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Breif Overview On Model Tenancy Act

It is not wealth I seek, it is not fame that I want, I crave for a home expressing the eternal yearning of all living beings for habitat." -- Rabindranath Tagore

Though the Union Cabinet has followed measures within side the Model Tenancy Act, 2021 (hereinafter the 'Act') which is reputedly purposed at shrinking delays in resolving landlord-tenant disputes, but maximum obvious is the omission of the world over the well-known device of dispute decision, i.e. mediation.

The Model Tenancy Act, 2021 changed into authorized through the Union Cabinet on 2 June 2021 for adoption through the states and the Union Territories. The Act offers a three-tier quasi-judicial dispute decision mechanism as:
  1. Rent Authority,
  2. Rent Court, and
  3. Rent Tribunal.
As in keeping with the Minister of State within side the Ministry of Housing and Urban Affairs, the Act objectives to offer fast dispute decisions thru mechanisms along with the Rent Court and the Rent Tribunal. As in keeping with the Minister of State, the Rent Court and the Rent Tribunal shall "endeavor" to do away with the instances within 60 days, and in instances of being put off, the motives for putting off are mandated to be recorded in writing.

But there may be nevertheless a large chew of the populace in India this is seeking out easy solutions as opposed to pursuing a felony war within side the Court. Do we actually need to create greater courts and tribunals amid the growing backlog of instances and our lack of ability to fill the present vacancies within side the roster for judges?

The solution to this query isn't always straightforward The Model Tenancy Act, 2021 is to set up Rent Authority to modify renting of premises and guard the interests of landlords and tenants, and offer a speedy, adjudication mechanism for the decision of disputes and subjects related therewith or incidental thereto.
  • Its goal at developing a vibrant, sustainable, and inclusive apartment housing marketplace withinside the country.
  • It will allow the advent of ok apartment housing inventory for all profit agencies thereby addressing the difficulty of homelessness.
  • It will allow the institutionalization of condominium housing with the aid of using step-by-step transferring it towards the formal marketplace.

According to the United Nations Population Fund (UNFPA), India has the largest population of adolescents and young adults and India will continue to be one of the countries with the youngest population in the world until 2015. 2030. India is expected to have an additional 416 million urban residents. by 2050.

According to the National Population Commission (NCP) of, 38.6% of Indians (600 million) will live in urban areas by 2036. Most young people in India will be in their career and career years. purchasing power will be limited. With property prices skyrocketing in urban areas, the demand for rental housing will only increase in the future. With the increase in demand for rent for units, there is a high probability that there will be an increase in disagreements and disputes.

Even aleven though the Act has its benefits, it may not extinguish the doubts or apprehensions of tenants and landlord's vis-a-vis the dispute decision technique. Majority of humans in India decide on now no longer to take the felony recourse due to the postpone withinside the decision-making technique and the litigation expenses involved.

The quantity of pending instances withinside the Courts in India does now no longer gift an encouraging image for tenants and landlords alike to be able to pursue a felony action. The Act may want to have extinguished those apprehensions via way of means of presenting for truthful dispute decision technique. I trust this ought to had been withinside the shape of a obligatory mediation consultation because the first step of dispute decision.

This might had been in keeping with the judgment of the Supreme Court within side AfconsInfrastructure Ltd. v. Cherian Varkey Construction Co[1]. The Supreme Court in Afcons highlighted that there are sure classes of disputes which can be appropriate for alternative dispute decision approaches which incorporate disputes among the owner and the tenant.

The Supreme Court of India in Hameed Kunju v. Nazim[2] said that the item of all hire legal guidelines is to offer for the fast decision of disputes among the owner and the tenant. The Court diagnosed the significance of fast decisions of such disputes. Despite those judgments via way of means of the Supreme Court of India, the Act fails to offer for mediation as a style of dispute decision.

If mediation because the first step might had been furnished for the within side the Act, the Act might now no longer only be in keeping with the tips of the Supreme Court of India, it might have additionally lent assist to India in its adventure of completely understanding the capacity of mediation as a mainstream technique of dispute decision.

