JUDGMENT Arun Kumar Goel, J —Parties to this suit entered into an agreement No 11/1985 for the construction of Administrative Block for Regional Engineering College, Hamirpur (SH : Building portion and internal WS and SI). Before entering into the said agreement, notice inviting tender was issued by the Regional Engineering College Society, Hamirpur In response to the said notice tenders were received by the Society and finally the work was allotted to the defendant. It is in these circumstances that the agreement was entered into between the parties and this work was allotted to the defendant on 27th March, 1987. The total value of the contract was Rs. 66,95,489 and as pep agreement the date of the commencement of the work was 12-4-1987 and date of completion was 12-10-1988. From the award of Arbitrator it appears that Contractor had started the work on 27-4-1987 and Nishans/layout were given to him but the manpower deployed, according to the plaintiff, for excavation of the foundation etc. was negligible and the defendant failed to accelerate the pace of work despite repeated communications addressed to him in this behalf. During the entire period i.e between 27-4 1987 to 24-6-1987 the work carried out was of the value of Rs. 3,000 only and the progress of the work was not in accordance with the terms of agreement. At this stage it may be pointed out that both the parties have admitted the execution of the agreement in question and regarding the dates and other facts referred to here-in-above they are not at variance. 2, It appears that the plaintiff wanted to proceed against the defendant interms of the agreement particularly clause (2) thereof, therefore, letters appear to have been written to him It may be worthwhile to mention here that Executive Engineer, Construction Cell, R. E. C, Hamirpur vide his office note dated 23rd September, 1987 levied a compensation of Rs. 6,69,549 upon the Firm, After levying compensation, he submitted the papers to the Superintending Engineer, R E C., Hamirpur for approval This noting is filed by the plaintiff alongwith the affidavit of Shri N. K. Sharma, Executive Engineer, dated 15th March, 1996 and is at page 86 and 87 of the file. 6,69,549 upon the Firm, After levying compensation, he submitted the papers to the Superintending Engineer, R E C., Hamirpur for approval This noting is filed by the plaintiff alongwith the affidavit of Shri N. K. Sharma, Executive Engineer, dated 15th March, 1996 and is at page 86 and 87 of the file. At the foot of this note the endorsement made by the Superintending Engineer is to the following effect : "Action taken by the E E is approved.” 3 Since the disputes had arisen between the parties, therefore reference was made by the Principal, Regional Engineering College, Hamirpur to the Arbitrator, namely, Sh J. R. Kainth the then Superintending Engineer, Arbitration, H.P.P.W.D, Solan vide office Memo, dated 12th February, 1988 calling upon him to decide and make award regarding claims/counter claims of both the parties, who conducted three hearings and thereafter he resigned. On his resignation, Sh. R P. Malhotra the then Superintending Engineer, Arbitration, H.PPWD, Solan was appointed Arbitrator in terms of office Memo dated 1-2-1989, who conducted one hearing and also resigned After that Sh, R. K. Kaura was appointed as Arbitrator by the Principal, R E. C, Hamirpur vide his letter dated 30-7-i991 but he did not conducted any hearing and on his resignation Sh. D. N. Handa the then Superintending Engineer, Arbitration. H. P. P. W. D. Solan was appointed as Arbitrator but he also resigned after cop-ducting one hearing, when S S. Juneja was appointed as Arbitrator in terms of letter dated 28th December, 1993 who entered upon reference on 13th January, 1994 and concluded the hearing as well as proceedings in the case on 18th March, 1994. He made his awarded dated 12th May, 1994. From the record it appears that the plaintiff had claimed a sum of Rs. 7,66,861 under Claim No. 1 before the Arbitrator. The defendant while repudiating the claim of the plaintiff before the Arbitrator had made certain counter claims, 4. Under Claims No 1 and 2 nothing was allowed to the plaintiff. In respect of counter claim of the defendant under counter claim No.1 nothing was awarded to the defendant. 7,66,861 under Claim No. 1 before the Arbitrator. The defendant while repudiating the claim of the plaintiff before the Arbitrator had made certain counter claims, 4. Under Claims No 1 and 2 nothing was allowed to the plaintiff. In respect of counter claim of the defendant under counter claim No.1 nothing was awarded to the defendant. Under counter claim No. 2 the Arbitrator has allowed the refund of earnest money in the sum of Rs 20,000 after depledging the same in favour of the defendant as according to the Arbitrator the action of the plaintiff to take action under clause 3 (a) of the agreement was not in order. In respect of counter claim No. 3t the claim of the defendant was turned down as nothing was awarded to him. In respect of counter claim No. 4, a sum of Rs 2,688 has been allowed and in respect of interest made vide counter claim No. 5 a sum of Rs. 1,612 has been allowed. Counter claim No 6 filed by the defendant for cost of arbitration has also been negatived by the arbitrator. Thus in all a sum of Rs. 4,3C0(Rs. 2,688+Rs 1,612) was awarded in favour of the defendant and against the plaintiff in full and final settlement of all the claims and counter claims pertaining to the agreement in question and in addition to this the plaintiff was ordered to release the earnest money amounting to Rs, 20,000 lying with it in shape of N. S, S. after depledging the same in favour of the defendant-contractor. 5. The award was filed in this Court on ?6th August, 1994 by the Arbitrator where after notices were ordered to be issued to the parties vide order of the Court dated 6th January, 1995 and objections have been filed by the plaintiff on 22nd September, 1994 under sections 30 and 33 of the Arbitration Act against the award in question with a prayer to allow the objections as detailed therein. This position was controverter by the defendant who filed their reply and submitted that there is no legal ground made out for interference with the award in question and they consequently prayed for upholding the award by making it the rule of the court while dismissing the objections of the plaintiff On the aforesaid pleadings of the parties, the parties went to trial on the following issues : 1. Whether the objections are within limitation ? — O.P. Objector. 