Bharat Diamond Bourse (BDB): Policies and Rules for the Manual Auction of DTC Cabins at BDB complex on Tuesday, 7th April 2015.

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1 Bharat Diamond Bourse (BDB): Policies and Rules for the Manual Auction of DTC Cabins at BDB complex on Tuesday, 7th April A) Auction details 1. Manual Auction Date : BDB is planning to hold auction on 7th April 2015 for giving DTC Cabins on leave and license basis. 2. Area of DTC Cabins : All areas mentioned in this document are in built-up sq. ft. 3. Number of DTC Cabins for auction : 6 DTC Cabins with total built-up area of approx. 740 sq.ft. 4. Inspection of the units : Open until 6 th April 2015 between a.m. to 4.00 p.m. 5. Base license fee (starting bid for auction) : Rs.525/- per sq. ft. per month calculated on built-up area. 6. Earnest Money Deposit (EMD) : Rs.1,00,000/- (Rupees One Lakh only) to be adjusted against Security Deposit per cabin. If the applicant wishes to bid for multiple DTC Cabins at the same time then the bidder needs to proportionately deposit an additional EMD. EMD should be paid on or before 2 April 2015 by Cheque OR through, demand draft, pay order or NEFT/RTGS to 'Bharat Diamond Bourse BID Account' or direct transfer to BDB Account Number Corporation Bank RTGS code CORP ] latest by 6 April EMD paid by the licensee will be adjusted against the security deposit payable by the licensee. Page 1 of 13

2 7. Licensee : Licensee is a person with whom BDB enters into the Leave and License Agreement for giving DTC Cabins on license basis. The leave and license agreement will only be in the name of the Applicant applying for the auction who has to be the Trade Member (Regular or Associate) of BDB on the date of the application or applied to become Trade member/associate Trade member. 8.Leave and License Agreement : Leave and license agreement will be entered into between licensee and BDB subject to necessary documentation and payments are made (as per Schedule-H detailed below). 9. Security Deposit : Interest free deposit equivalent to three month license fee (as determined in the auction) to be paid by the licensee to BDB on signing of the Letter of Intent. Security Deposit is refundable at the end of the leave and license period or on termination of leave and license agreement (subject to deductions for license fee, common area maintenance, utility bill payments and any other applicable charges or taxes not paid by the licensee). 10. Actual license fee : Monthly leave and license fee will be calculated at the highest bid at which the successful auction for the DTC Cabin is closed multiplied by the number of sq. Page 2 of 13

3 ft. (built up area) of that DTC Cabin. 11. Other additional charges payable by the licensee : Common Area Maintenance (CAM) charges (as determined by BDB from time to time), BMC taxes / Property taxes, Utility charges applicable as per actual usage, Service Tax as applicable and any other applicable government taxes (as and when applicable) on actual. 12. Leave and License fee payment cycle : Yearly cheque will be collected in advance along with Security Deposit. 13. Leave and License period : Leave and license period is proposed to be for 3 years from the date 15 th April 2015 with lock-in period of 1 year. The Managing Committee of BDB reserves the right to extend the leave and license period after the end of the initial 3 years period.keys will be handed over post realization of cheque however license fee will start from 15 th April, Usage and occupancy : The license of the cabin is strictly for the purpose for being used for carrying out the legitimate business of diamonds, gems and jewellery. The licensee will not be allowed to sub-let/ underlet/ assign or create any third party right on the whole or any part of the DTC Cabins at any point of time. Winner of the auction should ensure that the entity winning in the auction is the same entity that would be occupying the DTC Cabins. BDB has the right to terminate the leave and license agreement and forfeit the Page 3 of 13

4 security deposit in case the licensed premise is sub-let/ underlet/ assigned or any third party right is created or any unauthorized occupancy is identified. 15. Change in status of the licensee : For the purpose of the licensing of the DTC Cabins, no change in the company, HUF or any other status of the licensee shall be recognized without the previous written consent of the Managing Committee and NOC from MMRDA. Any change in status of the licensee may result in immediate termination of existing leave and license agreement. A new leave and license agreement may be entered for the balance period with the new entity only with prior written approval from the Managing Committee which will be on a case to case basis. Costs for entering into new leave and license agreement including NOC charges of MMRDA will have to borne by the licensee. 1. Any change in status of the licensee may result in immediate termination of existing leave and license agreement. A new leave and license agreement may be entered for the balance period with the new entity only with prior written approval from the Managing Committee which will be on a case to case basis. Costs for entering into new leave and license agreement including NOC charges of MMRDA will have to borne by the licensee. 2. if there is change in partners it is Page 4 of 13