The Model Tenant Act, 2021 was introduced by the central government after the cabinet passed on June 2, 2021, to deal with rental housing problems in India, but it could also catalyze the market. real estate and, at the same time, provide a more accessible housing market for both owners and tenants. The real estate market in India is worth nearly $120 billion, contributes 7% of the GDP, and provides jobs for more than 5 million people.

Legislation can also help advance the government's mission of providing "housing for all" while making it affordable. The main purpose of the law remains to resolve disputes between landlords and tenants by clearly demarcating the rights and obligations of landlords and tenants, minimizing disputes, and providing prompt resolution. in the event of a dispute. These measures can also alleviate landlords' worries that their property could be purchased by tenants because current rental standards favor tenants, making evictions lengthy and tedious. bland.

Historical Perspective
The Rent Acts are welfare legislations and fulfill the twin purpose of protecting tenants from frivolous evictions and immoderate rents. the primary Rent Act within the UK was "The Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915 and was enacted to deal with the scarceness of accommodations caused by the primary World War[3]. It prevented landlords from profiteering and exploiting tenants once housing demand exceeded supply.

In British India, the first Rent Act was enacted for Mumbai in 1918[4]and thenceforth singly in Calcutta[5] and the national capital in 1920[6]. Meanwhile, the Transfer of Property Act, of 1828 [7]operated in the remaining part of the British Republic of India. Thereafter, once virtually decades, Rent Acts were enacted in numerous components of the country to deal with the scarceness of accommodations and soaring rents caused by the Second World War[8].

Life was deemed necessary so as to allow protection to the tenants who would have otherwise been thrown out on the slightest pretext or perhaps with no pretext and would be rendered homeless inflicting them with much misery. After India earned independence, fresh-shaped States continued the protection extended to tenants, as newer problems had emerged, even if the wars had terminated Industrialization, development , and flow of population to the urban areas, gave ample chance to landlords to use tenants and led to the enactment of the Rent Acts that were primarily tenant-driven[9].

Rack transactions and large-scale eviction of tenants below the pretense of the normal law, exacerbated those conditions creating the economic lifetime of the community unstable and insecure[10]. The Rent Acts passed by numerous State Legislatures drastically curtail the landlords' power to reinforce rent and evict the tenant[11].

After the residency is determined, tenants attain the standing of "statutory tenants" and revel in protection from eviction until a decree for eviction is passed below the restricted grounds per the Rent Act. Lot of so, the power of the courts to direct eviction is strictly confined to the grounds enumerated under the Rent Act.

The Rent Court isn't competent to pass a decree for possession either in invited or with the consent of the parties on a ground that dehors the Act or ultra vires the Rent Act i.e. the existence of 1 of the statutory grounds is a sine qua non to the exercise of jurisdiction by the Rent Court. Even parties cannot by their consent confer such jurisdiction on the Rent Court to try to do one thing that, per the legislative mandate, it couldn't do.[12]

Important Provisions
As the Model Act will be a guiding beacon to States and may lead to enactment of new Rent Acts, it is apposite to examine its salient features�

The original Act had three stated purposes[13], first, to establish a Rental Authority[14] to regulate tenancy, second, to protect the interests of landlords and tenants, and third, to provide an expeditious arbitration mechanism for the resolution of related disputes and litigation.
  1. Dispute redressal framework
    The law provides a three-tier mechanism for dispute resolution; The rental agency is at the bottom, the rental court is in the middle, and the rental court is at the top. a property manager[15] and a dispute over withholding essential supplies or services.[16]The Rents[17] Court in turn hears appeals against the Rental Authority orders[18].

    The Tenancy Court[19] at the top of the hierarchy will hear appeals against orders issued by the Rental Court. The jurisdiction of a civil court to deal with any case or proceeding involving the model law has been excluded. is a welcome step as the burden of rental disputes on the legal system will be reduced.[20]
  2. Rent Authority
    An officer not below the rank of Deputy Cashier shall be the person with the leasing authority in his or her jurisdiction. It will have many of the same powers as the Tenancy Court and will be the first point of contact for tenants and landlords. The agency will receive a rental application, which is required by law. He is also responsible for setting up a digital platform where the rental form must be uploaded for a limited time.
  3. Creation of a Rent Court and Rent Tribunal at the district level
    The Rent Court is the number one supply of attraction anyhow of dispute included below the act. It is ruled with the aid of using an Additional Collector Additional District Magistrate or an officer of equal rank. The Rent Tribunal is the secondary supply of attraction in instances in which the petitioner isn't happy with the Rent Court. It is ruled with the aid of using a District Judge or Additional District Judge.

