Mr. D. K. Jain, J. ( 1 ) ON petitioner/contractor s application undersections 14 and 17 of the Arbitration Act, 1940, notice was issued to thearbitrator for filing the award. Shri V. D. Tewar the Id. arbitrator, filed hisaward dated 6/02/1989. Notice of filing of the award was given tothe parties. Delhi Development Authority (for short the DDA) has filedobjections against the award, being I. A. No. 5028/89, which are opposed bythe Contractor. ( 2 ) THE objection against the award is that the Id. arbitrator hasmisconducted himself in acting contrary to the terms of the agreement, theaward on Claim No. 2 as such is illegal as under Clause 2 of the Agreement,the Superintending Engineer is the final authority to levy compensation fordelay in execution of the work, which could not be reopened by the Id. arbitrator, he had no jurisdiction to adjudicate the question of compensationunder Clause 2 of the Agreement and the finding of the arbitrator is withoutjurisdiction, The objections having been controverted, the following issueswere framed:- (1) Whether the award dated 6. 2. 1984 in respect of claim No. 2deserves to be set aside for the reasons stated in the objections ? (2) Relief. It was agreed that evidence shall be led by way or affidavits and therecord of the arbitrator will be read in evidence. ( 3 ) BOTH the parties have filed affidavit in support and in resistanceof the objections against the award. ( 4 ) ISSUE No. 1: It appears that under agreement No. 24/ee/dd. 1/dda/83-84dated 27 March 1984 the work of development and dense carpeting of thezonal roads at Shalimar Bagh, Block B, Delhi was awarded by the DDA tothe Contractor. The work was to commence on 18 March 1984 and thestipulated date of completion was 17 April 1984. The work was notcompleted within the stipulated time. Clause 2 of the Agreement stipulatedthat time would be of the essence of the contrt and in case, it was notobserved by the Contractor, the DDA had the authority to levy compensationfor delay. The decision of the Superintending Engineer in this behalf wasmade final. Since there was delay in completion of the work, the authority,competent under Clause 2 of the said agreement, levied compensation ofrs. 89,442/-on the Contractor, which amount was deducted from the finalbill. The Contractor raised some disputes/claims including for Rs. 89,442/-,deducted from the final bill for delayed completion of the work, as above. Since there was delay in completion of the work, the authority,competent under Clause 2 of the said agreement, levied compensation ofrs. 89,442/-on the Contractor, which amount was deducted from the finalbill. The Contractor raised some disputes/claims including for Rs. 89,442/-,deducted from the final bill for delayed completion of the work, as above. The contractor invoked the arbitration clause, moved the persona designata,upon which the Engineer Member, DDA, the persona designata underthe arbitration clause, appointed Shri V. D. Tewari as the sole arbitrator todecide and make his award regarding the claims/disputes of the contractor. ( 5 ) THE Contractor s claims were resisted by the DDA. Claim No. 1was withdrawn by the Contractor. Claim No. 2 for Rs. 89,44/2- "forcompensation Unjustifiably levied by the department" was resisted by thedda, inter alia on the plea that by Clause 2 of the Agreement, the timeallowed for carrying out the work as entered in the tender was to be strictlyobserved and was deemed to he of the essence of the contract; the Contractorfailed to complete the work within the stipulated time; the Superintendingengineer, who is the competent authority under Clause 2 of the agreement,afterissue of show cause notice levied compensation under the said clause;the levy as such was as per the terms and conditions of the agreementand, therefore, the claim may be rejected. ( 6 ) AFTER hearing the parties, the Id. arbitrator allowed claim of thecontractor for Ra. 89,442/- and also awarded pendentc lite interest thereon. ( 7 ) I have heard Id. Counsel for the parties. ( 8 ) IN support of the objections. Shri Pradeep Dewan, Id. Counselfor the DDA, while fairiy conceding that he is not addressing any argumentson the merits of the compensation leviable under Clause 2 of the agreement,submits that the levy of compensation under the said clause is an exceptedmatter and. therefore, beyond the ambit of the Arbitration Clause 25 of theagreement. He urges that the decision on the levy of compensation underclause 2 of the agreement being exclusively within the discretion of thesuperintending Engineer, is final and not arbitrable. He contends thatthe reference on the issue made to the arbitrator by the persona designatawas illegal and the arbitrator could not adjudicate upon it and the award isillegal and void. Thus, the- main thrust of his argument is that the arbitratorhad no jurisdiction to go into the question of levy of compensation underclause 2 of the agreement. He contends thatthe reference on the issue made to the arbitrator by the persona designatawas illegal and the arbitrator could not adjudicate upon it and the