Will India embrace the prenup?

Thursday, 01 May 2014
Samira Varanasi and Abhinav Harlalka review the enforceability of prenuptial agreements in India.

With globalisation expanding the spread of the Indian diaspora, there has been greater cross-pollination of cultural and societal norms and practices. Indian law in recent times has made great strides to keep pace with these changes (e.g. the recognition of the rights of a female live-in partner under the Protection of Women from Domestic Violence Act 2005), but it has sometimes failed to respond adequately to society’s demands.

Prenuptial agreements, which remain controversial in India, are a case in point. But, in an era when both parties to a marriage are often financially independent, and when asset protection is approached in a pragmatic, rather than emotional fashion, many young Indians are enquiring about the possibility of entering into prenups.

Is a prenup valid in India?

Indian society has many religious communities, each of which is governed by personal laws in matters relating to marriage, divorce, adoption and so on. These laws may be wholly codified, or partly codified and partly customary. However, despite the many statutes and judgments dealing with the matrimonial rights of individuals across religions, the law dealing with the legality of prenups in India is sparse.

While there is case law suggesting that separation agreements entered into during a marriage, but while divorce proceedings are pending, are valid,1  the courts have historically proven hesitant in enforcing prenuptial and postnuptial agreements, or similar agreements entered into during a marriage that contemplate future separation.2  

Acceptance of a prenup under Hindu personal law has proven difficult, since that law considers marriage to be a sacrament and not a matter of contract. However, in an attempt to strike a balance between valuing marriage as an institution and protecting individuals’ interests, Indian courts have held that a Hindu marriage is a civil contract entered into with the consent of two persons, in addition to being a sacrament.3  Even so, the enforceability of prenups remains controversial.

Islam considers marriage to be a civil contract and may ideally be more accepting of contractual preconditions to marriage. A nikahnama, a formal binding contract outlining the responsibilities and rights of the parties to a Muslim marriage, comes closest to achieving the effect sought from a prenup.

A contract is valid under Indian law only if: (i) it is entered into with the free consent of the parties; (ii) the parties are competent to contract; (iii) there is valid consideration; (iv) the contract has a lawful object (e.g. something that is not against the public policy of India); and (v) has not been expressly declared to be void.4

The law on the enforceability of prenups remains largely ambiguous,5  and subject to challenge on the ground of public policy (see the ‘lawful object’ requirement above). However, public policy must be interpreted in line with changing times.6  Therefore, revisiting the question of enforceability of prenuptial and postnuptial agreements in India may not be entirely out of place.

Can a foreign prenup help?

Even if a prenup is executed in a foreign state and a positive decree is obtained in that jurisdiction, the enforceability of such a foreign decree will depend on whether or not the jurisdiction in question is a reciprocating jurisdiction, and whether its law is compatible with the law currently in force in India.

Couples seeking to safeguard personally acquired property may wish to consider whether separating out the property under a trust will meet their objectives. Trusts are governed by a relatively flexible law which allows the parties executing the trust deed more discretion in managing the distribution of funds settled into the trust.

At the moment, prenups may only have persuasive value before a divorce court; it is still at the court’s discretion as to how far it will be guided by the terms of a prenup.

But, as alluded to above, courts have stressed the need for public policy to change with the times. In light of statistics showing rising divorce rates in India, it is to be hoped that prenup planning starts to be understood as a wealth-management technique driven by informed choice and the couple’s active participation, rather than a sign of a marriage doomed from the start. A well-drafted prenup can facilitate fairness, certainty and transparency in the treatment of marital or non-marital assets at a time when mutual anger may lead to misguided decisions.

  • 1Sm Sandhya Chatterjee v Salil Chandra Chatterjee, 1980 AIR Cal 244; Tekait Mon Mohini Jemadai v Basanta Kumar Singh (1901) ILR 28 Cal 751
  • 2Audumbar Gangaram  v Sonubai Audumbare (1961) ILR Bom 814
  • 3Bhagwati Saran Singh v Parmeshwari Nandar Singh (1942) ILR All 518
  • 4Section 10 Indian Contract Act 1872
  • 5The exception is the state of Goa, which follows the community property regime under the Portuguese Civil Code
  • 6State of Gujarat v Mirzapur Moti Kureshi 2006 AIR SC 212
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Samira Varanasi, Abhinav Harlalka

Samira Varanasi is a lawyer at Nishith Desai Associates. Abhinav Harlalka is a lawyer at Nishith Desai Associates.

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