    The powers of the hire courtroom docket and tribunal courtroom docket are at par with the civil courtroom docket regarding the subjects touching on the act, barring the civil courtroom docket from pleasing any plea concerning subjects touching on the hire courtroom docket and hire Tribunal. The powers of a hire courtroom docket/tribunal encompass dispute settlement, eviction, and safety from eviction, in addition to enforcement of its orders with the assistance of police and nearby administration. Most disputes should be resolved within sixty days, with the reason for the put-off furnished if it exceeds the time limit.
  4. Limited Security Deposit and No Cap on Rent Increase
    A security deposit limited to a maximum of two months' rent for residential homes and six months' rent for commercial properties, to be submitted to the Rental Agency. There is no limit to a rent increase, although it is governed by the terms of the agreement, and the landlord must give three months' notice of any such increase.
  5. Limited Security Deposit and No Cap on Rent Increase
    The tenant must leave the premises at the expiration of the agreed term, if this is not renewed or if the tenancy is terminated pursuant to a notice or order issued as required by law. Failure to do so will result in a penalty of:
    1. Twice the monthly rent for the first two months, and
    2. Four times the monthly rent thereafter until the tenant continues to use the premises.

    Tenants will be evicted from their premises if they have not paid the rent and other fees due in full for two consecutive months, including late payment interest. specified in the tenancy agreement for a period of one month from the date of service of notice demanding payment of such rent and other fees payable to the landlord in the manner set forth in subparagraph ( 4) section 106 of the Transit Act 1882. It should be mentioned that a tenant cannot be evicted in the event of force majeure, even if the tenancy is coming to an end. In the event of the owner's death, these rights and obligations will be transferred to their legal heirs.
  6. Failure to Pay Rent and Eviction
    The tenant must leave the premises at the expiration of the agreed term, if this is not renewed or if the tenancy is terminated pursuant to a notice or order issued as required by law. Failure to do so will result in a penalty of:
    1. twice the monthly rent for the first two months, and
    2. four times the monthly rent thereafter until the tenant continues to use the premises.

    Tenants will be evicted from their premises if they have not paid the rent and other fees due in full for two consecutive months, including late payment interest. specified in the tenancy agreement for a period of one month from the date of service of notice demanding payment of such rent and other fees payable to the landlord in the manner set forth in subparagraph ( 4) section 106 of the Transit Act 1882. It should be mentioned that a tenant cannot be evicted in the event of force majeure, even if the tenancy is coming to an end. In the event of the owner's death, these rights and obligations will be transferred to their legal heirs.
  7. Subletting:
    There is a prohibition on subletting or transferring the tenant's rights in the premises except by entering into a supplementary agreement and submitting information to the Rent Authority.[21]
  8. Limited period tenancies:
    Tenancy agreements signed after the entry into force of the model law will be fixed-term tenancies, valid for a period of time agreed between the landlord and the tenant[22]. After the end of the lease period, the landlord has the right to own the premises without proving any reason according to the provisions of the rental law.

