Delhi High Court (August 14, 2001) 2001 (TLS)126511 2001-AD (Del)-7-513 RAGHU NATH GUPTA AND SONS Vs. Delhi Development Authority DEVINDER GUPTA ( 1 ) BY the impugned order learned Single Judge set aside a part of the Award of the arbitrator which pertained to counter claim no. 3 of DDA holding that the same was not arbitrable and made the remaining award as a rule of court. None of the parties is aggrieved with the remaining part of the order. This appeal has been preferred by the appellant against that part of the order passed on 14/07/2000 by learned Single Judge by which award of the arbitrator on counter claim of DDA was set aside. ( 2 ) THE disputes between the parties were referred for the sole arbitration of Sh. N lakshmiah who proceeded to make and publish his Award on 7/05/1994. Counter claim no. 3 of respondent- DDA was for a sum of Rs. 1,75,151. 00 on account of "extension of time the work not started during stipulated period and work extremely delayed". The Arbitrator in his award held that the question of levy of compensation under clause 2 of the contract was not correct since DDA went on accepting the work done by the contractor after the stipulated date of completion without reserving its right to levy compensation for delay and also not making time as essence of the contract, therefore, clause 2 of the contract becomes inoperative. Consequently, he made Nil Award on counter claim no. 3 of DDA. ( 3 ) ON Award being filed in court and notices being issued objections were filed by DDA to the Award. However, no objections were filed by DDA to that part of the Award of the arbitrator by which counter claim no. 3 was adjudicated upon on the ground that the arbitrator had no jurisdiction to make any adjudication or that the counter claim was not arbitrable in terms of clause 25 of the Agreement. Irrespective of the fact that objection had not been raised DDA was permitted to raise the said objections orally during the course of arguments that the said counter claim No. 3 was not arbitrable and, therefore, the Award of the arbitrator qua the said counter claim was without jurisdiction. Irrespective of the fact that objection had not been raised DDA was permitted to raise the said objections orally during the course of arguments that the said counter claim No. 3 was not arbitrable and, therefore, the Award of the arbitrator qua the said counter claim was without jurisdiction. Learned Single Judge as noticed above, proceeded to hold that clause 2 of the agreement makes the decision of the superintending Engineer, DDA with regard to the question of compensation final therefore, in terms of clause 25 of the agreement such a claim for compensation on account of delay was not arbitrable. ( 4 ) THE appellant has challenged the impugned order to the extent aforementioned on the ground that what has been made final under clause 2 of the agreement is the decision of the superintending Engineer as regards the quantum of compensation and not any other question. It has also been urged that DDA could not have been permitted to raise the objection orally after expiry of the period of limitation, when it had not raised this objection in the written objections filed to the award within limitation. ( 5 ) WE have heard learned counsel for the parties and been taken through the record. As regards the second ground of challenge to the impugned order that DDA ought not to have been allowed to raise objection after expiry of the period of limitatiori, we may say that there is no force in this submission made by learned counsel for the appellant in view of the decision of a Division Bench of this Court in M/s. Bhagat Construction Co. Vs. Delhi Development authority in S. No. 289-A/89 by its order dated 27/03/2000 on similar question which was referred to the Bench with which we fully agree. An objection as regard jurisdiction of the arbitrator to arbitrate on a claim can be permitted to be raised irrespective of limitation and in any case such a question can always be taken note of suo moto also by. the Court while deciding the question under Section 17 of the Arbitration Act of making the award rule of court. ( 6 ) AS regards the first ground of attack to the impugned order reference be made to decision of Supreme Court in Vishwanath Sdod Vs. Union of India and another, AIR 1989 SC 952 . the Court while deciding the question under Section 17 of the Arbitration Act of making the award rule of court. ( 6 ) AS regards the first ground of attack to the impugned order reference be made to decision of Supreme Court in Vishwanath Sdod Vs. Union of India and another, AIR 1989 SC 952 . The apex Court construed similarly worded clause 2 appearing in the standard agreement of the H. P. PWD. It was held that question regarding the amount of compensation leviable under clause 2 has to be decided only by Superintending Engineer and none else. In i, paras 8 and 10 of the report Apex Court elaborated on that the question of awarding compensation under clause 2 is outside the purview of the arbitrator and the compensation determined under clause 2 either by Engineer In-charge or by Superintending Engineer will not be capable of being called in question before the Arbitrator and reading of clause 2 and 25 together shows that the amount of compensation chargeable under clause 2 is a matter -which has to be adjudicated in accordance with that clause and which cannot be referred to arbitration under clause 25. Supreme Court made it clear that the proposition of law being laid down was as regards non-arbitrability "on the question of any compensation which the government might claim in terms of clause 2 of the contract. " In Vishwanath Sood s case (supra) State of Himachal Pradesh had laid a counter claim against the contractor before the arbitrator saying that the Government was entitled from the contractor to recover compensation 10% per annum of the tender amount for not executing work in accordance with the terms. It was allowed by the arbitrator. Ultimately interpreting clause 2 in the manner aforesaid that the counter claim was outside the purview of the arbitrator on which arbitrator could not have made any adjudication, the Supreme Court ordered deletion of the amount of compensation of Rs. 25,000. 00 awarded in favour of the Government by the Arbitrator in his award. ( 7 ) IN the instant case also precisely the learned Single Judge following Vishwanath sood s case (supra) held the question of quantum of compensation on delay under clause 2 to be outside the purview of the arbitration and thereby set aside the award of the arbitrator qua. counter claim No. 3. ( 7 ) IN the instant case also precisely the learned Single Judge following Vishwanath sood s case (supra) held the question of quantum of compensation on delay under clause 2 to be outside the purview of the arbitration and thereby set aside the award of the arbitrator qua. counter claim No. 3. ( 8 ) DECISION in Vishwanath Sood s case (supra) was followed by a Division Bench of this court in DDA. Vs. Sudhir Brothers 1995 (2) ILR 306 and by a Single Judge in Sudhir brothers Vs. DDA 1995 (2) ILR 437. ( 9 ) FOLLOWING the ratio of decision in Vishwanath Sood s case (supra) we are of the view that the learned Single Judge was perfectly justified in holding that in view of clause 25 of the agreement, counter claim No. 3 for compensation arising out of clause 2 was outside the scope of arbitration. Dismissed. Parties to bear their respective costs. --- *** --- .