2. Whether the Arbitrator has misconducted himself and the proceedings, as alleged ? —O.P. Objector. 3. Whether there is an error apparent on the face of the award, as alleged ? -OP. Objector. 4. Relief. Parties were directed to lead evidence by way of affidavits which they have done in the present case inasmuch as affidavit of Sh. N» K. Sharma XEN of the plaintiff dated 12th September, 1995 was filed and thereafter another affidavit of Sh. RK. Sharma dated 15th March, 1996 accompanied by the office note of the Executive Engineer of Construction Cell, Rs E, C. Hamirpur dated 2?rd September, 1-987, has been filed. No affidavit has been filed to counter the averments made on behalf of the plaintiff to both the said affidavits. Issues No. 2 and 3 : 6. Shri K. D. Sood, learned Counsel for the plaintiff has made submission that so far the award ordering return of earnest money of Rs 20,000 under counter claim No, 2 ordered by the Arbitrator in the impugned award is concerned, the same is not sustainable and, therefore, it deserves to be set aside. According to the learned Counsel for the plaintiff the facts as they emerge from the record of the case are that in exercise of the powers vested in the Superintending Engineer, compensation to the tune of Rs 6,69,549 has been levied by the Executive Engineer, Construction Cell who while submitting the papers to S, E. has sought approval of levy of such compensation and according to Mr Sood the action of the Executive Engineer having been approved by the competent authority the matter stands finally adjudicated. He further submits that interms of clause (e) (i) of the agreement in question under the heading “ITEM RATE TENDER FOR WORKS” the plaintiff is well within its rights to appropriate the amount of earnest money of Rs. 20,000 towards its claims. For ready reference, relevant clause of the agreement in question is reproduced here-in-below :— "(e) ............ (i) to abide by and fulfil all the terms and provisions of the ^aid conditions annexed hereto and all the terms and provisions contained in notice inviting tenders so far as applicable and or in default thereof to forfeit and pay to the REC Society or his successors in office, the sum of money mentioned in the said conditions. (i) to abide by and fulfil all the terms and provisions of the ^aid conditions annexed hereto and all the terms and provisions contained in notice inviting tenders so far as applicable and or in default thereof to forfeit and pay to the REC Society or his successors in office, the sum of money mentioned in the said conditions. A sum of Rs. 20,000 is hereby forwarded in the shape of National Saving Certificate/Time Deposit Account/ Post Office Saving Bank Account as Earnest Money duly pledged in favour of Engineer-in-charge If 1/we fail to commence the work specified in the above Memorandum, I/we agree that the said society or his successor in office shall, without prejudice to any other right or remedy, be at liverty to forfeit the said Earnest Money absolutely, otherwise the said Earnest Money shall be retained by him toward Security Deposit mentioned against clause (d) of the above mentioned Memorandum .” 7. It may not be out of place to mention in this context that the plaintiff while submitting its claim before the Arbitrator has prayed for the grant of this sum, however, the same has not been adjudicated upon by the Arbitrator holding that in the face of the judgment of the apex Court reported in Vishwanath Sood v. Union of India the matter relating to levy of compensation under clause (2) of the agreement is not arbitrable Reference at this stage may be made to AIR 1989 SC 952. In order to properly appreciate the submission of Mr. Sood relevant observations of the Honble Supreme Court are extracted herein-below : ".....But it will be appreciated that in practice the amount of compensation will be initially levied by the Engineer-in-Charge and the Superintending Engineer comes into the picture only as some sort of revisional or appellate authority to whom the contractor appeals for redress. As we see, it, clause 2 contains a complete machinery for determination of the compensation which can be claimed by the Government on the ground of delay on the part of the contractor in completing the contract as per the time schedule agreed to between the parties. As we see, it, clause 2 contains a complete machinery for determination of the compensation which can be claimed by the Government on the ground of delay on the part of the contractor in completing the contract as per the time schedule agreed to between the parties. The decision of the Superintending Engineer, it seems to us, is in the nature of a considered decision which he has to arrive at after considering the various mitigating circumstances that may be pleaded by the contractor or his plea that he is not liable to pay compensation at all under this clause. In our opinion the question regarding the amount of compensation leviable under clause 2 has to be decided only by the Superintending Engineer and no one else ...” 