    Thus, the owner's ingrained fear of losing control of the property is removed. during the period of tenancy, if the landlord wants to evict a tenant, the broad grounds for eviction have been enumerated under Section 21(2) and are:
    1. Non-Payment Of Rent;
    2. Sub-Letting Without Landlord's Consent;
    3. Misuse Of Premises[23];
    4. Repair, Reconstruction Or Ancillary Purposes Which Cannot Be Done Unless Tenant Vacates The Premises;
    5. Repairs, Construction Or Ancillary Purposes For Change Of Its Use As A Consequence Of Land Use By The Competent Authority;
    6. Landlord Having Contracted To Sell The Property After Having Received A Written Notice To Vacate The Premises From The Tenant Or Having Taken Any Other Step; And
    7. Tenant Having Carried Out Structural Change Or Erected Any Permanent Structure Without The Landlord's Consent.
    It should be noted that the real need of the landlord or his family members as a basis for eviction in the tenancy law is not available in the model law. The same applies only to the legal heirs of the landlord upon his death.[24] If a tenant delinquency after the lease period has expired, he or she will have to pay the landlord's increased rent to the landlord. at double the monthly rent for the first two months and then at a fee of four times the monthly rent until it continues to be inhabited. [25]However, if the lease expires in the event that " force majeure", the contract will continue until one month after termination.[26]
  9. Time-frame
    The Model Law provides for the expeditious handling of cases and stipulates that the Rental Authority, the Rental Court and the Rental Court must deal with cases brought before them within sixty days, if not reasons should be documented in the event of non-compliance.[27]
  10. Heritability
    The Model Act leaves no room for ambiguity and clearly stipulates that the tenancy shall be hereditary and that in the event of death the heirs of the landlord and the tenant shall be bound by the rights and obligations of the tenant. the remainder of the tenancy period[28].
  11. Rent
    Rent payment and review will be subject to the terms of the lease.[29] If the landlord makes improvements, additions or structural modifications to the premises that do not include necessary repairs, the landlord may increase the rent in an amount agreed upon by the parties. The concept of "standard rent" or "fair rent" in rental law is not present in the model law. Therefore, the parties are bound by the agreed rental rate during the rental period and the landlord can only ask the Rental Authority to review the rent in the event of a dispute regarding the rent review under the terms of the lease agreement. Article 9 of the model law[30].
  12. Repair and Maintenance
    Frequent squabbles among landlords and tenants concerning duties of restoration and preservation of the premises, withinside the absence of any agreement, have additionally been given a quietus with the aid of using dividing the duties beneath neath Part A and Part B of Schedule I to the Model Act[31]. If the owner or the tenant do now no longer perform their respective duties, the opposite celebration can do it and the fees may be deducted or claimed withinside the way furnished for in Section 15[32].

Existing tenancies
Before analyzing the model law regarding existing leases, it is helpful to analyze the 2015 draft law, which, after undergoing significant revisions, resulted in the model law in its current form, as the project The draft law contains provisions for existing leases. Under the bill, information about existing arrangements must be provided to the Leasing Authority and if no agreement is reached, a written agreement must be made and then made available.

The rent payable in the case of an existing tenancy after the 12-month period is the rent agreed between the landlord and the tenant. If they cannot reach a mutually acceptable rent after the 12 month period, the landlord has the option of terminating the lease. Disagreeing over 12 months' rent is one of the

reasons tenants were evicted under the Measure. Plaintiffs who oppose proceedings under the Lease Act also have the freedom to withdraw the proceedings with the freedom to file new lawsuits on the same subject under the Bill within a certain period of time. As a result, existing leases would be within the scope of the bill for 12 months, and in the event that an agreement cannot be reached between the parties, the landlord could evict the tenant. This will bring great relief to the owners and not subject them to lengthy trials in court.

As for the model law, it governs rentals after the law has come into force, but at the same time, pursuant to Article 47(1), repeals the existing rent laws in the territory of the State and the Union. Section 47(2), which is a limited savings provision, provides that cases and proceedings pending under these laws will continue to be treated as if the applicable law had not been enacted. . As a result, pending proceedings initiated by a landlord or tenant regarding evictions or the establishment of a "standard rent" or "reasonable rent" will continue as a result of the fiction created. by the escape clause.

However, a related question arises as to what will be the fate of landlords and tenants who have not taken any proceedings under the Tenancy Law, i.e. whether the protection of the Tenancy Law continues to be provided to them and whether new proceedings are still necessary must not be initiated. was started under the Lease Act although it was repealed.[33] It is maintained that it is well established that a law, once repealed, is completely repealed.

Revocation cancels all rights and causes of incomplete action that may have arisen under the statute of limitations[34]. However, if a right created by law is permanent and is conferred on a person, then that right cannot be taken away from that person because the law has expired.[35]

In Ambalal Sarabhai Enterprises Ltd. compared to Amrit Lal & amp; Co.[36], the respondent landlord had filed an eviction petition under the Delhi Rent Control Act, 195848 in respect of a premises having a monthly rent of Rs 8625. When the petition was pending, Section 3(c) of the Delhi Rent Control Act, 1958[37] was brought in, which made the Act inapplicable to premises having monthly rent of more than Rs 3500. The question arose, whether the amendment affected pending eviction proceedings.

