What is MCD Factory License?

MCD Factory License FAQs

Q1. What is a “FACTORY” under the Factories Act, 1948?
Ans. Premises engaged in the “manufacturing process” employing 10 or more workers
with the aid of power or, 20 or more workers without the aid of power will
constitute a “factory”.

Q2. What is the meaning of “manufacturing process” under the Factories
Act, 1948?
Ans. “Manufacturing process” is defined under section 2 (k) of the said Act. Any
process for making, repairing, packing, pumping, printing, cold storage, etc. is
a manufacturing process.

Q3. Whether a “factory” license is required under the provisions of the
Factories Act, 1948?
Ans. Yes. Running a “factory” without registration and grant of license is a
punishable offense (One Lakh fine or Two Years imprisonment or both as per
section 92 of the Factories Act, 1948).

Q4. Who is required to obtain a license?
Ans. A person who runs a “factory” either on owned or rented premises shall be the
“Occupier” and requires to obtain a “factory” license.

Q5. Who can be an “Occupier” of a factory and apply for a license?
Ans. Proprietor/Partner/Director/Nominated Govt. Officer of a factory can be an
“Occupier” as defined under section 2(n) of the Factories Act, 1948 and can
apply for a license. No other person can be treated as an occupier for the purpose
of granting the license.

Q6. Whether a “factory” license under the Factories Act, 1948 is mandatory
apart from the MCD factory license?
Ans. Yes. If your premises satisfies the definition of “factory” mentioned at
Question No. 1 above, then license under the Factories Act, 1948 is
mandatory.

Q7. Is there any restriction to obtaining a license?
Ans. Yes. The license can be granted to an occupier of a “factory” situated only in
conforming industrial areas of Delhi. However, “Public Utility Services”
such as Petrol Pumps, CNG Stations, DTC Depots, etc are granted licenses
irrespective of their locations.

Q8. Can the license of a “factory” be granted in non-conforming
industrial/residential area?
Ans. No. Factories cannot run in non-conforming/residential areas of Delhi as per
the directions of the Hon’ble Supreme Court.

Q9. How to obtain an online license?
Ans. An occupier of a factory is required to obtain a Licence under the provisions of
Rule 4 of the Delhi Factories Rules, 1950. The occupier is required to get
himself registered through the “Citizen Registration Form” available at e-District
Delhi portal. He has to log in to the e-District Delhi portal and select the service of
“Registration and Grant of Licence under the Factories Act, 1948” and fill up
“Service Specification Details” and upload necessary documents and pay
an online auto-calculated fee by the system.

Q10. For how many years license can be applied?
Ans. The license can be applied for one, five, or ten years.

Q11. Whether any fee is required to be paid?

Ans. Yes, the fee is payable online as per the Schedule appended below as per Rule 5 of the
Delhi Factories Rules, 1950:-

Q12. Whether the fee paid for obtaining a license refundable?
Ans. No. The fee once paid shall not be refunded under any circumstances.

Q13. What are documents required to be uploaded?
Ans. The following documents are required to be uploaded:-

• ID proof of Occupier and Manager.
• List of Partners/Directors with their residential address.
• NOC from other partners or Board Resolution by Directors for the nomination
  of the occupier as per sections 2(n) and 7 of the Factories Act, 1948.
• Proof/supporting documents of Occupier as Director/ Partner/ Proprietor
  of the factory.
• Existing building plan in PDF format as per Rule 3A of the Delhi Factories
  Rules, 1950.
• The latest electricity bill is proof of the sanctioned load of electricity.
• Proof of occupancy (copy of rent agreement/ownership proof i.e.
  conveyance deed).
• Flow chart of the manufacturing process.
• List of raw materials used in the manufacturing process.
• List of machinery installed on the premises.
• Such other particulars as the Chief Inspector/Director (ISH) may
  require.

Q14. What is the procedure followed by the Department in granting licenses?
Ans. All online applications are scrutinized and in case of any defect, the same will
be communicated to the applicant online, pointing out the defects.
If the application is complete in all aspects, the factory premises shall be
inspected to adjudge suitability for registration and grant of license. If the factory
conforms to the statutory requirements, the license will be granted within a
month.

Q15. What is the validity of the license granted?
Ans. The license will be valid for one or five or ten years as per the application form
and the date of grant of license.

Q16. Is there any time limit to rectify/reply in case an application is submitted by
the applicant was found incomplete?
Ans. Yes. In case any document, information is sought from the applicant, within
03 days the reply along with required documents should be uploaded by the
applicant. Otherwise, the application shall be rejected and the fee shall be
forfeited.

Q17. Whether online application for a grant of the license can be rejected?
Ans. Yes. If the information provided by the applicant through “Service
Specification Details” of the online service is found to be incorrect and cannot
be rectified within the stipulated period, his/her application shall be rejected.
In such a case, the license fee shall be forfeited. Hence, the applicant has to be
very careful while filling out the online “Service Specification Details”.

Q18. Once rejected, whether the application can again be submitted for
obtaining license?
Ans. Yes. An applicant can apply afresh by depositing auto-calculated license fees
again through the online system. A new reference number will be generated.
Please ensure that the defects pointed out earlier, on which the application
was rejected, have been rectified before submission of fresh application.

Q19. Can a license be surrendered? Is it mandatory?
Ans. Yes. It is mandatory to surrender the license, if the factory is closed
(permanent/temporary), or shifted out of Delhi. The license can also be surrendered
if no. of workers employed is reduced to less than 10 in the past 12 months.
For further details please refer FAQ regarding the de-registration and closure of the factory.

Q20. What are the bare minimum requirements to obtain a license?
Ans. The factory should be located in a conforming industrial area of Delhi and
an alternate emergency staircase should be available on the factory premises.
The manufacturing process as defined under section 2(k) should be carried out on
the said premises.

Q21. Whether the license will be sent by post?
Ans. No. A digitally signed license can be downloaded from the dashboard of the
applicant.

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