award isillegal and void. Thus, the- main thrust of his argument is that the arbitratorhad no jurisdiction to go into the question of levy of compensation underclause 2 of the agreement. He has placed reliance on a decision of thesupreme Court in Vishwanath Sood v. Union of India and Another, AIR 1989sc 952 and of this Court in M/s. Bharat Furnishing Co. v. Delhi Developmentauthority and Another, 1991 (4) Delhi Lawyer 355. ( 9 ) SHRI R. K. . Watel, Id. Counsel for the Contractor on the otherhand, has urged that there being a specific reference on the aforesaid issuefor adjudication of the arbitrator and the DDA having not taken anyobjection about his jurisdiction before the arbitrator, the DDA is precludedfrom now raking up the issue of jurisdictional error on the part of thearbitrator. While relying on the judgments of this Court in the cases ofsudhir Brothers v. DDA (Suit No. 1522-A/87) decided on 21 December 1990,k. C. Chhiber v. DDA (Suit No. 1985-A/84) decided on 18 January, 1991,m/s Dewan Suraj Purkash Chopra and Sons v. Delhi Development Authority andanother, 1991 (1) Delhi Lawyer 393. G. D. Rathi Steels Pvt. Ltd. V. Delhidevelopment Authority, 1992 (23) DRJ 403 , he contends that as the Id. arbitrator s award on question of delay and levy of compensation thereforhad been upheld in the said cases, he, thus, had jurisdiction to go into thisquestion. ( 10 ) THUS, the only legal question, which falls for consideration inthe present case is, whether the question of levy of compensation/penaltyunder Clause 2 of the agreement is arbitrable and is covered by thearbitration Clause 25 of the agreement or not. ( 11 ) TO appreciate rival contentions and the judicial opinion on theissue, it is necessary to notice Clauses 2 and 25 of the agreement, which areset down below :-Clause 2 "the time allowed for carrying out the work as entered inthe tender shall be strictly observed by the Contractor and shall bedeemed to be of the essence of the contract on the part of thecontractor and shall be reckoned from the 10th day after the dateon which the order to commence the work is issued to contractor. The work shall throughout the stipulated period of the contract beproceeded with all due deligence and the contractor can pay ascompensation an amount equal to 1% or such smaller amount asthe Superintending Engineer Delhi Development Authority (whosedecision in writing shall be final) may decide on the amount of theestimated cost of the whole work as shown in the tender, forevery day that the work remains uncommenced or unifinishedafter the proper dates. And further, to ensure good progressduring the execution of the work, the contractor shall be boundin all cases in which the time allowed for any work exceeds,one month (save for special jobs) to complete one-eighthof the whole of the work before one-forth of such time has elapsed. However, for special jobs if a time-schedule has been submitted bythe Contractor and the same has been accepted by the Engineer-in-Charge, the contractor shall comply with the said time-schedule. Inthe event of the contractor failing to comply with this condition, heshall be liable to pay as compensation an amount equal to onepercent or such smaller amount as the Superintending Engineerdelhi Development Authority (whose decision in writing shall befinal) may decide on the said estimated cost of the whole work forevery day that the due quantity of work remains incomplete;provided always that the entire amount of compensation to be paidunder the provisions of this Clause shall not exceed ten percent, onthe estimated cost of the work as shown in the tender. "clause 25: "except where otherwise provided in the contract all questionsand disputes relating to the meaning of the specifications, desingsdrawings and instruction herein before mentioned and as to thequality of workmanship or materials used on the work or as to anyother questions claim, right matter or thing whatsoever, in any wayarising out of or relating to the contract designs drawings, specifications, estimates, instruction, orders or these conditions or otherwiseconcerning the works or the execution or failure to execute the samewhether arising during the progress of the work or after thecompletion or abandonment thereof shall be referred to the solearbitration of the person appointed by the Engineer Member Delhidevelopment Authority at the time of dispute. It will be no objection to any such appointment that the arbitrator so appointed is adelhi Development Authority employee that he had to deal withthe matters to which the contract relates and that in the course ofbis duties as Delhi Development Authority employees he hadexpressed view on all or any of the matters in dispute of difference. The arbitrator to whom the matter is originally referred beingtransferred or vacating his office or being unable to act for anyreason, such Engineer Member Delhi Development Authority asaforesaid at the time of such transfer, vacation of office or inabilityto act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such persona] shall beentitled to proceed