SUDHIR NARAIN, J. ( 1 ) THIS appeal is directed against the judgment dated 24. 5. 1999 and decree dated 14. 7. 1999 making the award of the arbitrator dated 23. 5. 1997 as rule of Court and rejecting the objection of the appellants under Section 30/33 of the Arbitration Act, 1940 (in short the act ). ( 2 ) THE Allahabad Development Authority, Allahabad, appellant, framed a project for construction of multi-storied commercial complex at Clock Tower, Chowk, Allahabad. It Invited tenders for constructing the commercial complex as framed by it. M/s. VIdyawati Construction company, the respondent (hereinafter called the respondent-company) submitted the tender. The cost of the project was quantified approximately at Rs. 57,00,000. The company submitted its tender which was accepted by the appellant, Allahabad Development Authority (in short the a. D. A. ). As per terms of the agreement, the construction was to be completed within a period of six months. The period was, however, extended. It was completed on 31. 8. 1987. The respondent-company had submitted twelve running bills for an amount of Rs. 1,14,43,922. 01. The respondent-company was paid Rs. 1,14,00,000. The respondent-company submitted final bill on 9. 12. 1989 before the appellant. ( 3 ) AS the appellant did not pay the amount, the respondent filed writ petition No. 9086 of 1993 in this Court for a mandamus commanding the appellant to release the amount of the bill as prepared by the appellant itself and further sought relief to direct the appellant to release F. D. Rs. of the respondent-company deposited by way of security deposits, totalling Rs. 5,79,690 and interest, etc. The writ petition was disposed of by this Court on 21. 1. 1994 directing the vice-Chairman, A. D. A. to decide the claim of the respondent-company within a period of one month from the date on which a certified copy of the order is produced before him. The vice-Chairman, A. D. A. , by his order dated 17. 6. 1994 rejected the claim petition of the respondent-company. ( 4 ) THE respondent-company on 11th February, 1995 sent a letter to the Vice-Chairman, A. D. A. appointing Sri R. C. Jain, fellow of Indian institute of Architect as Arbitrator and requested the appellant to appoint another Arbitrator in terms of Arbitration clause and in case he falls to appoint Arbitrator within 15 days of the receipt of the letter. Sri R. C. Jain shall adjudicate as the sole Arbitrator for adjudication of the dispute between the parties. The Vice-Chairman of the a. D. A. wrote a letter on February 6, 1995 that as the matter has been decided by the vice-Chairman rejecting the claim of the respondent-company on 17. 6. 1994, the question of appointing Arbitrator does not arise. The respondent-company submitted 18 claims before the arbitrator on 7th February, 1996 as under: Claim No. 1 Balance amount of work done Rs . 51. 83. 639. 00 Claim No. 2 Refund of security deposit Rs . 6,94,067. 00 Claim No. 3 Reimbursement of loss of interest Rs . 4. 75. 180. 00 Claim No. 4 Additional cost Incurred for procurement of steel and cement Rs . 4. 71. 718. 00 Claim No. 5 Enhanced rate over and above tender rates for quantum of work executed beyond stipulated date of completion. Rs . 18. 73. 121. 00 Claim No. 6 Cost of material wastage 8. 09,100. 00 Claim No. 7 Cost of material wastage Rs . 6. 64. 783. 00 Claim No. 8 Interest at 24% per annum for the period running bills and final bill were not paid in time Rs . 42,64. 789. 00 Claim No. 9 Items for which the amount was paid at lesser rate 5. 14,700. 00 Claim No. 10 Claim No. 11 Claim No. 12 Claim No. 13 Claim No. 14 Claim No. 15 Claim No. 16 Claim No. 17 Claim No. 18 Extra expenditure on Watch and Ward Loss of profit at 15% due to prolongation of work Additional Cost incurred on account of failure on the part of Department to securepermit for plying vehicles Additional cost and damages on shifting of R. C. C. columns Damages incurred on the Idleness of Labour , establishment and machinery Interest payable on the cost of material purchased at 24% Claim for returning trucks empty from Store Sales tax on work contract 24% Interest present and pendente lite and future Interest. Rs. 6,97,500. 00 Rs. 14,86,772. 00 Rs. 4. 31. 826. 00 Rs. 15. 000. 00 Rs. 5,78. 400. 00 Rs. 2. 35. 858. 00 Rs. 20. 000. 00 Rs. 22,24. 555. 00 Rs. 2. 06. 41. 008. 00 ( 5 ) THE Arbitrator entered into reference on 14th June, 1996. The notices were issued to the appellant. Rs. 6,97,500. 00 Rs. 14,86,772. 00 Rs. 4. 31. 826. 00 Rs. 15. 000. 00 Rs. 5,78. 400. 00 Rs. 2. 35. 858. 00 Rs. 20. 000. 00 Rs. 22,24. 555. 00 Rs. 2. 06. 41. 008. 00 ( 5 ) THE Arbitrator entered into reference on 14th June, 1996. The notices were issued to the appellant. On behalf of the appellant neither any person appeared nor filed objection. He fixed 14. 2. 1997, 12. 4. 1997, 23. 4. 1997 and 24. 4. 1997 for hearing the matter. ( 6 ) AS the award could not be given within the statutory period, an application was filed for extension of the time before the court under Section 28 of the Arbitration Act, 1940. The Court extended the period with the condition that the award be given by 3rd June. 1997. The arbitrator fixed May 19, 1997 for hearing and the award was given on May 23, 1997 for a sum of Rs. 1. 17,91,714. 00 as principal and interest on Rs. 88,12,763. 00 at the rate of 18% from the date of award till decree or payment whichever is earlier. The award was submitted before the Civil judge, Senior Division, Allahabad for making the award rule of the Court. The application was registered as Suit No. 327 of 1997. The appellant filed objection to the said application under section 30/33 of the Arbitration Act, 1940. It was registered as Case No. 395 of 1997. The learned Civil Judge made the award rule of the Court and rejected the objection of the appellant by judgment and order dated 24. 5. 1999. This order is under appeal. ( 7 ) WE have heard Sri S. N. Varma, learned senior counsel for the appellant, Sri R. N. Singh, learned senior counsel for respondent at length. ( 8 ) THE first contention raised the appeal is that the Vice-Chairman of the A. D. A. having rejected the claim of the respondent-company vide order dated 17. 6. 