5 mandatory to inform the same to BDB and submit the ROF certificate for the same.further if the partners are only family members then the same will be considered by the Committee. 3. if other than the family members new partners introduced by the firm then it should be informed BDB with submission of relevant document including ROF certificate for the same and the same will be placed before the committee and it will be considered a new entity and new rate for license fees will be applicable as per the decision of committee the said matter will be decided on case to case basis Merger of licensed DTC Cabins : Licensed DTC Cabins will not be allowed to be merged with any other office. 17. Interior works/ fit-out within the licensed DTC Cabins : Licensee will not be allowed to carry interior/ fit-out work within the leave and licensed DTC Cabins 18. Handover of DTC Cabins : On termination / expiry of the Leave and License Agreement, the licensee is required to either hand over the DTC Cabins to BDB in the same physical condition as it was licensed by BDB BDB technical team will inspect the premise and decide over the charges to be paid by the licensee to bring in to the cabin in its original state. Page 5 of 13

6 19. Helpline numbers : For visiting the stipulated premises or for any queries related to this auction, please contact at Member Relations Centre at Phone: or support@bdbindia.org B) Eligibility criteria to participate in auction The applicant should be an existing Regular or Associate Trade Member of BDB. OR The applicant should have applied for Regular or Associate Trade Membership of BDB by 6th April 2015 and the Regular or Associate Trade Membership Application should be in principle approved by the Enrollment/ Managing Committee. C) Regular /Associate Trade Membership Eligibility criteria for Regular/Associate Trade Membership and the Regular/ Associate Trade Membership Form have been uploaded on the BDB website The last date of applying for the Regular or Associate Trade Membership is 6th April 2015 (by 5.00 p.m. IST) to take part in this auction. The Application for the Regular or Associate Trade Membership should be filled in duplicate and sent, along with the demand draft towards Regular or Associate Trade Membership fees and other necessary documentary proof, to the BDB office (Member Relations Centre, GE Tower, BDB, G Block, Bandra Kurla Complex, Bandra (East), Mumbai , India). Notes: (i) (ii) It is incumbent on the applicant to thoroughly examine and inspect the DTC Cabins before the auction. BDB will not be liable for any deviation or change in the offices brought to its notice, after the process for auction is completed and keys are handed over to successful bidder. The License can nit be terminated for such reasons. Further after key handover of the said DTC Cabins and due procedure thereon if any leakage or other damage will occur by any reason then Licensee has to bear all the expenses and for which licensee shall not claim any type of discount in license fees, security deposit or other charges/taxes. The decision to approve the Regular or Associate Trade Membership of all applicants will be taken by the Stakeholders Committee of BDB and their decision shall be binding and final. Page 6 of 13

7 (iii) Post approval of applicants by the Stakeholders Committee all approved applicants will be provided a Provisional Membership number that must be mentioned on the application for participating in the auction. List of approved applicants will be put up on BDB website & notice board for 14 days to invite any objections from existing members. In case of any objections, the Stakeholders Committee will present an opportunity to both parties to present their case and will accordingly decide on the matter. In case the Regular or Associate Trade Membership application is then rejected by the Stakeholders Committee, the applicant s Application for participation in auction will be treated as null and void. No office will be licensed to the rejected applicant even if the applicant is the highest bidder and full EMD amount will be refunded (without any interest). (iv) All participants who have applied for Regular or Associate Trade Membership by 6th April 2015 and have obtained in-principle approval from the Stakeholders Managing Committee have an option to decline the Regular or Associate Trade Membership in case they do not win in the auction. In such case the entire Trade Membership fees will be refunded to the Applicant (without any interest). (v) NRI/ Foreign applicants can deposit the Trade Membership fees through their Indian liaison office. However, the details of payment should reach Member Relation, BDB office along with the application for Regular or Associate Trade Membership by 6th April D) Application for participation in auction Application for participating in auction is available on and Member Relations department. The application form needs to be submitted along with the demand draft/ / direct deposit details for the EMD amount to the Member Relations Centre, GE Tower, Ground Floor, BDB, G Block, Bandra Kurla Complex, Bandra (East), Mumbai , India. Applications for participating in this auction will only be accepted until 6 th April 2015 between 9.30 am to 6.00 p.m. IST. Note: (i) (ii) Note that the application for every DTC Cabins must be submitted separately in a separate envelope along with respective EMD payment through DD/pay order/neft. In case of cheque payment, same should be received by 2 April NRI/ Foreign applicants can apply through their Indian liaison office only. Page 7 of 13