with the reference from the stage at which itwas left by his predecessor it is also a terms of this contract that noperson other than a person appointed by such Engineer Member,delhi Development Authority as aforesaid should act as arbitratorand, if any reason that is not possible, the matter is not to bereferred to arbitration at all. In all cases where the amount of theclaim in dispute is Rs. 50,000/- (Rupees Fifty thousand) and above,the arbitrator will give reason for the award. Subject as aforesaid the provisions of the Arbitration Act, 1940or any statutory modification or re-enhancement thereof and therules made thereunder and for the time being in force shall apply tothe arbitration proceeding under this Clause. It is a term referredto arbitration under this clause together with the amount oramounts claimed in respect of each such dispute. It is also a term of the contract that if the contractors) does/do not make any demand for arbitration in respect of any claim (s)in writing within 90 days of receiving the intimation from theengineer-in-Charge that the Bill is ready for payment, the claim (s)of the contractor (s) will be deemed to have been waived andabsolutely barred and the Delhi Development Authority shall bedischarged and released of all liabilities under the contract in respectof those claims. " ( 12 ) CLAUSE 2 of the agreement highlights the necessity of keepingtime schedule in the execution of the work by the contractor. It stipulatesfor timely start, maintenance of requisite progress, and timely executionand completion of the work. Time allowed has to be strictly observed bythe contractor at all the stages and deemed to be of the essence of thecontract. It stipulatesfor timely start, maintenance of requisite progress, and timely executionand completion of the work. Time allowed has to be strictly observed bythe contractor at all the stages and deemed to be of the essence of thecontract. In the event of the contractor s failing to comply with this, theclause provides, he shall be liable to pay as compensation an amount equalto 1% or such smaller amount as the Superintending Engineer in his discretion may decide. The clause is mandatory, it lays down the machinery forassessment and levy of compenation if time is not maintained as of theessence of the contract by the contractor. The decision of the competentauthority (SE) on the question of awarding compensation, within the ambitof Clause 2, is made final and cannot be called in question. It thus, impliedlynegatives the competence of any other person, authority or body to arrogateto itself any power to do so. ( 13 ) A bare perusal of Clause 25 of the said agreement, reproducedabove, would show that any matter left for the decision of any authorityunder the contract, is taken out of the ambit of the arbitration. Theopening words of the arbitration clause 25, namely, "except where otherwiseprovided under the contract", specifically excludes the jurisdiction of thearbitrator from adjudicating on any matter for which a separate provisionlias been made in the contract. In common parlance these are called exceptedmatters and are beyond the domain of the arbitration. Compensation forbreach of contract, like delay in execution, can be claimed under the generallaw or under the Contract Act or under the terms of a contract. Whencompensation is claimed under the terms of the contract, the question ofarbitrability of the claim for compensation on delay would depend on theother terms of the contract itself. If the terms of the contract, specify anyauthority to determine it and its decision is made final, whatever is decision,the matter is taken out from the ambit of the arbitration. Support is lentto this view by Vishwanath Sood s case (supra) which fully covers the casein hand. It is not disputed that Clauses 2 and 25 herein are in pari-materiawith the corresponding relevant clauses in Vishwanath Sood s case. Support is lentto this view by Vishwanath Sood s case (supra) which fully covers the casein hand. It is not disputed that Clauses 2 and 25 herein are in pari-materiawith the corresponding relevant clauses in Vishwanath Sood s case. Invishwanath Sood s case it was held in para 9 as under: "clause 25 which is the arbitration Clause starts with anopening phrase excluding certain matters and disputes fromarbitration and these are matters or disputes in respect of whichprovision has been made elsewhere or otherwise in the contract. Thewords in our opinion can have reference only to provisions suchas the one in paranthesis in Clause 2 by which certain types ofdeterminations are left to the administrative authorities concerned. If that be not so, the words "except whereotherwise provided inthe contract" would become meaningless. We are, therefore,inclined to hold that the opening part of Clause 25 clearly excludesmatters like those mentioned in Clause 2 in respect of which anydispute is left to be decided by a higher official of the department. Our conclusion, therefore, is that the question of awarding compensation under Clause 2 is outside the purview