Impact of divorce on joint property in India

Impact of divorce on joint property in India

At the time of divorce, couples are often confused and uncertain about the division of property held jointly by them. The problem arises because eventuality of separation is not contemplated while purchasing jointly and there is no proper documentation.

Matrimonial responsibilities are no longer a domain of any single spouse. Both have to participate equally. Joint ownership of husband and wife, in property purchased after marriage, is a common feature. There are various reasons for preferring joint ownership in property.

  • Rebate in stamp duty for women investors
  • Tax benefits associated with joint ownership
  • Loan eligibility increases and repayment process become easy

When couples decide to part away, there are many issues to be addressed and the most important being the division of joint property. 

Many times, estranged couples have approached us to find a solution to their problem of division of property. We generally advise them to decide the same with mutual consent because litigation in this regard can be quite toiling.

Division of property at the time of divorce:

1.    Division by mutual consent: Division of property held jointly, can be smooth if there is a mutual understanding among the two for:

  • Ownership
  • Equity
  • Contribution

The partners get their share as per the equity/contribution.

2.    Proof of Contributions made for the purchase of property: The person who holds the title is the owner even if the other partner has contributed the purchase money in total. The other partner has to prove the financial contributions made by him to get the due share.

3.    Self-acquired property or inherited property: The self-acquired property is not part of any settlement at the time of divorce. The property to be inherited in the future does not become part of the settlement.  If the ancestral property has been partitioned or has devolved as per succession law and husband or wife have got their shares, then such property becomes self-acquired property qua the spouses and is not subject to settlement at the time of divorce.

4.    Joint loan: If the joint property has been bought on loan payable by both, then the parties have to split their liabilities accordingly, or one partner can bear the loan amount and be compensated by other.

5.    Disposal of joint property as per Section 27 of Hindu Marriage Act: The Hindu Marriage Act, 1955 contains a provision u/s 27 of the Act, for disposal of property presented jointly to the spouses, at or about the time of marriage. Joint property purchased after marriage is outside the purview of this section. However, if the parties have reached a compromise regarding such properties, Court may record the same at the time of passing the decree.

6.    Maintenance: Right to maintenance includes right to residence also after divorce. However, the right depends upon the terms of the decree of divorce. In Hindu law, any party can apply for the grant of permanent alimony and maintenance pendent lite. 

The amount of maintenance if not paid as directed, can be recovered from the property of the person liable to pay the same.

Smooth Sailing:

  • It is always advisable to engage a lawyer and prepare the documents relating to purchase of the property taking care of all reasonably expected eventualities. Proper documentation defining the claims based on equity makes division an easy affair later.
  • Selling the property and sharing the proceeds is also an option.
  • In case the joint property is a dwelling house, one can retain the house, and other can be compensated monetarily.

Financial settlement during the divorce

Financial settlement during the divorce

A marriage is a union of two people for the rest of their lives. However, it may jeopardise when a couple decides to call it quits. Though the emotional loss is something one can live with, the reality of financial loss after being alone is something one lives with forever.

Sometime back we were approached by a lady. Her husband had left her and their only son in the United Kingdom. He later came back to India and remarried.

The lady sought financial settlement advice. We represented her in the financial settlement during the divorce proceedings. We obtained all the details of husband’s Indian properties and made a report which was accepted in the UK court.

The report included original property papers from the revenue authorities and a calculated share of each owner. We also translated the documents to English from the vernacular language as it is necessary in case the records are not in the official language.

The wife and son later got 50% share in all the properties belonging to her husband.

Following are a few things to ask yourself before reaching a smart divorce settlement:-

Where are your Financial Records?

After a divorce, in most cases, the wife is financially naive and therefore gets a raw deal. In a marriage, the husband often takes care of household financial matters, even if the wife is also earning. Thus both the partners must keep accurate financial records, clear titles of all the high-value items in the house. They should credit their salaries/ income into a joint account to run household expenses and also discuss and distribute their finances and financial responsibilities equally from the beginning of their marriage.

What’s your level of awareness?

No single secular law governs marriages in India. There are separate community laws for marriage, and divorce is governed by the particular law under which the union had been registered. However, all the personal laws are superseded in the cases of marriages registered under Special Marriages Act.

Are you practical enough?

No matter how beautiful a relationship was when it ends it ends a mess. Therefore, money matters should be at the centre of the whole process if one wants to get a fair settlement out of a broken marriage. Experts say that one should think financially and act legally to get a fair deal. The best idea is to take the whole process as a business deal, where two partners are going their separate ways.

Do you know your share?

To secure a fair deal at the end of a relationship one must have a bright idea about his/her share before going for a claim in the courtroom. The Indian law does not recognize anything as marital property. A woman can only claim for all the gifts, including land, property, jewellery, and appliances, gifted by her parents or in-laws at and during the time of marriage.

Where are all records and their copies maintained?

One must have the proofs ready as certificates, and other investment details are useful during the divorce case. The documents include:

  • Marriage certificates
  • Tax returns and salary slips for both spouses
  • Bank and credit card details
  • Mutual Funds, Stock and bonds details
  • Powers of attorney Document
  • All big-ticket purchases records
  • Insurance policies copy if any
  • Outstanding debts, home, car and credit card loans documents.

Finally? Do you know that professional help can make a difference?

Always go for a lawyer for the legal aspects and a financial planner to take care of your money matters. A professional can always get you a better a deal as he/she knows the nitty gritty of the legal aspects. Do consult with the lawyer and financial planner before taking any step of any sort.

How to get divorce without mutual consent in India

How to get divorce without mutual consent in India

Some people fulfil their vows and stay together till death does them part, many don’t. A harsh truth about India is that parents are eager to marry off their daughters to NRIs, assuming these to be better, but not many to these marriages stand the test of time and end up in divorce, and the spouses going their separate ways. NRIs can either file a divorce in India or they can file it in the country that they reside in.

