A claim must have a cause of action; without final approval from relevant authorities, the claim is premature.

Judgment :

(Sanjay S. Agrawal, J.)

1) The instant appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (henceforth ‘the Act, 1996’) read with Section 13(2) of the Commercial Courts Act, 2015 (henceforth ‘the Act, 2015’) has been preferred against the order dated 03-11-2018 passed by the Commercial Court (District Level), Raipur, in MJC No.7/18, wherein the application filed by the appellant herein under Section 34 of the Act, 1996 was rejected.

2) The appellant-Municipal Corporation, Bilaspur, incorporated under the provisions of the Chhattisgarh Municipal Corporation Act, 1956 (henceforth ‘the Act, 1956’) issued a NIT/EOI (Notice Inviting Tender/ Expression of Interest) to carry out the work of planning and designing for execution of Storm Drainage Water System for Bilaspur City on 15-7-2010 under the UIDSSMT (Urban Infrastructure Development Scheme for Small and Medium Towns), a project of the Government of India, which is a component of JNNURM (Jawaharlal Nehru National Urban Renewal Mission).

3) Pursuant to the said NIT/EOI, the respondent/claimant herein submitted its bid, which was accepted by the appellant/ Corporation and contract agreement dated 24-01-2011 was executed between the parties and the work order was issued on 27-01-2011 in favour of the respondent/claimant for executing the work. The payment of consultancy fee was @ 1.18% of the total project cost. Initially the cost of the project was Rs.37.53 crores and it was agreed that actual fees would be worked out based on the agreed percentage of the total final cost of the project.

4) The respondent/claimant submitted the Inception Report, Preliminary Design Report and Draft Detailed Project Report (DPR) as a part of execution of work and the payment was made by the appellant/Corporation for above work as per the payment schedule. After approval of final DPR, the respondent/claimant claimed Rs.4,07,03,583/- being 1.18% of total cost project of Rs.333.93 crores. The said claim was refused by the appellant/Corporation and, as such, the dispute was referred to the Sole Arbitrator for adjudication, who was appointed under sub-section (6) of Section 11 of the Act, 1996 by this Court vide order dated 27.01.2017 in ARBA No.67/2016.

5) The respondent/claimant raised its claim for consultancy charges at the rate of 1.18% of the total project cost, i.e. Rs.333.93 crores as per clause 4(C) of the contract agreement before the Sole Arbitrator. The learned Sole Arbitrator after considering the submission advanced, evidence adduced and documents produced, allowed the claim of the respondent herein and passed an award to the tune of Rs.4,07,03,583/- (Rs. Four Crores Seven Lacs Three Thousand Five Hundred Eighty Three only). It has also been observed by the Sole Arbitrator that in case, the award amount is not paid within a period of three months from 07-02-2018, it would carry interest at the rate of 9% per annum on the awarded amount from the date of expiry of three months. The relevant observation made in this regard at paragraph 31 reads as under :-

“31. In the result, an award for a total sum of Rs.4,07,03,583/-(Rupees Four Crores Seven Lakhs Three Thousand Five Hundred Eighty Three only) is passed in favour of the claimant and against the respondent. The respondent is allowed three months time from today i.e. 07.02.2018 for satisfying the award. In case the award amount is not paid within that period then the respondent shall be liable to pay simple interest @ 9% per annum on the awarded amount from the date of expiry of three months till date of realization. Parties shall bear the