8 (iii) (iv) No interest will be accrued or paid to the applicant on the EMD/or any other payment made by the applicant. EMD amount of the winning bidder will be blocked while EMD amount of all other participants will be refunded to the participants through cheque in INR only drawn on BDB s current bank account. If the cheque towards EMD bounces then Payorder/DD should be submitted at MR before the date of auction. E) Auction format (i) (ii) (iii) The Manual Auction will be held on 7th April 2015 at 4 pm, BDB Admin Office, Conference Room No. 1. Applicants will be allowed to give two preferences per application. Priority will be given to first preference, however, in case the applicant does not win the first preference, he will be allowed to bid for the second and the third preference (subject to the DTC Cabins being available). However, only one DTC Cabin will be allotted to the applicant. Applicant who has won the bid for the first preference will not be allowed to participate in the subsequent bids of the same auction unless he has made a multiple applications. The office premises will be put up for auction one at a time in the order determined by BDB. (iv) Participants will have to register themselves before the start of the auction by 3.30 p.m. (v) Participants who have submitted their application for participating in the auction and have completed the registration formalities will only be allowed to participate in the auction. (vi) All participants will be given numbered placard in the order of their registration - provided participants furnish valid ID Card / trade membership card or authority letter. (vii) Bids will be increased in the multiples of Rs.5/- only. Interested participants will raise their placard if they wish to bid for that DTC Cabins at the going price. Participant raising their placard first will be the winning bidder for that premise at Page 8 of 13

9 the going rate.the decision of office bearer who bids first will be treated as final. F) Auction/ Bidding and leave and license rules The following rules are applicable for the entire auction as well as leave and license process and are binding on all participants without exception: (i) (ii) (iii) (iv) The auction will commence at the specified date and time with the available participants. No exception or late entries will be entertained and the applicant will not be allowed to participate in the auction. In case of any unforeseen exceptional situation auction will be canceled and may be re- scheduled at the discretion of the Managing Committee of BDB. EMD of the highest bidder will be retained while EMD of all other participants (who are not the winner of any premise) will be returned (without interest) within 7 working days from the date of the auction. Within 7 working days from the date of notice of winning the auction, the winner of the auction is required to; a. enter into a Letter of Intent (LOI) with BDB, for taking on license the Cabin, b. submit all necessary documents required for obtaining NOC from MMRDA and c. pay 100% of the Security Deposit, less the EMD already paid on the date of signing the LOI. [Security Deposit to be paid through demand draft / pay order payable to Bharat Diamond Bourse or through RTGS/ Direct credit to BDB Account Number Corporation Bank RTGS code CORP ] Security deposit is refundable at the end of the Agreement period or on termination of the Agreement (Subject to deductions for license fee, CAM, property taxes, utility bill payments and other applicable charges or taxes not paid by the allottee). (v) In case the Highest Bidder does not enter into the LOI with BDB or does not pay the security deposit or does not submit the necessary documents within the stipulated time, notice (via or written) will be sent to the Highest Bidder for entering into the agreement and payment of security deposit within next 2 working days, failing which the EMD amount will be forfeited and the auction for respective DTC Cabin will be treated null and void. Page 9 of 13

10 (vi) (vii) (viii) On signing of the LOI with the licensee and receiving all necessary documents, BDB will apply to MMRDA for obtaining necessary NOC for licensing the office premise. Party (signing the LOI) will be immediately informed (via ) as soon as NOC from MMRDA is obtained which may take 2 to 3 months ). Within 15 days from the date of receiving the NOC, licensee will have to enter into Leave and License Agreement with BDB and register the leave and license agreement with the registrar, failing which the EMD amount will be forfeited and balance security deposit will be refunded back to the party. The keys will be handed over on signing of LOI to the winners and the same date will be considered for all billing purposes. Along with the LOI the winner should submit the security deposit and advance annual license fees Possession of the licensed DTC Cabin for commencement of all operations will be handed over to the licensee only on registering the leave and license agreement with the registrar.. (ix) (x) (xi) (xii) Licensee will have to pay all charges levied by MMRDA and BDB within the stipulated period.and service tax thereon All applicable taxes, charges, fees (such as stamp duty, registration charges, professional fees of registration consultant local taxes, etc.) related to the licensing of DTC Cabins to the licensee will have to be additionally borne by the licensee on or before the due date of making that payment as per decision of managing committee from time to time and applicable to licensee. Common area maintenance, BMC taxes/property taxes, utility payments and any taxes or charges on utility bills will have to be paid by the licensee on or before the due date of making that payment. License fee will be collected as an yearly advance. On failure to pay the license fee/on non-realization of the cheque by the last day of the month (in which the bill was raised) 18% per annum (1.5% compoundedmonthly) along with penalty if any imposed by the Bank will be levied from the first day of the subsequent month until the day of receiving the payment. Page 10 of 13

