Development period and Extension of Time Limit for Industrial Plots of MIDC in Maharashtra

Maharashtra Industrial Development Corporation (MIDC) does allotment of industrial plots to the companies / Firms for setting up their industrial units in the designated industrial area. After allotment of plot one needs to develop and utilise the minimum FSI of plots within stipulated time period given by MIDC. There are set Development norms for MIDC Plots. The MIDC grants 3 to 5 years time period for the development of plots from the date of Possession or Agreement to Lease whichever is earlier which is as follows:

3 Years for “A” & “B” Class Industrial Area.

4 Years for “C” Class Industrial Area.

5 Years for “D” & “D+” Class Industrial Area.

As per earlier guidelines Plot holders were required to develop the plot by utilising Minimum 10% FSI, obtain the Building Completion Certificate and start the production, failing to which the MIDC would charge time extension charges at the rate of 5% per year of prevailing MIDC rate.

However, it was noticed that despite charging time extension charges the plot holders were not developing the plots. Therefore it was necessary to change the guidelines for development of plot and extension charges.

The main objective of this document is to provide Salient features of the various guidelines issued by the MIDC for development of plot & Extension charges.

MIDC Circular No. A71222 dated 6 March 2013 for revision in Extension of Time Limit Policy for Development of plots

The MIDC revised the guidelines for extension of time for development of plots as follows:

Extension of Time Limit for the Earlier Plot Holders:- All plot holders were given last chance  till 31 August 2013 for development of plot by charging Extension charges at the earlier rate of 5% per year. It is also decide to grant another 2 years extension by charging Extension charges at the rate of 25% for the First Year & 40% for the Second Year of prevailing MIDC rates to those plot holders who have taken the effective steps but were unable to develop the plot till 31 August 2013. It was decided to grant no further extension after 2 years and plot would be taken back by MIDC.

Revised Policy for Extension of Time Limit:- It is applicable to New allotted Plots in which possession of plot is not given / Agreement to Lease is not executed, or development period as per Agreement to Lease / Lease is still available. The Extension of time limit only for two years would be granted as under if the plot holder has taken the effective steps:-

1^st Extension – At the rate of 25% per year of prevailing MIDC rates by approval of CEO or Officer appointed by him.

2^nd Extension – At the rate of 40% per year of prevailing MIDC rates by approval of MIDC Board of Directors.

After that no extension of time will be given and MIDC may resume the plot.

The CEO of MIDC was empowered to grant extension of time limit without charging any premium if the Plot Holder was not able to develop the plot due to unavoidable circumstances.

The plot holder was required to take effective steps for the development and submit any of the following 3 documents to support his application of Extension of Time Limit:

1. Proposed building plans should be approved by Dy. Eng./ Ex. Eng./SPA.
2. IEM / Provision IT / BT Registration.
3. Sanction of water connection by MIDC.
4. MPCB Consent to Establish.
5. Sanction of Electricity connection by electricity department.
6. Bank Loan Sanction letter, Financial closer etc.
7. Appointment of Architect
8. Appointment of Structural Engineer

MIDC Circular No. A10809 dated 9 January 2014 for Delegation of Power for granting Extension of Time

As per this circular, the CEO MIDC delegated the power for granting the 1^st extension of time which would be as under:

1^st Extension – At the rate of 25% per year of prevailing MIDC rates.

1. Industrial Plots:-

Up to 15000 Sq. Mtrs. – Regional Officer

15001 to 30000 Sq. Mtrs. – Dy. CEO

30001 Sq. Mtrs. and above – Jt. CEO

       2. Residential & Commercial:-

As per power of allotment of plots

 2^nd Extension – Would continue to be granted by the Board of Directors of MIDC @40% prevailing rates of MIDC

MIDC Circular No. B25785 Dated 29 April 2014 For Amendment in Extension of Time Policy for D & D+ industrial areas

In order to promote the industrialisation of D & D+ zones, the MIDC vide this circular revised its policy and reduced the extension charges for industrial plots in these areas as follows:

1^st Extension :-

A, B, C zone – Would continue @ 25% per year of prevailing MIDC rates.