The Supreme Court observed firstly, that the right of a tenant under the Rent Act at the best could be said to be a protective right which cannot be construed to be a vested right. In view of the enactment of the Rent Act, the rights and remedies available to a landlord under the general law remains suspended but the moment this protection is withdrawn the landlord's normal vested right reappears which could be enforced by him.

Secondly, the landlord has no vested right under Section 14 of the Act but has an "acquired" or "accrued" right if the petition is pending. The Court laid down that in cases where Section 6 of the General Clauses Act, 1897[38] is applicable the courts have to scrutinize whether a person under a repealed statute had any vested right. In case he had, then proceedings would be saved. However, in cases where Section 6 is not applicable, it is not a vested right, but all those under various sub-clauses from (a) to (e) of Section 6 which are "acquired" and "accrued".

In such cases pending proceedings are to be continued as if the statute has not been repealed. A son filing a petition for eviction of the tenant the privilege accrued with the landlord and is thus not affected by the repeal of the Act in view of Section 6(c) and the pending proceeding is saved under Section 6(c) of the Act.

In Parripati Chandrasekhararao v. Alapati Jalaiah[39] an software become filed through the tenant on 13-2-1983 for solving honest hire of a premises whose month-to-month hire become Rs 1300. Subsequently, w.e.f. 26-10-1983 premises having month-to-month hire of greater than Rs a thousand have been exempted from the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960[40].

The Supreme Court concurred with the choice taken through the Rent Controller in brushing off the tenant's software and discovered that the safety afforded through the Rent Act does now no longer create any vested proper in favour of the tenant past the length of safety and whilst the safety does now no longer exist, the everyday members of the family of the owner and tenant come into operation. In Vishwant Kumar v. Madan Lal Sharma[41]again it become discovered that the proper of a statutory tenant to pay hire now no longer exceeding widespread hire or

the proper to get widespread hire constant is a defensive proper and now no longer a vested proper and does now no longer live to tell the tale after the repeal of the Rent Act. In a special authentic scenario, in State of Haryana v. Hindustan Construction Co. Ltd. Fifty-four income tax of the respondent Company become finished for an evaluation 12 months and a refund become ordered below the Haryana General Sales Tax Act, 1973.

Subsequently, the Act become repealed through the Haryana Value Added Tax Act, 2003[42]. After the Act of 1973 become repealed, a show-purpose note become issued to the respondent Company concerning the refund ordered earlier, in the workout of suo motu revisional powers below Section forty of the Act of 1973 and thereafter, through the order the respondent become held accountable for recovery.

The Supreme Court concurred with the High Court and discovered that the evaluation below the 1973 Act having been finished and refund ordered, the workout of suo motu revisional powers below Section forty of the equal after repeal becomes definitely unsustainable in view of the opposite aim expressed below Section sixty-one of the 2003 Act[43], saving handiest pending lawsuits.

It becomes additionally held that Section four of the Punjab General Clauses Act, 1858 will don't have any software in view of the opposite intendment expressed in Section sixty-one of the repealing Act. Thus, in view of the aforesaid decisions, clean lawsuits below the Rent Act can not be desired through the owner or the tenant after its repeal and pending lawsuits on my own could continue, due to the deeming fiction created through the saving clause contained withinside the Model Act.

However, as said supra, the landlords or tenants can are looking for treatment below the overall regulation i.e. the Transfer of Property Act, 1882 as their rights and responsibilities below the overall regulation get revived. Landlords also can input into clean agreements to avail the provisions of the Model Act if the tenants conform to it.[44]

The Judiciary Committee, in its 129th Report filed in 1988, pointed out that the largest litigation cases in municipal courts concern the rental and ownership of urban housing and, if adjudicated, scientifically, it will be a burden on the urban justice system. areas will be significantly relaxed.[45]

In a series of rulings, including Prabhakaran Nair v. State T.N.[46], the Supreme Court finds that landlord and tenant laws must be made reasonable, humane, sure, and expeditious and that the courts should ease the burdened weight of tenancy disputes. Given the prevailing social context, the model law is a step in the right direction as far as new hires are concerned.

