Comprehending Prenuptial Agreements In India: Exploring Types, Origins, Significance, Legal Validity, And A Global Comparative Analysis

INTRODUCTION

According to the Uniform Premarital Agreement Act of 1983 (UPAA) in America, a legally binding agreement between individuals who intend to marry which affirms, modifies, or waives a marital right or obligation during the marriage or at separation, marital dissolution, death of one of the spouses, or the occurrence or nonoccurrence of any other event is termed a premarital agreement.

As the parties prepare to go beyond marriage ceremonies, vows, and signing a paper that will presumably end all their pre-wedding blues, a prenuptial agreement becomes a controversial topic, with both sides wondering, "Where is it all coming from?"

Prenuptial agreements between prospective spouses aim to prepare them for their upcoming marriage and allow couples to discuss finances, marital estate, earnings management, and future financial goals. This communication helps couples handle potential issues and ensures they are well-equipped for future challenges.

HISTORICAL SIGNIFICANCE

Prenuptial agreements have a long history dating back to ancient Egypt, with some of the earliest known examples dating over 2,000 years old. However, these early agreements were not formal documents drafted by attorneys to represent the rights of each spouse. They were typically written or verbal contracts that outlined the property like chattel, land, valuable metals, or even prestige, that each spouse would bring into the marriage. These agreements were primarily used to establish the bride's dowry and wealth—the payment made by the groom or his family to the bride's family in exchange for marrying her during that era.

The Hebrew culture also has over 2,000 years of history with the Ketubah, their version of a pre-marriage contract. ‘Ketubah’ in Hebrew means ‘it is written’ and is one of the first legal documents that gave financial rights to women within a marriage. In fact, the Ketubah is said to be the first written instance of a document that ensured that a woman inherited her husband’s property if he died. 

Perhaps surprisingly, the Ketubah is more than a traditional legal document and is artistically designed and creatively printed. 

In European societies, dowries are often regarded as early forms of prenuptial agreements, with royalty being among the earliest adopters of the modern interpretation. Edward IV and Eleanor Butler are said to have signed a prenuptial agreement in the mid-1400s, while Elizabeth Oglethorpe requested General James Edward Oglethorpe to sign one in the mid-1700s to secure her property rights.

 Prenups that addressed the circumstances of divorce — as opposed to death — did not emerge as a relatively popular legal tool in the US until after the Second World War. As late as the 1970s, courts rarely enforced them insisting that such agreements promoted divorce by laying out the worst-case scenario in advance.

CONTEMPORARY RELEVANCE

Nowadays, people usually get married after they have established their careers and amassed a personal fortune. As a result, a marriage's financial environment has changed dramatically. Prenuptial agreements now protect hard-earned money and assets, guaranteeing that the wealth each partner brought into the union is kept separate and safeguarded in the event of a divorce. 

Fortunately, nowadays, the stigma around divorce has lessened as a result of a wave of women's financial, educational, and social empowerment. Coupled with the establishment of Mahila Panchayats, or "All Women Alternative Courts," women now have more opportunities to voice their complaints about their married life. Due to this, the divorce rate has quickly increased, rising from one in 1000 ten years ago to roughly thirteen in 1000. 

The public’s fascination with celebrity lifestyles has also played a role in the evolution of prenuptial agreements and has spurred discussions about prenuptial agreements in the mainstream media. High-profile divorce cases involving celebrities and public figures have underscored the importance of having clear financial agreements, influencing the broader acceptance of prenups as a strategic tool for managing marriage assets and responsibilities.

AMBIT UNDER THE INDIAN CONTRACT ACT, 1872

One view suggests that while a marital agreement may be considered legitimate if both adult spouses sign it voluntarily and it does not infringe upon any party's rights, its validity can still be challenged if its contents violate public policy. According to Section 23 of the Indian Contract Act of 1872, any contract that goes against public policy is deemed illegal and unenforceable, regardless of whether it meets the requirements for a valid contract under Section 10. Therefore, the enforceability of a marital agreement hinges not only on the consent of both parties but also on its alignment with public policy considerations.

