Divorce by mutual consent – how should lumpsum settlement amount be paid

Divorce by mutual consent – how should lumpsum settlement amount be paid

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Me and my wife want to file a joint petition for divorce by mutual consent. But the opposite party is demanding 75% amount out of the lump-sum settlement amount at the time of filling of joint petition itself. Is it possible? And, what is the guarantee of this type of advance payment?

DivorceAnswer: In the case of divorce by mutual consent under Section 13-B of the Hindu Marriage Act, 1955 [since, from your name, you appear to be a Hindu], you have the full liberty of arriving at a mutually agreed lumpsum settlement amount. The court will not intervene in this and the law is silent on this. Both, husband and wife, can agree to the terms of mutual consent divorce, including the settlement amount as the full and final settlement. Again, it is between the two parties to decide by mutual agreement as to how and when this settlement amount is to be paid.

There is nothing in law that prohibits payment of 70% of the agreed settlement amount at the time of filing of the joint petition for divorce by mutual consent. The remaining amount can be paid at the time of the second motion (which is required to be made by both parties not earlier than six months after the date of the presentation of the petition and not later than eighteen months after the said date) when the court records its satisfaction about the fact that the marriage has been solemnized and that the averments in the (joint) petition are true and the court will pass a decree of divorce declaring the marriage to be dissolved with effect from the date of the decree.

However, you may mutually agree for different terms. This is ultimately your own mutual decision. If you find that 70% of the settlement amount at the time of presentation of the joint petition is quite high, then you should negotiate with the other party and try to bring it down. May be, perhaps you may agree for 50% amounts to paid in each of two instalments, or one-third amounts to be paid in 3 instalments (with two such instalments being paid before and after the presentation of the petition and the third instalment being paid at the time of the second motion), or similar other terms.

In any case, you should record a written memorandum of understanding (MOU) between the two parties about the terms of the settlement and preferably it should also be signed by witnesses on the two sides, including witnesses who are neutral to both sides.

The best guarantee in such case would perhaps be the mutual trust or may be the presence of some neutral third party. You can also consider creating an escrow account with some neutral third party (in whom both of you have full trust) and depositing a part or whole of the settlement amount in such escrow account, which will be paid to the wife only at the time of the second motion and which will be returned to you if she refuses to sign at the time of the second motion. So, the terms are your own and the law is silent on these issues.

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