Office Order No. 14/2015

What the office order governs

Office Order No. 14/2015 of the Administration Division of the Chennai Metropolitan Development Authority sets instructions for handling security deposits during the processing of planning permission applications. It covers MSBs, special buildings, group developments and institutional buildings.

The Chennai Metropolitan Development Authority collects security deposits for buildings, sewage treatment plants, septic tanks with upflow filters and display boards. The Authority had resolved to allow bank guarantees in place of cash for certain deposits, while a proposal to amend the Development Regulations was awaiting government approval.

Who is affected

Office Order No. 14/2015 affects applicants seeking planning permission for the listed building and development categories. It also directs Chennai Metropolitan Development Authority staff who process applications, collect charges and release bank guarantees.

Applicants choosing a bank guarantee must account for both the guarantee amount and an advance cash interest payment. Applicants providing a display board deposit cannot use a bank guarantee.

Key provisions

• A security deposit for a building may be provided as a bank guarantee instead of a cash deposit.
• A security deposit for a sewage treatment plant or septic tank with upflow filter may also be provided as a bank guarantee.
• The bank guarantee must cover the security deposit amount and come from a nationalised bank or scheduled bank in the prescribed format.
• The applicant must pay interest at 9 per cent on the security deposit amount, in cash and in advance, for the three year planning permission validity period.
• If the completion certificate has not been obtained and the bank guarantee has not been released, the Finance Division must collect interest until the applicant obtains the completion certificate, before releasing the guarantee.
• The security deposit for a sewage treatment plant or septic tank with upflow filter may be furnished with the 9 per cent interest when the other charges are remitted.
• A display board security deposit must be paid in cash. A bank guarantee is not accepted for that deposit.

Commencement and regulatory status

Office Order No. 14/2015 states that its instructions take immediate effect. At the time it was issued, the Housing and Urban Development Department had been approached for approval to amend the Development Regulations to accept bank guarantees toward security deposits, and government orders were still awaited.