D & D+ zone – @ 10% per year of prevailing MIDC rates.

 2^nd Extension:-

 A, B, C zone – would continue @ 40% per year of prevailing MIDC rates.

D & D+ zone – @ 10% per year of prevailing MIDC rates.

However, the power for granting the extension will remain same as per Circular No. A10809 dated 9 January 2014.

MIDC Circular No. D47131 dated 8 December 2014 Extension of Time for Units gone into Production without BCC

If the Plot holder after obtaining the plan approval from MIDC and completing the construction could not obtain the Building Completion Certificate (BCC), but gone into the production, in that case MIDC on payment of extension charges as applicable will give the extension of time till commencement of production on the plot or till the date of submission of application (along with all the documents) to MIDC for issuance of BCC.

Vide this circular MIDC changed the policy as follows:-

The Plot Holder would get post facto extension of 90 days free of cost for obtaining the BCC.

If the Plot holder is unable to obtain the BCC in 90 days, extension charges as per prevailing policy would be payable till the BCC is received.

MIDC Circular No. B43425 dated 21 April 2017 for Extension of Time Limit in Exceptional circumstances:-

MIDC vide circular dated 6 March 2013 empowered CEO of MIDC to grant extension without charging any premium due to unavoidable mentioned in the said circular. Vide this circular the MIDC agreed to include following in the unavoidable circumstances:

Delay due to order/ Stay from Hon. Court / National Green Tribunal for particular area.

Non receipt of Environment clearance for their projects. Those plot holders should submit their application to Environment department in stipulated time and also fulfill the objection raised by the Environment department within time. Revised time schedule without charging any premium would be given only for the delayed period in granting NOC by the Environment department.

MIDC Circular No. D90526 dated 3 November 2017 for granting 3^rd Extension of Time for development of plot:-

As per the current policy of MIDC, max two extensions are given for the development of plot after completion of stipulated development time period.

MIDC vide this circular decided to give third extension of time on following conditions:-

1^st and 2^nd Extension will be as per prevailing Extension policy i.e. 1^st Extension will at the rate of 25% for A, B, C & 10% for D, D+ area. 2^nd Extension at the rate of 40% for A, B, C & 10% for D, D+ area.

Extension at the rate of 25% & 50% for two years will be charged for plots allotted for Expansion and under priority category.

If minimum 50% construction as per approved plans is completed (with report of SPA alongwith photographs) in period of two extensions. Another one year extension will be given on charging extension charges at the rate of 5% of prevailing MIDC rates.

To know the Present MIDC Land Rates, Click here

If Construction is completed after taking the three extensions but BCC is not taken. In that case another one year extension may be given on charging extension charges at the rate of 5%. In this period it is mandatory to obtain the BCC and start the production.

This circular is applicable to all allotted plots, plots allotted for expansion or allotment of Plot under priority category and also to every transferred plot.

MIDC Circular No. A10843 dated 8 January 2019 for charging the Extension charges while granting the Extension of Time:-

Plot holders sometimes required extension of time for some moths for completion of construction or starting the production after completion of part construction and obtaining the BCC. Due to current MIDC policy extension is given for one year and therefore plot older unnecessary required to pay extension charges for whole one year for extension of some months. Following amendment in extension policy has been done:

Those plot holders completed the construction and required obtain the BCC from Dy. Eng. / SPA after starting the production or after fulfilling the required documents. Quarterly Extension to those should be given on charging extension charges at quarterly basis.

This quarterly extension charges are applicable to First & Second extension only.

Third and Fourth extension will be given at the rate of 5% for one year.

