Transfer of MIDC Plot

Maharashtra Industrial Development Corporation (MIDC) allocates plots to businesses for establishing industrial units. Plot holders are required to develop their plots and begin operations within a specified timeframe, which varies across talukas. However, financial or technical challenges may sometimes prevent plot holders from meeting these deadlines. To address such situations, MIDC offers time extensions for plot development, subject to payment of extension fees.

In cases where plot holders face difficulties in running their industrial operations, they may seek to transfer their plots. MIDC has issued various circulars and guidelines regarding the transfer of leasehold rights for industrial plots in Maharashtra. This article outlines the prerequisites for transferring an MIDC plot and details the steps involved in the MIDC transfer process.

MIDC Guidelines for Utilization of Plot

1. Development of MIDC Plot: Development of MIDC Plot covers:

1. FSI Utilization.
2. Development Period.

a. FSI Utilization: Once a plot is allotted, it must be developed within the specified timeframe. Development involves meeting the minimum FSI (Floor Space Index) utilization requirements as per prevailing norms, obtaining the Building Completion Certificate (BCC), and commencing production. MIDC has periodically updated the minimum FSI utilization norms. Notably, through circulars dated 17/04/2012 and 27/11/2020, MIDC revised the FSI utilization guidelines as follows:

b. Development Period:  MIDC has categorized its industrial areas into five classes: A, B, C, D, and D+, with Class A representing the most developed industrial areas and each subsequent class representing progressively lesser-developed areas. The timeframe for development, which includes obtaining the Building Completion Certificate (BCC) after meeting the minimum FSI utilization and starting production, varies depending on the category of the industrial area. As per the circular dated 12/05/2023, the development periods for each MIDC industrial class are as follows:

• If the plot holder fails to obtain the BCC for 20% FSI within the first development period, extension charges will be applicable as per the prevailing policy. In such a case, the plot holder will not be eligible for the next development period mentioned above.
• The plot holder is required to obtain the BCC and commence production within the stipulated development period.

2. Extension of Time Limit:  In the event that plots are not developed within the stipulated development period, MIDC grants an Extension of Time subject to the payment of extension charges. These charges are applicable for a period of one year. As per MIDC circulars dated 06/03/2013, 29/04/2017, and 03/11/2017, the extension charges are as follows:

The pre-condition for getting time extension is the Plot Holder should have taken effective steps for development. Effective Steps cover:

• Provisional IEM Registration.
• MPCB Consent to Establish.
• Building Plan Approval & Provisional
• Fire NOC.Electricity Connection.
• Water Connection.
• CETP Membership.
• Appointment of Architect.
• Appointment of Structural Engineer.
• Appointment of Licensed Plumber.

3. Non-Utilization of MIDC Plot: MIDC allots plots to the industrialist for carrying out their industrial activities. MIDC vide its circular dated 21-06-2019, 27-11-2019 and 02-08-2021 laid down the guidelines for utilization of Minimum 40% FSI on the plot, failing which Non Utilization charges are required to be paid to MIDC. To know the complete details of Non-Utilization charges pleases Click here

However, due to unavoidable reasons, the leaseholder may find difficult to  develop the plot or consume minimum FSI and / or commence industrial activities, . under such circumstances the Plot holder has following options:

1. Hold the Plot and pay the penalty to MIDC.
2.  Sublet the built up area to any 3^rd party with prior concurrence of MIDC.
3.  Surrender the Plot to MIDC.
4.  Sell and Transfer the Lease hold rights of the complete plot to 3^rd Party with Prior concurrence of MIDC.
5.  Sub- divide and sell / Transfer the Lease hold rights of the part of the Plot with prior concurrence of MIDC.

4. Sub Letting in MIDC Plot : If plot holder is unable to utilize the complete built up area so constructed by him, the MIDC allows subletting of plot to any third party subject to prior concurrence of MIDC and payment of subletting charges to MIDC by the plot holder. To know the complete details of subletting in MIDC Plot pleases Click here

5. Surrender of Plot to MIDC : If the Plot holder is unable to utilize the plot allotted by MIDC, the Plot could be surrendered to MIDC. Land Premium paid to MIDC shall be refunded to plot holder after deduction and 5% administrative charges, other pending dues and Extension charges (if applicable).

6. Transfer of MIDC Plot:  The Plot in MIDC can also be transferred to any 3^rd party subject to prior concurrence of MIDC and payment of differential premium to MIDC by the Plot Holder. The MIDC examines the request of the Transferor and Transferee and also checks the project report of the Transferee, and grants its consent, if found in order.  The MIDC normally allows transfer of the plots only after the development on the plot has been done and BCC is obtained. However, in certain cases, the Open Plot are also allowed to be transferred in MIDC. The MIDC has laid down its guidelines for transfer of plots and issued various circulars. The steps for transfer of MIDC Plot are as under:

  Following documents are required to be submitted to MIDC for transfer of Lease hold rights

(a).Transferor:-

1. Request Letter to MIDC
2. Board Resolution (If Pvt. Ltd.)
3. Indemnity Bond for Labour & Statutory dues
4. NOC from Financial Institution (if Property is mortgage)
5. C.A. Certificate (if Pvt. Ltd.)
6. Online Application for transfer of leasehold rights
7. Form “A” & “B”
8. Up to date paid Water bill
9. Up to date Lease Rent Receipt
10. Up to date paid  Property Tax bill

(b).Transferee:-

1. Request Letter to MIDC
2. Board Resolution (If Pvt. Ltd.)
3. MIDC Transfer Application (White Application)
4. MOA & AOA with Certificate of Incorporation (if Pvt. Ltd.) / Partnership Deed (If Partnership Firm)
5. C.A. Certificate (if Pvt. Ltd.)
6. Detailed Project Report
7. Indemnity Bond for Labour & Statutory dues