How to get Divorce in India

All the grounds prescribed in the personal laws are available to NRIs and citizens residing within the territory of India alike. Common grounds for Divorce found in Hindu Law and Special Marriage Act, 1954 alike are Adultery, Desertion, Cruelty, unsoundness of mind, etc.

Usually, it is not necessary for NRIs to stay in India till the divorce is finalized, they can execute a Special Power of Attorney (PoA) in favour of another person once the presentation of the plaint has been done. But, in order to give evidence, it is important that the person be present during the proceedings.

How to get a divorce in a foreign country where you reside?

The Indian Legal system does not recognize an Ex Parte divorce, thus, it has to be a divorce by mutual consent.

One can file for a divorce as per the foreign marriage laws prevailing in the country one resides in. After that, a declaration has to be sought in accordance with the Family Courts Act to make the judgement which has been passed by the foreign court valid in India. This declaration can only be sought which has the jurisdiction to try that particular case.

Married in India and Divorced Abroad

Married in India and Divorced Abroad

Does a divorce decree of a foreign court hold good in India?

In any such case, the question of Private International Law becomes pretty evident, where a person may be considered a divorcee in the foreign country, however, the Indian courts do not recognize this decision on the grounds that it is out of the jurisdiction of the foreign court. Thus, the individual may get married again in the other country, but in India, he may be held liable for bigamy. A court in the USA, for example, does have the authority to determine the marital status of the spouse who is a citizen of USA, even though it may not apply to the other non-citizen spouse.

As per the General Principle of Law (Section 13 of Code of Civil Procedure), a foreign decree is conclusive in India on the basis of Res Judicata- that is when a matter has been adjudicated by the court, it should not be agitated again and again- to save judicial time and expense. Therefore, a foreign divorce should be valid in India.

But in exceptional circumstances, such a decree would be invalid in India and some of these circumstances are as follows:

  • When it is granted by a court that does not have jurisdiction under the Indian Law (those courts where marriage was solemnized, where both parties last resided as husband and wife, or where the party that has not filed for divorce applies resides, would have jurisdiction)
  • When one party’s submissions are not taken into account, and an ex-parte decision is given, if the petitioner can prove that the other party deliberately evaded proceedings, such a decision will be valid and binding on Indian courts.
  • When the foreign court grants a divorce on a ground that is not recognized in India such as ‘irreconcilable differences/irretrievable breakdown of marriage’, it is not a valid divorce in India.
  • If both parties are not given the right to be heard in court, it will be violative of the principles of natural justice, and such a decree is invalid in India.
  • If the decree is obtained from fraud or misrepresentation of facts, it is not valid in India.

Therefore, any party may file for a divorce in a foreign country, however, it is the circumstances of the case that will decide whether the decree of the foreign court will be binding on Indian Courts or not. Nowadays, many people have made a mockery of this pious relationship, where it is mostly the woman who faces most grievances. Thus, the Supreme Court in the case of “Neeraja Sharaph vs. Jayant V. Saraph”, emphasised safeguards for such women, and suggested that no marriage between an NRI and an Indian woman that has taken place in India should be annulled by a foreign court etc. However, the implementation of such provisions is still a far-fetched dream for us.

Don’t Worry Honey, Divorcees Get Money

DIVORCEES GET MONEY

Under the Indian law, alimony is the monetary compensation granted to the spouse who is unable to support himself/herself, by the other spouse, during or after the divorce proceedings. When this sum is given during the court proceedings, it is the maintenance amount, and the same term is used in the various statutes such as the Hindu Marriage Act, 1955. After separation the alimony may be taken as a lump-sump or a fixed payment which maybe given monthly, quarterly etc. Civil law such as The Special Marriage Act 1954 and Section 125 Code of Criminal Procedure are the common laws for all, however, The Indian Christian Marriage Act, 1872 and the Indian Divorce Act are applicable to Christians; Shariat Law and Dissolution of Muslim Marriages Act, 1939 and the Muslim Women (Protection of Rights of Divorce) Act, 1986 apply to Muslims and for Parsis, there is a separate marriage and divorce act.

Maintenance is granted only if an application is filed before it, by a man or a woman, and further the discretion lies with it to investigate and decide whether alimony is to be awarded or not. There are various factors that affect the amount of alimony, such as:

  1. The income of the wife if she is earning, will cause a reduction or increase in the maintenance granted by the court.
  2. The living standard of the wife/husband if they are not earning.
  3. If the wife remarries, the husband need not pay any maintenance after that.
  4. If husband is disabled and cannot earn, wife is asked to pay alimony.
  5. The longer the marriage, or the greater number of children and emotional investment, the larger the sum is expected to be.
  6. A spouses’ actions during marriage, such as, adultery, harassment of the other spouse etc affect the amount as well.

Mentioned above are only a few dimensions that are looked into and apart from these, the court sets other tests for amount assumption.

This mandate of the court is subject to change, and so, the amount decided need not be fixed per se. For example, if the husband finds a source of income and the wife is still asked to pay alimony to him, it would be unfair for her. Furthermore, the court also takes into consideration a lawful marriage, and no mistress of unlawful second wife can claim alimony, although children from the second marriage can claim child support.

All maintenance paid is taxable amount and so spouses usually, while paying alimony, deduct this tax amount from the sum that is to be paid to the other spouse as per court order. Further, the amount usually never goes beyond 1/5th of the husband’s income, although in a landmark case in April 2017, the Apex Court ordered a Bengal resident to pay 25% of his salary as ‘just and proper’ maintenance, that will ensure that his wife could lead a dignified life after separating from her husband.