Despite concerns that prenups might contravene Section 26 of the Indian Contract Act (ICA), which disallows agreements in restraint of marriage, they are not inherently contradictory to this provision. Section 26 of the ICA renders agreements that directly restrain marriage as void but pre-nuptial agreements primarily focus on financial aspects. Rather than impeding a marriage itself, prenups outline arrangements related to property division, spousal support, and other financial matters, which do not inherently impede the freedom to marry. 

Therefore, prenups, when drafted properly and within legal boundaries, can serve as valid contracts without violating Section 26 of the Indian Contract Act.

LEGAL VALIDITY IN INDIA

In India, nikahnamas are accepted as a crucial component of Muslim weddings, and their legal significance in determining the terms of Muslim marital dissolution is acknowledged. However, Court interpretation has played a major role in the implementation of prenuptial agreements concerning various religious communities. Notably, in the contemporary discourse around prenuptial agreements in India, social viewpoints have assumed a prominent position, even superseding the viewpoints of the principal parties involved in the issue.

In the legal case of Bai Fatma v. Ali Mahomed Aiyab, a contract was made between a Muslim man and woman, stating that in the event of a future separation, the husband would provide the wife with a specific amount as support. The Bombay High Court used English law in its deliberations. The judge found that the wording of the agreement anticipated and even promoted the approaching separation. The agreement was deemed void because it was against the law.

The Divorce Act of 1869, governing Christian personal laws, is the only section of the law that directly mentions prenuptial agreements. The act states that before deciding whether to dissolve the marriage or not, the District Court will take into account the existence of any pre- or post-marital arrangements. Prenuptial agreements about the partition of property before marriage are only allowed in the state of Goa.

Hinduism views marriage as a sacred union, raising questions about the relevance and enforceability of prenuptial agreements concerning divorce made before marriage within Hinduism. Unlike Muslim and Christian laws, marriage is not considered a contract under the Hindu law. Under the ambit of Hindu Marriage Act prenups are regarded as invalid.

The Hindu Marriage Act of 1955 governs marriages among Hindus, Buddhists, Sikhs, and Jains, providing a legal framework for marriage, divorce, custody, adoption, and maintenance within these communities. It aligns with public policy by promoting monogamy, setting a minimum age for marriage to protect minors, prohibiting child marriage, emphasizing the importance of consent, and mandating the registration of marriages to maintain accurate records and protect spouses' legal rights.

In Sribataha Barik v. Musamat Padma, the point of disagreement stemmed from a prenuptial agreement. The husband consented to move in with his wife's mother before they were married. A few years later, he decided to move back to his mother's house and it concluded that the agreement was illegal since it went against both Hindu law and public policy. The court also mandated that the wife and their child relocate to the husband's house.

Although there exists a body of Indian case laws opposing the validity of prenuptial agreements in the context of Hindu marriages, it is worth noting that there are also some cases that have sought to accord validity to prenuptial agreements.

 In Pran Mohan Das v. Hari Mohan Das, a person agreed to marry a woman based on the promise of her father to gift a house to his daughter. After several years of possession, the couple sold the house. The wife’s father later sued to recover the house. Here, the Calcutta High Court held that the prenuptial agreement was good and valid and the principle of ‘part-performance of a contract’ estopped the plaintiff from recovery of the property. Moreover, as the agreement in question was not a marriage brokerage contract, it was not found to be opposed to public policy.

Indian courts have since then changed their approach to prenuptial agreements over time, but have not granted validity to these agreements independently. Instead, they interpret them as valid by enforcing the terms alongside other legal principles, such as property law, or creating exceptions within broader judicial precedents that view prenuptial agreements as invalid due to conflict with public policy.

THE PUBLIC POLICY OVERVIEW

According to Lord Atkin, one of the most eminent judges of the last century, the doctrine of public policy “should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds.”

