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Pankaj Tyagi
| Updated: 18 May, 2022 | Category: Factory License

MCD Factory License Procedure and Documents

MCD Factory License

Factory Act 1948 came into effect in the year 1940. Since then, it has been serving as the sole regulatory framework for production facilities in India. It mandates production-related facilities to get registered and comply with underlying norms. We will delve into the norms around the MCD factory license. This blog discusses the procedure, eligibility, and document requirements for the MCD factory license.

What is the MCD Factory License?

MCD Factory License falls under the purview of the Delhi Municipal Corporation (DMC) Act, 1957 and Master Plant of Delhi.

Section 416 & 417 of the Delhi Municipal Corporation (DMC) Act, 1957 provides for the obtainment of prior approval of the commissioner in writing for;

  • Business owners looking to set up an establishment or factory that employs electricity, steam, water or other mechanical power
  • Entities intending to augment their present facility

Further, a factory license can be secured for confirming;

  • DDA/DSIDC/DI Built-up Auction/Allotted sheds
  • Industrial area
  • Household category
  • Freehold plots
  • Relocation Scheme
  • Local Commercial Category
  • Subletting of leasehold plots and sheds

Why Registration of factories under the Factories Act, 1948 is a mandate for production facilities?

Registration of factories under the Factories Act, 1948[1] is mandatory because it seeks to;

  • Undermine the mal practices and illicit code of conduct by owners or person-in-charge
  • Put oversight on minor employment
  • Ensure the availability of an eco-friendly environment for the worker
  • Protect Workers’ interest
  • Ensures better hygiene and sanitation within the production premises
  • Compel owners to abide by underlying provisions that preserve everyone’s interest

Checklist to Apply for the MCA Factory License

As per the DMC’s requirements, the applicant is liable to comply with the following conditions before applying for an MCD factory license

  • Production facility present in the confirming industrial region
  • Tenancy Proof: Either rent agreement or property paper, as applicable
  • NOC from Pollution Control Committee
  • Invoices relating to the firefighting equipment

Documents for Directorate of Industries/ DDA/ DSIDC, built-up auction/allotment sheds

1. Copy of the lease deed (non-executed one), auction letter copy, premises tenancy letter, NOC regarding trade

2. Copy of layout plan

3. Firm’s constitution, if any

4. Copy of norms for shed’s allotment

5. Affidavit in Annexure-5

6. A rough schematic reflecting the proposed installation of equipment and machinery

7. List of machinery along with their load rating

8. Copy of production process

Documents for Sub-letting of leasehold Plots/Sheds

1. Copy of the rent agreement or rent receipt,

2. Copy of layout plan reflecting the projected premises of sub-letting and existing/amended area of the actual license holder with measurements, enclosing the signatures of either party.

3. One copy of the key plan and layout plan.

4. Firm’s Constitution, if any

5. Affidavit in the standard proforma Annexure – 5

6. Undertaking in Annexure – 7

7. Owner’s NOC in Annexure-6

8. A rough drawing reflecting the proposed installation of production machinery

9. A list of machinery along with their power rating

10. Copy of production process

Note :

i. The power load available to the premises with an area ranging from 300-500 square feet has been capped @ 20 Horse Power. The load threshold doesn’t exist for premises with an area greater than 500 squares provided they have ample space for machinery installation.

ii. Factory license shall remain unavailable for relocation scheme plots falling under the sub-letting category

Documents for freehold plots

1. Ownership proof of the premises in question

2. Site plan’s copy demonstrating the proposed site and the existing facilities in question

3. Affidavit on Rs 10 stamp paper confirming the legitimacy of the construction. (Note: Affidavit should be as per Annexure – 5)

4. One copy of the key plan of premises in question

5. Firm’ constitution copy, if any.

6. Undertaking the standard proforma as per Annexure – 4

7. A rough schematic demonstrating the projected machinery’s installation along with the list of production machinery with power rating.

8. Copy of production process

Documents for Local Commercial Category

1. Copy of lease deed (non-executed one), auction letter, and ownership letter.

2. Proof of tenancy of the premises in question

3. Copy of provisions that govern the allotment of the premises.

4. One copy of the key plan and site plan.

5. Firm’ constitution copy, if any.

6. Affidavit in Annexure-3

7. Site plan copy reflecting the dimensions

8. One copy of the key plan showing the key features in the neighbourhood site in question in addition to the zonal plan and part schematic plan reflecting the site.

9. Affidavit in Annexure – 5 serves as a declaration that affirms the legitimacy of the construction of premises in question.

10. A rough schematic indicating the proposed installation of machinery

11. List of machinery along with power rating.

12. One copy of the production process

Note: MCD factory license in this category shall be granted only for the establishment allotted for industrial/ commercial use by the Government land-owning agencies.

Note: MCD factory license shall be issued for operating factories on non-multi storey premises. But, in case of permitted flatted production facilities will be conferred to all sanctioned floors.

Conclusion

Registration of factories under the Factories Act, 1948 is a fundamental regulatory requirement. Every production facility that falls under the ambit of the said legislation needs to get registered and follow the underlying norms to stay compliant.

Read our Article:Factoring Regulations (Amendment) Bill, 2020 Introduced in Lok Sabha

Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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