11 (xiii) (xiv) (xv) (xvi) (xvii) (xviii) (xix) BDB has the right to terminate the Leave and License Agreement without any notice and prohibit the licensee from entering the bourse, in case the licensee defaults in payment of license fee or any applicable charges (including common area maintenance, BMC or government taxes, Property taxes, utility payments and applicable taxes) for two consecutive billing cycles. On termination of the Leave and License Agreement, BDB will deduct all dues from the Security deposit. Any damages or breakages in the cabin shall be recovered from the Security Deposit on termination of the agreement. In case the security deposit amount falls short of total amount recoverable from the licensee at the time of termination or expiry of the licensee agreement, the licensee will have to pay the balance amount within 15 days from the date of termination/ expiry failing which Managing Committee of BDB may take appropriate action against the licensee.all legal cost/charges if any shall be borne by the Licensee No interest will be credited or paid by BDB on the Security Deposit or the Advance license fee paid by the licensee. Upon licensing of the DTC Cabin, the right to use the cabin and obligations of the licensee will be governed by the Articles of Association of the Company (BDB), the Leave and License Agreement as well as the rules laid down by the Managing Committee of BDB from time to time, and the licensee shall abide by, and comply with, the same at all times. The licensee will also have to comply with the terms and conditions of Lease Deed (entered between BDB and MMRDA) and Rules and Regulations prescribed by the MMRDA. Lock-in period of one year will be applicable on the licensee. (i.e. The licensee cannot terminate the leave and license agreement before expiry of one year from the date of Key handover Post which, the licensee is free to terminate the leave and license agreement by giving 90 days notice. In case of termination during lock-in period or in case of absence of 90 days notice or shortfall of notice, BDB reserves the right to deduct the proportionate license fee (including any unpaid CAM charges, BMC taxes/ Property taxes and any other applicable taxes for the period not served & paid) from the security deposit and refund the balance amount to the licensee. BDB reserves the right to terminate the leave and license agreement at any point of Page 11 of 13

12 time by giving 90 days notice to the licensee. (xx) In case cheques given by applicant/licensee gets bounced, the penal charges levied by Banks will be passed on to the applicant /Licensee. G) General rules: The decision of the senior most person of Managing Committee of BDB will be final and binding on all participants. Managing Committee of BDB, reserves the right to cancel, reschedule or make changes to the auction for leave and license of DTC Cabins (including changes to the number of cabins put up for auction), at any point of time, by giving notice on the BDB website ( The Managing Committee of BDB cannot and shall not be accountable/liable for any disruptions/stoppages/interruptions or cancellation of the auction. BDB and its Auction Policies & Rules cannot be held responsible for matters out of its control and for force majeure reasons. Additions, deletions and / or modifications to the auction policies and rules are at the discretion of the Managing Committee of BDB and the Managing Committee may make such additions / deletions and / or modifications, at any time. Application to participate in this auction will be construed as participant s acceptance of the auction policies and rules stated herein. This auction process and leave and license of the DTC Cabins shall be governed by and construed in accordance with the laws of India and all disputes arising out of and in connection therewith shall be deemed to have arisen at Mumbai and subject to the jurisdiction of Mumbai Courts only. Page 12 of 13

13 SCHEDULE-H H) Schedule of licensing activities including payment and submission of document by the licensee: Sr. No. Activity Time line 1. Last date of accepting Regular or 6 April 2015 Associate Trade Membership for participating in auction at MR 2. Last date of submitting application (along with EMD) for participating in auction at Member Relations office 3. Live Manual Auction at BDB Admin Office, Conference Room No Intimation of winning the auction sent to Highest Bidders by MR 5. Licensee to sign the LOI and submit along with 3-month Security Deposit, one year advance rental and documents for MMRDA NOC at MR 6 April 2015 Tuesday, 7 April 2015 at the earliest On or before 14 April BDB to file for NOC with MMRDA Approximately within 5 working days from the end of the 15 day period for signing the LOI 7. Expected date of receiving NOC from MMRDA 8. Signing of leave and license agreement & registration of agreement 3 months (approx.) Within 15 days from the date of receiving NOC from MMRDA Page 13 of 13