It is important to keep in mind that an agreement whose object or consideration is against public policy is invalid in contractual terms. It is thus, important to reflect on the fact that certain judicial holdings have over time pronounced several prenuptial agreements as being void on account of being against public policy.

In the case of Tekait Man Mohini Jemadi v. Basanta Kumar Singh, the Calcutta High Court found a prenuptial agreement providing that the husband would never take his wife away from her mother’s house and would follow the instructions of the wife’s mother at all times to be void on the ground of public policy. 

Similarly, a prenuptial agreement that required the husband to perpetually reside in his wife’s house was held to be against public policy by the Allahabad High Court as it was viewed to constitute a restriction on the liberty of the husband. 

THE TREND GLOBALLY

• United Kingdom

UK’s Supreme Court was requested to decide in the case of Radmacher v. Granatino over a prenuptial agreement that prohibited spouses from claiming the other's assets in the event of a divorce. According to the Supreme Court, prenuptial agreements are lawful as long as neither party suffers unjust treatment as a result of the arrangement and does not contravene any public policies.

Ultimately, the legitimacy of a separation agreement was acknowledged in the late 1920s—more precisely, in the ruling in Hyman v. Hyman—but any attempts to use such agreements to stop the matrimonial courts from using their authority to grant financial remedies were ruled invalid. This Hyman premise was subsequently acknowledged in the 1973 Matrimonial Causes Act. 

It's interesting to note that, as other prior Indian cases previously discussed demonstrate, the Indian attitude for a considerable amount of time remained consistent with the British position of the day. It appears that British precedent was invoked in several Hindu spouse lawsuits to maintain that any prenuptial agreement for future separation is against Hindu law's marital commitment and hence against public policy.

•  Singapore 

Prenuptial agreements are prohibited by English law, which Singapore has historically followed. The highest Court of Appeal of Singapore has maintained the validity of a prenuptial agreement on the division of assets in the event of a divorce in the case of TQ v. TR It was agreed that it would normally carry out international agreements before marriage. The court decided that Singaporean courts must take into account prenuptial agreements involving foreign citizens who are subject to foreign law, provided their terms do not violate Singapore's civil policy.

In Singapore, certain agreements between spouses may not be enforceable across four key areas. Firstly, agreements that alter the fundamental nature of marriage are not upheld. Secondly, agreements requiring payment of lump sums for future maintenance are only effective upon court approval. Thirdly, agreements regarding the division of matrimonial assets fall under the regulation of Section 112 of the Women's Charter. Lastly, agreements concerning child custody must conform to Section 129 of the Charter.

The case of Wong Kam Fong Anne v. Ang Ann Liang upheld an agreement between spouses for the division of matrimonial assets. Similarly, voluntary agreements between spouses, even if not technically valid under contract law, remain pertinent to the court in striving for fairness.

• Australia

The Family Law Amendment Act, of 2000 established the enforceability of prenuptial agreements, also referred to as "binding financial agreements," for the first time in Australia. The regulation of such agreements by family law solicitors is subject to certain regulations included in Part VIIIA of the Family Law Act. There are many situations in which a court may declare a premarital agreement illegal, such as where independent legal assistance was not obtained or offered before the agreements' execution, concealment of assets, unethical actions, coercion, etc.

• USA

Though the specifics of these agreements and the legal criteria for them differ from state to state, prenuptial agreements are legally binding in all fifty states in the union. The Uniform Premarital Agreement Act, or ‘UPAA,’ was drafted in 1983 by the National Conference of Commissioners on Uniform State Laws and has since been ratified by 26 states as well as the District of Columbia. Even though each state has its regulations for these kinds of agreements, all states have certain requirements in common that must be met.

Most of the time, there is an intention to shield the partner whose assets increase during the marriage or who possesses significantly more assets than the other partner does when they tie the knot. The California Supreme Court's decision in the In Re Marriage of Bonds case illustrates the impact of such power imbalance. The court upheld a premarital agreement despite the following factors: the wife did not have legal representation at the time of the agreement, English was not her native language, and the husband had a sizable amount of assets because the couple had agreed to keep their assets separate during the marriage.

