For years, many applicants, builders, and industry insiders have spoken about an unofficial payment allegedly collected during building approval processes in Tamil Nadu. This payment was commonly referred to as PF, Party Fund, or Katchi Nidhi.

According to reports, the alleged amount was said to be collected on a per-square-foot basis from applicants seeking building approvals. The claim is that during the AIADMK period, this amount was around ₹25 per sq. ft., and during the DMK period, it allegedly increased to ₹27 per sq. ft.

The allegation is serious: applicants were reportedly made to believe that approvals would move forward only after this unofficial amount was paid.

Why This Became a Major Concern

Building approval should be based on documents, planning rules, land use, setbacks, road width, FSI, ownership clarity, and compliance with development regulations.

But when unofficial payments enter the system, the process becomes unfair.

A person with proper documents may still face delay.
A person following the rules may still be pressured.
A genuine applicant may lose time, money, and confidence in the approval system.

This is why the alleged PF/Katchi Nidhi practice became a major concern for property owners, builders, developers, and ordinary citizens.

CMDA’s Move Against Red Tapism

The Chennai Metropolitan Development Authority has now issued directions to officials to avoid delays and process applications within prescribed timelines. The circular specifically warns against red tapism, malpractice, favouritism, and misuse of official position.

The direction covers applications related to planning permission, completion certificates, layouts, reclassification proposals, and other approvals. Officials have also been instructed to monitor pending files daily and record valid reasons if any application cannot be processed within time.

This is important because it shifts the focus back to one basic principle: approval must depend on rules and documents, not unofficial payments.

Not Just CMDA: The Issue Affects Town Planning Too

This discussion is not limited only to CMDA. Similar concerns have also been raised in relation to town planning departments and local approval systems across Tamil Nadu.

For many applicants, the approval journey passes through different levels of local bodies, planning offices, and technical scrutiny. If unofficial payments are eliminated across all these levels, it can make the system cleaner and faster.

The real impact will be seen only when the same discipline is followed not just in Chennai, but across planning authorities and local bodies in Tamil Nadu.

What This Means for Applicants

If this change is implemented properly, applicants may no longer need to depend on unofficial channels to move their files.

Building approval should be granted when:

the ownership documents are clear,
the plan follows planning rules,
the required government fees are paid,
the site satisfies road width, setback, FSI, and zoning norms,
and there are no legal or technical defects.

That is how the system should work.

What Builders and Property Owners Should Do Now

Even if red tapism is reduced, applicants must not assume that every file will be approved automatically. Documentation still matters.

Before applying for approval, property owners and builders should check title documents, patta, EC, survey details, land classification, road access, zoning, FSI limits, and approval eligibility.

A clean system helps only when the applicant’s file is also clean.

Verified.RealEstate can assist property owners, buyers, builders, and developers with document verification, land due diligence, approval-readiness checks, and risk identification before major property decisions are made.

Final Takeaway

The alleged PF/Katchi Nidhi system damaged trust in building approvals because it created fear that files would move only through unofficial payments.

If the new direction is implemented strictly, it can be a major step toward cleaner, faster, and more transparent building approvals in Tamil Nadu.

The rule should be simple: if the documents are proper and the plan follows the law, approval should not be delayed.

This process is governed by Section 32(4) of the Tamil Nadu Town and Country Planning Act, 1971 and is applicable only when the existing zoning shown in the Master Plan does not permit the intended use or development.

In simple terms, this reclassification is required when:

• The land’s current planning zone does not allow residential, commercial, industrial, or mixed-use development
• The owner or developer seeks a variation to the Master Plan or DDP
• Building permission cannot be granted unless the land-use zone itself is modified

This is not a patta correction and not a revenue reclassification. It is a formal planning approval handled by CMDA or DTCP through the OnlinePPA portal.

When Is Land Use Reclassification Mandatory?

Land use reclassification becomes unavoidable in situations such as:

• Agricultural or special-use zones proposed for residential or commercial development
• Institutional or industrial use proposed in non-permissible zones
• Projects that conflict with the existing Master Plan zoning
• Large developments requiring zoning conformity before planning permission

Without this approval, any construction or layout approval will be legally blocked.

An Example To Understand Land Use Reclassification

Consider a landowner who holds clear title and patta for a parcel of land located on the outskirts of Chennai. While ownership documents are in order and the land has proper road access, the Master Plan classifies the property as an Agricultural or Special Use Zone.

When the owner applies for building approval to develop residential apartments or a commercial project like warehouse, the application is rejected—not due to ownership issues, but because the existing land use zone does not permit such development.

In this situation, land use reclassification under Section 32(4) of the Tamil Nadu Town and Country Planning Act, 1971 becomes mandatory. Through this process, the planning authority evaluates whether the land’s zoning in the Master Plan can be modified based on site suitability, surrounding developments, infrastructure capacity, and environmental impact.

Only after the land use zone is officially reclassified through CMDA or DTCP—and notified in the Tamil Nadu Government Gazette—can planning permission and construction approvals be legally granted.