of the arbitrator andthat the compensation, determined under Clause 2 either by theengineer-in-Charge or on further reference by the Superintendingengineer will not be capable of being called in question before thearbitrator. " ( 14 ) IN the present case, it is not disputed that the Superintendingengineer, the competent authority, acting under Clause 2, had determinedthat there was delay on the part of the contractor and levied a compensationof Rs. 89,442/- as payable by the contractor to the DDA. This amount wasdeducted by the DDA from the Contractor s final bill. For the deductedamount the Contractor raised claim No. 2 The claim was contested beforethe arbitrator on the basis of stipulation in Clause 2 of the agreement betweenthe parties and the levy was defended on that score, it is true that thejurisdiction of the arbitrator to entertain the claim on that basis was notassailed in so many words, but the claim nonetheless was contested on thestipulations under Clause 2 of the agreement, about the competent authorityhaving determined the issue. This, in my view, took the matter out of theambit of arbitration. The reference and the award on the issue is thus, nulland void. Support is lent to this view by Supreme Court s decisions inm/s. Associated Engineering Co. v. Government of Andhra Pradesh and Anr. This, in my view, took the matter out of theambit of arbitration. The reference and the award on the issue is thus, nulland void. Support is lent to this view by Supreme Court s decisions inm/s. Associated Engineering Co. v. Government of Andhra Pradesh and Anr. . JT1991 (3) SC 123 and M/s. Prakash Commercial Corporation Ltd. v. The Chiefadministrator Dandakaranya Project and Another, MR 1991 Supreme Court957. It is well settled that consent of parties cannot confer jurisdictionwhere there is none. ( 15 ) THE proposition of law laid down in Vishwanath s case (supra)was disputed in the authorities relied upon by Shri Watel. The said authoritywas held distinguishable on facts in each case and thus, held not applicable. It appears that in all these cases, the ratio of Vishwanath s case was notapplied, inter alia, on the ground that the DDA itself had before the arbitrator, raised counter claim for compensation for delay in execution of theworks by the Contractor, which was negatived. The DDA s objections,against the award were, thus rejected. ( 16 ) BESIDES, the authorities relied upon by Shri Watel aredistinguishable. In Sudhir Brothers, case (supra) decided by D. P. Wadhwa,j. ,it was found that time was not of the essence of the contract, the casewas, thus not covered by Clause?, of the contract. In K C. Chhiber s case (supra) the question of law on levy of compensation under Clause 2 wasspecifically referred to arbitration at the instance of the Delhi Developmentauthority and relying on M/s. Tarapore and Company v. Cochin Shipyard Ltd. Cochin and Another, AIR 1984 SC 1072 and State of Orissa v. Dandasi Sahu, air 1988 SC 1791 , S. N. (sapra), J. held that the award of compensation fordelay, by the arbitrator, could not be interfered with. In the said authoritiesit was held that if a question of Law was specifically referred and had notarisen only incidentally for arbitrator s decision, the parties choosing theirown Forum, could not object to the award, whether good or bad. In thepresent case no specific question of Law was referred to the arbitrator andbe was not called upon to specifically determine if the matter was arbitrable. The reference only was in general terms. Claim No. 2 raised by thecontractor is as below: "claimants claim Rs. 89,442/- towards compensation unjustifiedlevied by the department for delayed complete of work. In thepresent case no specific question of Law was referred to the arbitrator andbe was not called upon to specifically determine if the matter was arbitrable. The reference only was in general terms. Claim No. 2 raised by thecontractor is as below: "claimants claim Rs. 89,442/- towards compensation unjustifiedlevied by the department for delayed complete of work. " ( 17 ) THE question of law, whether matter was arbitrable aroseincidentally. Herein, the learned arbitrator s assumption of jurisdiction toadjudicate and review a finding of a competent authority is an error of Lawapparent on the face of the award. ( 18 ) IN G. D. Rathi s case (supra) S. C. Jain, J. found as a fact thattime was not maintained as of the essence of the contract as the DDA,despite expiry of stipulated time, kept on asking the Contractor to continuewith the supplies. Clause 2 was. therefore, held to be not applicable. Thesaid authority is clearly distinguishable from the facts of the present case. ( 19 ) IT view of the above discussion and findings, the DDA s objection against claim No. 2, in LA. 5028/89, is allowed. The award thereonand the pendente lite interest awarded under claim No. 3 on the amountawarded under claim No. 2 is liable to be set aside. ( 20 ) THE award is accordingly set aside with no order as to costs. ( 21 ) APPLICATION under Sections 14 and 17 of the Arbitration Actstands disposed of.