ADVANTAGES AND DISADVANTAGES OF THIS SETUP

Prenuptial agreements can shield a person from their partner's financial commitments, safeguard one's career, business, or estate from division, guarantee alimony or spousal maintenance, permit remarriage, and cover child support, custody, and parental responsibilities. Prenuptial agreements also help to define the legal rights of spouses with cross-border considerations, manage maintenance issues, reduce legal conflicts, manage child custody concerns, handle maintenance issues, and encourage an equal distribution of wealth. Moreover, these protocols could potentially minimize needless lawsuits filed by dishonest partners who might exploit laws meant to save women from abusive relationships.

In India, marriage in particular has very sacred connotations. Even the concept of a prenuptial agreement would seem absurd because a significant portion of the populace is illiterate and holds on to traditional beliefs. On its own, the proposal would most likely be dismissed. In addition, the majority of people think that the idea of a prenuptial agreement demonstrates a lack of mutual trust, which is the foundation of any successful union. These views regarding prenuptial agreements therefore act as a significant deterrent for people who are thinking about getting one.

POSSIBLE SUGGESTIONS 

In a prenuptial agreement, the following clauses outlining the terms and conditions regarding various aspects can be added for cohesive implementation: 

1. Disclosure of liabilities and assets of both parties.

2. Financial and monetary positions of both parties.

3. Real estate properties owned by both parties.

4. Estate planning arrangements.

5. Division of properties in case of marriage dissolution.

6. Maintenance or alimony considerations upon marriage dissolution.

7. Child custody and maintenance arrangements.

8. Financial status of any businesses owned by either party, as well as partnership agreements.

9. Details of monetary savings, including credit card limits, debts, spending habits, and payments.

10. Financial investments and related matters.

11. Retirement benefits and accounts.

12. Terms related to medical and life insurance claims.

13. Management of joint bank accounts or other financial accounts.

14. Allocation and management of household expenses, bills, and miscellaneous expenditures.

15. Handling of jewelry and other assets.

Couples may also want to think about including a fidelity clause, which would oblige the unfaithful spouse to give up rights to jointly owned assets or pay a specified sum as a penalty to the other spouse if the adulterous relationship is proven in court. Additionally, prenuptial agreements may include penalizing clauses about bad habits like drug or alcohol abuse, gambling, or alcoholism, which would impose financial penalties, rights waivers, or other consequences on the offending spouse for violating the agreement's specifications. Given how frequently relationships are shared on social media, couples might want to consider defining in a social media clause what kind of content they are willing to share about each other.

CONCLUSION

Marriage is crucial in Indian society, and prenuptial agreements may taint family structures. However, considering family law developments, it's time to reconsider this position. Providing spouses with autonomy to create a consolidated outline can ensure equal rights and protect both spouses, especially the female spouse, from injustices in Indian marital relations.

Approaching marriage contracts in the Indian context like business contracts may not be the best idea since potential spouses may have romantic feelings for one another and because predicting the future in a married relationship can be challenging. Disregard of the potential benefits of introducing prenuptial agreements within the marital framework on account of simplistic concerns, often based on archaic thinking, and the absence of proactive deliberation by the State for recognizing and regulating such agreements, is, unfortunately, acting as an impediment towards couples in India consensually setting out the terms on which they want to be married.

There is a pressing need for thorough deliberation on how prenuptial agreements can be effectively regulated. Once these regulations are established, they should be integrated into the Indian legal system, rather than addressing prenups through ad hoc judicial decisions. Additionally, given the absence of definitive judicial guidance from the Supreme Court of India regarding the validity of prenuptial agreements, the introduction of executive guidance or relevant legal provisions within personal laws governing such agreements would be beneficial. It is hoped that the Indian legislature and executive will recognize the growing importance of prenuptial agreements in modern Indian marriages. Legal recognition should be extended, and consideration should be given to creating one or more model prenuptial agreements to serve as templates for couples in India when formulating their agreements.