MIDC FSI Utilization - Imp. Notification for all units in MIDC Areas in Maharashtra

Entrepreneurs having their units in MIDC Areas need to pay attention to recent circular issued by MIDC on 2nd August 2021regarding FSI utilisation to ensure optimal utilization of its land.

The plot holders in MIDC are required to construct building, obtain Building Construction certificate (BCC) and commence production within the timeframe stipulated in lease document. The failure to do so entails termination of the lease and repossession of plot after following due process of law. Recently MIDC has repossessed many plots lying vacant for years together.

On 21st May 2019, MIDC issued circular making it mandatory for all the plot holders to consume atleast 40% FSI within two years from 21st May 2019 to ensure that its lands are not properly utilized and the unused land can be resumed back and allotted to needy entrepreneurs. It provided for a) levy of Non Utilization charges @10% of prevailing premium for the unutilized land till the plot holder achieves 40% FSI utilisation and b) for taking back the land in case the plot holder fails to achieve 40% consumption within the grace period of 2 years.

The said circular was kept in abeyance for the plot holders who have taken BCC and are in production.

MIDC on 2nd August, 2021 has issued a fresh circular regarding FSI utilisation to ensure optimal utilization of its land. It stipulates that the time limit of utilizing 40% FSI is extended to 1st July 2022. Thereafter MIDC will initiate a) of recovery of non-utilization charges for a grace period of two years and b) steps for repossession of unutilized land thereafter.The said condition of 40% FSI utilization is not applicable for plot holders who have got Building Completion Certificate (BCC) and have gone into production prior to 21st June 2019.

The other stipulations of the said circular are:

Plot Holders Category Stipulation
Who have gone into production without obtaining BCC and whose FSI consumption is less than 40% Grant extension of time limit with payment of fees as stipulated in circular dated 8.12.2014 & 8.09.2015 and give 90 days time period for obtaining BCC. FSI consumption of 40% will be mandatory within the additional time frame of 90 days or 30.6.2022 whichever is later.
Where land is allotted prior to 21.6.2019 however building plans is pending and time period for plot development is not over It will be mandatory to get building plans approved for 40% FSI consumption, obtain BCC and commence production within period stipulated in circular of 21. 6.2019
Where land is allotted prior to 21.6.2019 however time period for plot development is over after 21.6.2019: Although it was mandatory for these plot holders to utilize 20% FSI, get BCC and commence production, such plot holders will have to utilize 420% FSI, get BCC and commence production within 2 years from the date the development period was over. Failure to do so, will attract action of levy of non utilization charge and repossession of plot

The circular also provides for

  • Levy of non-utilization charges for the balance area of open plot as per the BCC obtained.
  • Refusal of permission for subletting, sublease, sub division, change of purpose to plot holders where plot is allotted after 21.6.2019 and the plot holder has not gone into production and has not obtained BCC for 40% FSI utilisation

Thus, the said circular will have financial implications for units which have obtained land large parcels from MIDC but are either lying vacant or are underutilized.As the MIDC prevailing premium rates have increased over the years, all the plot holders who do not have Building Completion Certificate (BCC) and have not gone into production prior to 21st June 2019 need to initiate steps to ensure that they achieve stipulated FSI consumption of 40% before 30th June 2022 to avoid paying non utilization charges as well as retaining their plots.

At Bizcare, we provide consultancy for all type of MIDC approvals including Land allotment, Plan Approval, Building Completion Certificate, Time limit extension for Construction etc.