Step-by-Step Procedure to Apply

1. Application Submission

The applicant must submit Form 1A (Application for Change of Use of Land) through the prescribed process along with applicable fees.

2. Payment of Statutory Fees

• Scrutiny Fee: ₹30,000
• Newspaper Advertisement Charges:
  • Up to 10 revenue subdivisions: ₹30,000
  • Additional subdivisions: ₹1,000 per subdivision
• Tamil Nadu Government Gazette Notification: ₹5,000

3. Preliminary Scrutiny

Initial verification is done to ensure:

• Completeness of documents
• Basic eligibility for land-use variation

4. Site Inspection

An official inspection is conducted by CMDA/DTCP to assess:

• Physical site conditions
• Access, surroundings, and existing development

5. Public Notification & Objection Period

• The proposed land-use change is published in newspapers
• A 21-day window is provided for public objections or suggestions

6. Detailed Technical Scrutiny

Authorities verify:

• Ownership and title documents
• Patta / TSLR records
• FMB sketches and access details
• Topography and environmental impact

Any missing or additional documents are called for at this stage.

7. Inter-Departmental Clearances (If Required)

Remarks or NOCs may be obtained from:

• Local Body
• Water Resources Department (WRD)
• Tamil Nadu Pollution Control Board (TNPCB)
• Tamil Nadu Housing Board (TNHB)
• Other relevant authorities, based on site conditions

8. Technical Committee Review

The proposal is placed before the Technical Committee for evaluation.

9. Authority Approval

Based on recommendations, the matter is placed before the Planning Authority for final decision.

10. Gazette Publication

Once approved:

• Variation notification is published in the Tamil Nadu Government Gazette
• Re-publication is done as per statutory rules

Only after this step does the land-use zone officially stand reclassified.

List of Documents Required

Applicants must submit the following:

1. Form 1A – Application for Change of Use of Land
2. Ownership Documents – Sale Deed / Title Documents
3. Patta / TSLR Extract
4. FMB / TSLR Sketch and Combined FMB / Block Map with Access Road
5. Key Plan, Site Plan & Topography Map (500 m radius) with GPS coordinates

Incomplete or inaccurate documentation is one of the main reasons for delays or rejection.

Why Reclassification Is Often Delayed or Rejected

Common issues include:

• Incorrect zoning assumptions
• Access road deficiencies
• Overlapping government land or water bodies
• Environmental or infrastructure conflicts
• Inconsistent revenue and planning records
• Poorly prepared plans and technical submissions

This is where most individual applicants and developers struggle.

Verified Real Estate Makes This Process Hassle-Free

Land use reclassification under Section 32(4) is the gateway approval for any development that does not conform to the existing Master Plan.

Handled incorrectly, it becomes a bottleneck.
Handled professionally, it becomes a clear path to legally compliant development.

A single call to Verified Real Estate can save months — sometimes years — of regulatory struggle and uncertainty.

Verified Real Estate (VRE) simplifies this entire journey by:

• Conducting pre-checks on zoning, access, and planning feasibility
• Verifying patta, FMB, TSLR, and ownership consistency
• Coordinating planning drawings, topo maps, and GPS surveys
• Managing authority coordination, objections, and compliance
• Ensuring end-to-end tracking until Gazette publication

With VRE, applicants avoid trial-and-error and move directly through a structured, compliant, and time-efficient reclassification process.

New Norms for Layout Approvals

A government order issued by the housing secretary announced the reduction of the minimum road width from seven meters to 6.5 meters in towns and to six meters in village panchayats. This change will be implemented by amending the Tamil Nadu Combined Development and Building Rules of 2019. However, for residential layouts in the Chennai Metropolitan Area, peri-urban village panchayats, municipal corporations, and municipalities, the road width requirement will remain at seven meters.

Historical Context and Recent Developments

This decision follows a review meeting held under the housing minister on August 31 of the previous year. During the meeting, it was noted that many of the 27,690 unapproved layouts regularized since the introduction of the regularization scheme on May 4, 2017, had road widths of less than seven meters. As these roads serve as access routes for newly formed layouts that comply with the required road width, delays in obtaining planning permissions for both old and new layouts were common.

In response, the Director of Town and Country Planning (DTCP) proposed an amendment to the Tamil Nadu Combined Development and Building Rules, 2019, to address this issue by adjusting the road width norms for access roads.

Implications for Rural Housing Development

Rama Prabhu, Chairman of the Builders Association of India DTCP Committee, praised the new regulations, noting that they would provide substantial relief to regularized layouts that previously could not secure planning permissions due to road width constraints. He highlighted that this adjustment would promote growth in the housing sector, especially in rural areas.

Conclusion

This initiative underscores the government’s dedication to facilitating housing development and improving the efficiency of the planning permission process. By relaxing road width norms, the state aims to support the expansion of the housing sector and ensure smoother processing of planning approvals, benefiting both urban and rural communities.