Till Debt Do Us Part: Prenuptial Agreements and the Boundaries of the Insolvency Estate under the Insolvency and Bankruptcy Code, 2016

Prenuptial agreements contractual arrangements entered into by prospective spouses to govern the ownership and distribution of assets upon separation or death occupy a legally contested space in Indian law. Their uneasy coexistence with public policy norms under the Indian Contract Act, 1872, and their outright non-recognition under most personal law statutes renders them vulnerable instruments of asset protection. This paper examines a largely neglected intersection: the fate of prenuptial agreements when one party to such an agreement subsequently enters insolvency under the Insolvency and Bankruptcy Code, 2016. It argues that the broad and functionally expansive definition of the "insolvency estate" under the IBC, combined with the absence of any statutory carve-out for marital property, creates a significant risk that assets purportedly transferred or segregated pursuant to a prenuptial arrangement may be clawed back by the Resolution Professional or liquidator. The paper analyses the preferential and fraudulent transaction provisions under Sections 43 to 51 of the IBC and considers how courts may treat prenuptial transfers made in contemplation of financial distress. Through a comparative analysis of the United Kingdom and the United States of America, the paper identifies legislative gaps in the Indian framework and proposes targeted reforms to bring clarity and fairness to the treatment of marital asset arrangements in insolvency proceedings.