriage is considered a holy alliance of two individuals in India. Prenuptial settlement in India is considered to be legally invalid, as here, marriages are not contractual in nature.
Unlike countries like Canada and France, India does not have a special status in prenup contracts. Nonetheless, it could be considered governed as under Indian Contract Act of 1872 (ICA). As referred in the Section 10 of the 1872 Act, in order to be considered as a valid contract, an agreement shall be attained by free consent of both parties. On the other hand, Section 23 states that any agreement which is contravening public policy or is immoral shall be declared as void. Therefore even though a prenup is made with free consent, it will be considered as void since it is against public policy and morality.
However, there are two exceptions where Prenups are considered to be legal. First, Prenups are legal in Goa as it follows the Portuguese Civil Code of 1867 and second, if a marriage in question is solemnized under Special Marriage Act of 1954 along with proper registration of all the documents of declaration at the Register Office, then prenups are considered as legally binding.
In order to be considered as enforceable in courts, prenups shall have reasonable terms and conditions. For instance, a prenup agreement wherein the wife forfeits her legal rights will be immediately struck off by the court since it is against the provisions of Section 28 of the ICA, which states that any agreement which is in restraint of legal proceedings shall be considered as void.
Jurisprudence on Prenuptial Agreements
The High Court of Allahabad held in the touchstone case of Bhagwati Saran Singh vs. Parmeshwari Nandar Singh that a marriage, apart from being a holy concept, is also a civilian contract between two parties. This paved a way for acceptance of renups as legal contracts in India.
Until recently, the juridical condition of Prenuptials in England was also uncertain, which allowed for legal validity. The Court ruled in the case of Radmacher vs. Granatino that prenups do not argue in terms of public policy if the two enter each other on their own free will. The sentence 'public policy' was restructured in this decision. In this case, three variables that enhance the probability of prenuptial legal admission were identified by the Supreme Court, which were:
The agreement must be voluntarily concluded by both parties.
The parties must be fully aware of the consequences of the prenup.
In the existing situation, it must not be unjust to hold the parties to their agreements.
This ruling was also reiterated in the case of WW vs. HW. Nonetheless, even after having support from certain case laws and England's Law Commission Report on Qualifying Nuptial Agreements, prenups still remain to be legally non-binding.
The notion of prenups was more popular in Muslim law, as the marriages in the religion are subjected to negotiations of 'Mahr' provision which consists of a monetary payment from husband to wife. Tyabji defines Mahr as the sum payable to a married wife either through consensual agreement between both husband and wife or by operation of law. It was held by the Appellate Court in the case of Akileh vs. Elchahal, regarding the validity of Mahr being a prenup contract, that marriage is a valid and adequate consideration to uphold a prenup contract and thus, the contract shall be termed as valid as well as enforceable.
Prenuptial agreements are one of the most economical solutions when it comes to litigation costs of divorce, adoption or maintenance. It also establishes a sense of freedom for both the parties regarding inclusion of the terms and conditions which are suitable to them and are agreed-upon mutually. Additionally, it also decreases the chances of misrepresentation or fraud by either party, and hence aims for a more amicable divorce option.
However, public opinion still poses a significant barrier, as in India, fearing that a marriage would fail before entering it is regarded a taboo. As a result, a prenuptial agreement is believed to be against public policy. Prenuptial agreements do not hold legal validity in India. It is possible for two parties to enter into a prenup by consenting before engaging in a marriage. The courts will approve it with its acceptance if both parties consent to it and put in their signature without external pressure, influence, or force. However, all it takes is one allegation from one party for the settlement to break apart, trapping the individuals in a legal limbo.