8. Mr. Sood submits that as per noting of the Executive Engineer, the matter stands concluded as the action has been approved by the Superintending Engineer as such the award of the Arbitrator ordering the refund of earnest money of Rs. 20,000 suffers from error apparent on the face of the record and therefore, the findings on this matter deserve to be set aside. Not only this but he further goes on to submit that this tent amounts to misconduct on the part of the Arbitrator as well as of his having misconducted the proceedings and he prays for setting aside the same. 9. So for legal proposition regarding levy of compensation under clause 2 of the agreement by the Superintending Engineer being not arbitrable is concerned, the same is no more in dispute in the face of the findings of the apex Court in Viswanaths case (supra). However, at this stage it has also to be seen that whether the Superintending Engineer is required to apply his mind or he has just to be a dittoing authority to whatever is put to him by his subordinates as in the present case by the Executive Engineer. The Superintending Engineer has been given very vide power of levying compensation in terms of clause 2 of the agreement. The Superintending Engineer has been given very vide power of levying compensation in terms of clause 2 of the agreement. In this context it may be appropriate to say that wider the power bigger the caution and a perusal of the action on the part of the Superintending Engineer while approving the note of the XEN levying penalty in the present case shows that there is neither any adjudicatory process nor the order shows the application of mind in any manner whatsoever by the Superintending Engineer Only thing that has been done by the S. E> is approving the action of the Executive Engineer. This is neither in consonance with the principles of fair play nor it complies with the spirit of clause 2 and above all it also fails to meet the requirements of his action being in the nature of a considered decision which he has to arrive at after considering the various mitigating circumstances that may be pleaded by the contractor or his plea that he is not liable to pay compensation at all under this clause. From this it can be further safely inferred that before levying penalty under clause 2 Superintending Engineer is not to just straight away approve the action of his subordinates as has been done in the present case, but he is also expected to at least hear the contractor and then adjudicate the matter after considering the respective pleas/contentions of the parties, which prima facie does not appear to have been done in the present case. So, in these circumstances, the submission of Mr. Sood that the claim of levy of compensation under clause 2 stood adjudicated and, therefore, release of earnest money on the part of the arbitrator while making award in respect of counter claim No 2 of the defendant cannot be upheld and is accordingly rejected. 10. Sh. So, in these circumstances, the submission of Mr. Sood that the claim of levy of compensation under clause 2 stood adjudicated and, therefore, release of earnest money on the part of the arbitrator while making award in respect of counter claim No 2 of the defendant cannot be upheld and is accordingly rejected. 10. Sh. Bhogal learned Counsel on behalf of the defendant has submitted that the levy of damages in a given situation can be in two situations only: (1) when there is an adjudication of the damages; or (2) when the claim made by one party is admitted by the other, and according to him none of these situations exist in the present case, therefore, the release of earnest money ordered by the arbitrator is perfectly in order and there is no error apparent on the face of the award which calls for interference, as also, according to him there is no misconduct either by the arbitrator or of proceedings on his part and, therefore, the award deserves to be upheld on this ground also, In support of this submission he has referred to AIR 1987 SC i3)9 and has prayed that the award may be made the rule of the Court. This decision fully supports the submission made on behalf of defendant. 11. Mr. Bhogal further submitted that the award in the present case suffers from no legal infirmity which may call for interference and he submits that the objections are liable to be dismissed with costs, In support of his this submission he has referred to a decision of the apex Court reported in AIR 1955 SC 2413 and he submits that this being a reasoned award, there is no error of law and none appears from the award itself or from any document or not incorporated in it or appended to it and thus prayed that the award on the basis of this judgment also deserves to be upheld. 12. As already observed in this order, that there is no compensation levied under clause 2 in terms of the agreement as envisaged in law as well as observed by the Hon’ble apex Court, the award does not suffer from any infirmity within the ambit of sections 30 and 33 of the Arbitration Act and calls for no interference. 12. As already observed in this order, that there is no compensation levied under clause 2 in terms of the agreement as envisaged in law as well as observed by the Hon’ble apex Court, the award does not suffer from any infirmity within the ambit of sections 30 and 33 of the Arbitration Act and calls for no interference. Both the issues are decided against the plaintiff and in favour of the defendant Issue No. 1 : During the course of arguments, when learned counsel for the parties were confronted with the record of the case, then it was fairly stated by the learned counsel for the defendant that the objections are within time. In the face of this position issue No. 1 is decided in favour of the plaintiff and against the defendant. As a result of the aforesaid discussion the objections filed vide OMP No. 534/94 are dismissed and the award dated 12th May, 1994 passed by the Arbitrator in respect of Agreement No. 11 of 1986 87 is made the rule of the Court. 13. At this stage Mr. Sood sub nits that the observations of this Court regarding the non-adjudication of the claim of levy of compensation by application of mind as well as the same being not in consonance with the judgment of the apex Court in Vishwanath case may not preclude his client to have such recourse as may be permissible in law. It may be clarified in this context that the necessity of giving those findings had arisen when it was argued by Mr. Sood that the cairn stands lawfully adjudicated after the compensation had been levied by the Superintending Engineer in terms of clause 2 of the agreement. It is, however, clarified that in case the plaintiff can take up any permissible action against the defendant in law these observations will not preclude them from doing so. No costs. Orders Accordingly,