MIDC Circular No.B88123 dated 07 June 2019 MIDC- Approval of Building Plan within One Year from Possession:

As per this circular the MIDC defined the time period for obtaining Building Plan Approval as under:-

1. Building plan approval for newly allotted plot should be obtained within one year from the dated of Possession of plot. The MIDC will mention this condition in all future Agreement to Lease.
2. Plot holders who have already executed the Agreement to Lease but have not obtained the Building plan approval within one year of possession of plot, they need to obtain it within six months. Revised Agreement to Lease should be executed with incorporating this condition.
3. Plot holders who didn’t take the building plan approval within 1 year or 6 months as mentioned above or those who have started the production on the plot after doing the construction without obtaining the building plan approval shall be liable to pay additional fee @ 5% P.A. on monthly basis till building plan approval is obtain.
4. No extension for approval of building plans shall be given after completion of development period.

MIDC Circular No. C05008 dated 21 June 2019 for revision Development period for plots up to 20,000 Sq. Mtrs.:-

As per this circular MIDC revised the development period of all Industrial / Residential / Commercial plots having area upto 20000 Sq. Mtrs. as follows:

1. 2 Years for A & B class area
2. 3 Years for C class area
3. 3 Years for D & D+ area

Development period for plots above 20000 Sq. Mtrs. will remain same as per previous extension policy.

This circular is applicable to plots allotted from the date of this circular.

MIDC Circular No. C05579 dated 21 June 2019 & D86653 dated 27 November 2019 for utilisation of minimum 40% FSI:-

As per above circulars following amendments as been done:

Those plot holders who have obtained the BCC and gone into production before 21 June 2019. The condition for minimum utilisation of 40% FSI is not applicable to them.

All plots other than above are required to consume minimum 40% FSI with in stipulated time period. Condition of the same should be mentioned in Offer Letter, Allotment Letter and Agreement to Lease.

Units which require more open space for their activity would be exempted from the applicability of this circular subject to taking the remarks from Technical Advisor and planning department and approval of CEO.

Clause for utilisation of 40% FSI should be mentioned in the Agreement to Lease where execution of Agreement to Lease is pending.

To know more about the MIDC Policy on utilisation of FSI please click here

Analysis by ASCC

The MIDC has issued many circulars on the development of plots with respect to FSI Utilisation, Time period, Charges, Zones, Big plots etc. The gist of the current MIDC Policy as compiled by ASCC is as under

Minimum 40% FSI is required to be utilised within stipulated time period. This is not applicable to those plot holders who have taken the BCC before 21 June 2019.

Development period for plots upto 20000 Sq. Mtrs is as under:

2 Years for A & B class Industrial Area

3 Years for C class Industrial Area

3 Years for D & D+ Industrial Area

Development period for plots above 20000 Sq. Mtrs. Is as under:

3 Years for “A” & “B” Class Industrial Area

4 Years for “C” Class Industrial Area

5 Years for “D” & “D+” Class Industrial Area

Development Period for Plots allotted under priority category will be 2 Years.

Extension of Time Limit charges for normal allotment of plots are as follows:

1^st Extension will at the rate of 25% for A, B, C & 10% for D, D+ area

2^nd Extension at the rate of 40% for A, B, C & 10% for D, D+ area.

3^rd & 4^th Extension at the rate of 5% for all the industrial area as per MIDC policy

Extension charges for plots allotted for Expansion or under priority category are as follows:

1^st Extension will at the rate of 25%

2^nd Extension at the rate of 50%

3^rd & 4^th Extension at the rate of 5% as per MIDC policy

CEO MIDC has been empowered to grant extension without charging any penalty for unavoidable circumstances i.e. non availability of infrastructure, stay by the tribunal / court, non receipt of EC etc.

The Plot holders must obtain the approval of building plans within one year from the date of possession to avoid penalty @5% Per Annum.

ASCC as Industrial Consultant

The Purpose of writing this document is to share our knowledge in the form of salient features of various transfer guidelines of the MIDC with the readers. You may kindly go through the relevant MIDC circular to know the complete details or get in touch with our company for guidance if any.

ASCC  is a trusted brand in the industrial consultancy since 2004. ASCC  provides  ONE STOP SOLUTION to all  Industrial real estate requirement and management of compliances. Please get in touch with us in case you have any requirement of Industrial Real Estate (Buy- Sell – Lease) or Management of Compliances.

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