Are pre-nuptial agreements enforceable?

On the balance of things, Indian courts have so far been cautious in enforcing pre-nuptial agreements.
Marriage
Marriage

If you demand the terms of separation before you marry, people will believe many things of you: that you are cynical, or prudent, or just simply mean. What the world will not accept is that you are a hopeless romantic, swayed only by grand ideals of love. You can claim to be an idealist, or you can make a pre-nuptial agreement: you simply cannot do both. Young couples today contemplating their future face such a test. What does the law have to say about that?

In India, the fact that different religious communities live with different family laws has resulted in widely varied rules around divorce, and tellingly, pre-nuptial agreements. Section 40 of the Christian Divorce Act, 1869, for instance, allows the court to consider the terms of any existing pre-nuptial agreements between warring couples at the time of passing judgment on the division of assets. Islam, on the other hand, views marriage as a contract: pre-nuptial agreements are executed as a matter of course and frequently upheld in courts.

Then there’s Hinduism. The religion considers marriage a holy bond, one which may only end under specified circumstances. Under Section 13 of the Hindu Marriage Act, this generally includes if one partner is either (i) adulterous, (ii) cruel, (iii) deserts the marriage, or (iv) ends up with an incurable mental disorder. Either of these grounds have to be proved before a court is willing to grant a decree of divorce. Where does that leave agreements on divorce executed before marriage?

Court in the Act

On the balance of things, Indian courts have so far been cautious in enforcing pre-nuptial agreements. In 1967, the Madras High Court in Thirumal Naidu v. Rajammal Alias Rajalakshmi refused to enforce a pre-nuptial agreement in which the couples agreed prior to the marriage to live apart. While entering an elucidation of India’s jurisprudence on the subject, and granting the wife’s plea for restitution of conjugal rights, the Court held that “an agreement before or at the time of marriage controlling the rights of the parties which the law confers upon them after the marriage and which, if enforced, might make the marriage itself nugatory, or infructuous…is bad and opposed to public policy.”

In another case, a Division Bench of the Orissa High Court in Sribataha Barik v. Musamat Padma was called upon to consider the validity of a similar contract. Under its terms, the husband was required to live at the wife’s parental home and maintain her there. After a few years, the husband shifted back to his parents’ house and expected his wife to come and stay with him. The wife refused and demanded that he honour his contract. The Court held such a pre-nuptial agreement opposed to public policy considering his willingness to continue the marriage at his own residence.

Conversely, in 1988, the Calcutta High Court in Commissioner of Income Tax v. Mansukhrai More accepted the validity of a pre-nuptial agreement which required the husband to transfer property to a trust for the sole benefit of children that he and his wife may have after the marriage. The Court thus held that the property transferred under its terms was valid and did not attract Section 16(3) of the Indian Income Tax Act.

Looking at how courts react to these pre-nuptial agreements, two broad conclusions are possible. First, agreements with clauses that override rights available to people under Hindu personal law will likely be struck down as opposed to public policy. Second, pre-nuptial agreements that encourage future separation may also end up attracting public policy concerns.

To make matters worse, what determines ‘public policy’ in any given era remains up for debate. In ONGC Ltd v. Saw Pipes Ltd, the Supreme Court held that public policy “does not admit of precise definition and may vary from generation to generation and from time to time.” In the Supreme Court’s view, the idea is nebulous and ever subject to the zeitgeist. What may be against public policy today may change tomorrow.

Internationally though, the distinction is clear. In 2010, the Supreme Court of the United Kingdom in Radmacher v. Granatino was called upon to decide on a pre-nuptial agreement that prevented spouses from making claims on the other’s assets in the event of divorce. The Court ultimately held that prenuptial agreements are not against public policy and enforceable, unless they result in unfairness to either partner. In the Court’s conception, there is a presumption of fairness, unless proved otherwise.

The United States of America has similar jurisprudence where pre-nuptial agreements are routine, but can be challenged on grounds of fairness, duress or deceit. Indeed, most European jurisdictions have high legal standards to invalidate such contracts and tend to rigorously enforce their terms.

Romantic Fine Print

Not many doubt that pre-nuptial agreements are gathering importance in India. The question is how much. One issue is legal advice. Contracts executed at the beginning of a union may include elements of inducement and undue influence. Islamic women already face this difficulty when they are expected to sign nikahnamas without objection, lest they be accused of insolence for distrusting their husbands. Another problem is disclosure. Is each side truly aware of the other’s financial position when the paperwork is drawn up?

Third, and most importantly, is fairness. Courts tend to view marriage as an institution, not a contract. First they look at needs, and then consider equity. Wealthy partners are expected to cough up money to maintain the couple’s standard of living before the divorce. Judges also reckon that the wife’s efforts as a homemaker and towards childcare enable the husband’s earning power. Why then shouldn’t she receive a lifetime slice of the benefits? Pre-nuptial agreements that fail to address these concerns are likely to count for less, or perhaps even nothing.

In the end, Indian courts tend to give much greater weight to conditions at the end of the marriage rather than agreements made at the start. Increased use of pre-nuptial agreements may begin to change that. And while divorce laws across the country strongly encourage mediation and reconciliation rather than courtroom battles, collaborative drafting at the pre-marital stage may take the sting out of the dissolution. The lesson for couples? How you live may well control the length and happiness of your marriage. What you write may yet determine how it ends.

The author is a practicing lawyer at the Gurgaon based law firm N South Advocates.

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