The MIDC has delegated the powers for transfer to its various officers. To know the details Click here

Transfer Charges payable to MIDC: The MIDC charges the Differential Premium for the transfer of the plot from the Transferor to the Transferee which is as under:

1. Transfer of Developed Plot: As per its earlier guidelines the MIDC used to charge Differential Premium (@ 10% of the prevailing MIDC Rate) for the plots which were developed by utilizing the minimum stipulated FSI.
2. Transfer of Open Plot:  As per MIDC circular dated 19/11/2013 open plots can be transferred after completion of 5 years from the allotment date. MIDC grant the permission for transfer of plot after scrutiny of the application and payment of required Extension charges (if required) and Transfer (Differential) Premium to MIDC. Differential premium @ 30% is applicable for transfer of open plot.
3. Revision of Transfer charges as per utilization of FSI: As per circular dated 22/11/2023 MIDC revised the guidelines for charging of differential premium on the basis of FSI:
   
   Plot allotted before 21/06/2019:
   i. 10% Differential premium if 20% or more FSI if consumed.
   ii. 30% Differential premium if less than 20% FSI is consumed.   
   
   Plot allotted after 21/06/2019:
   i.10% Differential premium if 20% or more FSI is consumed in original development period.
   ii. 30% Differential premium if less than 20% FSI is consumed in original development period.
   iii.10% Differential premium if 40% or more FSI is consumed in next 2 years after expiry of original development period.
   iv. 30% Differential premium if less than 40% FSI is consumed in next 2 years after expiry of original development period.   

Sub-division and Transfer of MIDC Plot

All activities for Sub division and transfer of the Plot would be same as the case of transfer of Plot mentioned above in this document except for additional requirement of submission of proposed sub-division plan for the approval by  MIDC.

The Flow Chart placed below represents the Transfer Procedure of MIDC Plot in details:

Note: The entire process takes about 2 – 3 months for completing the MIDC Land Transfer Process.

Analysis by ASCC

• The policies are designed to balance the industrial growth with effective land utilization while providing flexibility for plot holders facing challenges in development.
• MIDC has a structured policy for plot utilization and transfer, aiming to ensure that industrial plots are used effectively.
  Plot holders have to adhere to the stringent development norms of timely utilization of stipulated FSI.
• Plot holders have to adhere to the stringent development norms of timely utilization of stipulated FSI.
• Granting extension of time limit is not automatic. The Plot holders are required to put up the case for extension of time which invariably gets delayed for months in HO.
• Several alternatives are available for plot holders who are unable to meet development requirements i.e. subletting, surrender, transfer, subdivision and transfer etc .
• Transfer of plots is regulated through a detailed process, including payment of differential premiums based on FSI utilization and development status. The cases for subdivision / transfer for bigger plots do get delayed in MIDC. MIDC should delegate more powes to ROs.
• We strongly feel that the first and second time extension charges demanded by MIDC for “A”, “B”, and “C” category industrial areas (i.e., 25% and 40%) are on the higher side and need to be reviewed. It is suggested that MIDC should simplify its norms for charging of penalty and charge extension fees @ 10% for “A”, “B”,and “C” category of industrial areas and charge 5% to “D” and “D+” category industrial areas irrespetive of having variation in the penalty. Granting of extension of time limit upto 5 years should be automatic instead the plot holder is asked to put up the case.
• MIDC also charges penalty for non submission of plan within one year @ 10% as per its circular dated 07/06/2019. The Plot holders who have overlooked the timely submission of plan and also delayed the development within the development period due to EC or some other genuine reasons, are being penalised twice by the MIDC. In certain cases wherein MIDC already granted free extension of time limits for the development, SPAs are still leving penalty for delay in submission of plans to MIDC. The MIDC should review its circular dated 07/06/2019 and stop charging double penalty to the plot holders.
• The MIDC should adopt a more supportive and nurturing approach, fostering a positive environment that helps entrepreneurs set up and operate their industrial units with ease.

Services provided by ASCC for Industrial Land :

1. Assistance in getting a plot from MIDC via Direct Allotment, E-bidding, Priority Allotment, etc.
2. Assistance for Transfer of plot, Sub-letting of plot, Sub- Lease, Sub division and transfer of sub divided plot, etc.
3.  Assistance for Execution of Predetermined Lease, Final Lease and Deed of Assignment.
4. Assistance for obtaining  Extension of time limit from MIDC.
5.  Assistance for Amalgamation / sub division of plots.
6. Assistance for obtaining Building Plan Approval & Provisional Fire NOC
7. Getting Final Fire NOC from MIDC.
8. Assistance for obtaining Building Completion Certificate.
9. Registering LOI and setting up of IT/ITES activity.
10. Assistance for obtaining permission from MIDC for Change of Activity.

Additional Value Added Services (Permits & Licenses) provided by ASCC

1. Advisory and Consultancy for permits & licenses.
2. Preparation of Project Report
3. Registration of MSME & LSI.
4. MPCB Consent to Establish and Operate.
5. Factory Plan Approval and License from DISH if applicable.
6. Petroleum and Explosives License (HSD and other Class A, B, C –Petroleum Products, Chemicals, Gas Cylinder Rules for Canteen/Cafeteria.
7. Contract Labor – Site Registration.
8. MIDC SPA Approvals – Construction Related.
9. Water & Electricity Connection Approvals.
10.  Any other approvals / permits as per requirement of project.

Reach Us at

Ascent Supply Chain Consultants Private Limited (ASCC),
406 Raheja Arcade, Sector-11, CBD Belapur,
Navi Mumbai – 400614, MH – India.
Tel: 022-4897-4888
Email: info@ascc.in