By ensuring title recovery and quick resolution of disputes, it puts landlords and tenants on a level playing field and is sure to succeed in providing a huge boost to activity. domestic rental business. By giving first instance and appellate jurisdiction to the Rental Authority and the Rent Court, the model law eases the burden on the courts.

However, when it comes to existing rents, it's a mixed bag. Historically, tenancy laws were enacted at a time of severe housing shortages with the aim of preventing landlords from exploiting tenants.[47] More than half a century later, the situation has reversed and the owners are the beneficiaries. benefit. It is commonly known that due to the prolonged delay in the justice system, tenants are demanding a premium to vacate residential and non-residential housing despite moving to suitable alternative accommodation.

Owners also use muscle strength to reclaim property to avoid a long legal journey. If states adopt the model law verbatim, economically weaker tenants will have reason to rejoice, but existing landlords who have waited decades for new rental laws will be disappointed. . The backlog of tenancy disputes will also continue to weigh on India's court system. However, because the landlord-tenant relationship falls under the list of states in the Constitution[48], the states can modify the model law to suit their socioeconomic conditions.

  1. 2010
  2. 2017
  3. Kemp P., Private Renting in Transition, 2004
  4. The Bombay Rent (War Restrictions) Act, 1918.
  5. The Calcutta Rent Control Act, 1920.
  6. The Rangoon Rent Act, 1920
  7. The Transfer of Property Act, 1882
  8. For instance, The New Delhi House Rent Control Order, of 1939
  9. Liaq Ahmed v. Habeeb-Ur-Rehman, (2000) 5 SCC 708
  10. Nagindas Ramdas v. Dalpatram Ichharam, (1974) 1 SCC 242
  11. D. C. Bhatia v. Union of India, (1995) 1 SCC 104
  12. Nagindas Ramdas v. Dalpatram Ichharam, (1974) 1 SCC 242
  13. See the long title of the Model Act.
  14. An officer not below the rank of a Deputy Collector, appointed under S. 30.
  15. S. 19 of the Model Act
  16. S. 20 of the Model Act
  17. An Additional Collector or equivalent ranking officer appointed under S. 33.
  18. S. 32 of the Model Act.
  19. A District or Additional District Judge appointed under S. 34.
  20. S. 40(1) of the Model Act
  21. S. 7 of the Model Act.
  22. S. 5 of the Model Act.
  23. S. 21(2)(d) broadly defines misuse as encroachment, use of premises which causes public nuisance, property damage, detrimental to landlord's interest or for immoral or illegal purpose.
  24. S. 22 of the Model Act.
  25. S. 23 of the Model Act; Under the Rent Acts, after the termination of tenancy, a tenant becomes a 'statutory tenant' till the time an eviction decree is not passed against him. The same position continues under the Model Act.
  26. S. 5(3) of the Model Act
  27. Ss. 31, 35(2) and 37(2) of the Model Act.
  28. S. 6 of the Model Act.
  29. Ss. 8 and 9 of the Model Act.
  30. S. 10 of the Model Act.
  31. Part A lists repairs to be done by the landlord and Part B lists repairs to be done by the tenant.
  32. Inter alia, a landlord can deduct the expenses from the security deposit and a tenant can deduct the expenses from the rent for the succeeding months.
  33. One of the salient features to the Model Act is said to be its prospective operation and that it would not affect existing tenancies, however as discussed further in this article, the savings clause would be limited in its operation to pending proceedings only.
  34. Keshavan Mahadeva Menon v.State of Bombay, 1951 SCR 228.
  35. M.S. Shivananda v. Karnataka SRTC, (1980) 1 SCC 149 : 1980 SCC
  36. 2001
  37. Delhi Control Act, 1958
  38. General clauses Act, 1897
  39. (1995) 3 SCC 709
  40. Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960
  41. (2004) 4 SCC 1
  42. Haryana Value Added Tax Act, 2003
  43. Section 61, Haryana Value Added Tax Act, 2003
  44. S. 4(6) of the Model Act
  45. 129th Report of Law Commission of India on Urban Litigation � Mediation as Alternative to Adjudication (August 1988).
  46. (1987) 4 SCC 238 , Para 36
  47. Mohinder Kumar v. State of Haryana, (1985) 4 SCC 221
  48. Entry 18 of State List, Schedule VII to the Constitution of India

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