1994, the arbitration proceedings were not maintainable. ( 8 ) THE first contention raised the appeal is that the Vice-Chairman of the A. D. A. having rejected the claim of the respondent-company vide order dated 17. 6. 1994, the arbitration proceedings were not maintainable. As noted above, respondent-company had filed Writ Petition No. 9086 of 1993 making the following prayers : " (i) issue a writ, order or direction in the nature of writ of mandamus commanding the respondent authority to release the balance amount of the bill prepared by the authority itself; (ii) a writ, order or direction in the nature of writ of mandamus directing the respondent authority to release the Fixed Deposits of the petitioner, deposited by way of security totalling Rs. 5,79,690. (iii) a writ, order or direction in the nature of writ of mandamus directing the respondent authority to pay Interest on the whole amount of the petitioner withheld by it at the rate of 24 per cent per annum from the date of final bill submitted by the petitioner to the authority. (iv) any other writ, order or direction as may be deemed fit and proper on the facts and in the circumstances of the case ; and (v) award costs of the writ petition to the petitioner. " The allegation of the respondent-company was that A. D. A. had calculated the amount of Rs. 1,35,75,921. 70 as the amount payable to respondent-company but It has paid only Rs. 1,25,43,942. 00. Still the amount of Rs. 10,31,099. 70 is payable to the petitioner. ( 9 ) IN paragraph 20 of the writ petition, it was made clear that in respect of other amount, the petitioner reserved his right to take appropriate action. Paragraphs 20 and 22 read as under : "20. That although the aforesaid amount, as determined by the Department, is not acceptable to the petitioner and the petitioner has already raised protest in this regard, and therefore, the petitioner reserves rights to take appropriate action against the illegal retention of the amount. However, for the purpose of this writ petition, the aforesaid illegal retention of the disputed amount is not being raised and the present writ petition is confined to the amount of the final bill as has been prepared by the authority itself. 22. That assuming but without admitting that the bill worked out by the authority to an amount of Rs. 1,35,75,921. 22. That assuming but without admitting that the bill worked out by the authority to an amount of Rs. 1,35,75,921. 70 P is correct and the authority has made payment of Rs. 1,25,43,922. 00 P, still the amount of Rs. 10,31. 999. 70 P is payable to the petitioner. " ( 10 ) THE writ petition was disposed of with the direction that the petitioner can submit its claim before the Vice-Chairman of the A. D. A. , and on such claim being submitted, he shall decide within a period of one month from the date on which a certified copy of the order is produced before him. The respondent-company submitted its claim before the Vice-chairman A. D. A. He rejected it on 17. 6. 1994. The decision of the Vice-Chairman was not as an Arbitrator appointed by the parties. It was only administrative decision taken on a claim petition submitted before him and decided in pursuance of the order of the High Court. The arbitration clause contemplates reference to an arbitrator as appointed by the parties. Clause 46 of the Arbitration agreement reads as under : "all disputes and differences of any kind whatever arising out of or in connection with the contract or the carrying out of works (whether during the progress of the work or after the completion and whether before or after the determination abandonment or breach of the contract)shall be referred to and settled by the Executive Engineer who shall state their decision in writing. Such decision may be in the form of a final certificate or otherwise. The decision of the executive Engineer with respect to any of the excepted matter shall be final and without appeal as stated in clause No. 41. But, if either the employer or the contractor be dissatisfied with the decision of the Executive Engineer or any matter question or the dispute of any kind except any of the excepted matters) or as to the withholding by the Executive Engineer of any certificate to which the contractor may claim to be entitled, then and in any such case either party (the employer or the Contractors) may within 280 days after receiving a notice to such decision give a written notice to the other party requiring that such matters in dispute be arbitrated upon. Such written notice shall specify the matters which are in dispute and such dispute or difference of which such written notice has been given and no other shall be and is hereby referred to the arbitration and final decision of a single-Arbitrator being a fellow of the Indian Institute of architects to be agreed upon and appointed by both the parties or in case of disagreement as to the appointment of a single arbitrator to the arbitration of two Arbitrators being both fellow of the Indian Institute of Architects one to be appointed by each party, which arbitrators shall before taking upon themselves the burden of reference appoint an umpire. The arbitrator, the arbitrators or the umpire shall have power to open requisition or notice, save in regard and to excepted matters referred to in Clause No. 41 to determine all matters in dispute which shall be submitted to him or them and of which notice shall have been given as aforesaid. . . . . " The decision of the Vice-Chairman cannot be treated as final between the parties. It is the decision of the arbitrator which shall be taken as binding between the parties subject to making it rule of the Court in accordance with the provisions of the Arbitration Act. ( 11 ) THE second limb of the argument is that the arbitrator was to be appointed by both the parties and in accordance with the terms of the arbitration clause but the respondent-company alone was not entitled to appoint a sole arbitrator. The sole arbitrator is appointed by both the parties. In this context, reference may be made to the letter dated 11. 2. 1995 of the respondent-company sent to the Vice-Chairman of A. D. A. Indicating the name of arbitrator and asking him to appoint another arbitrator in accordance with the terms of the arbitration clause and if he falls to appoint another arbitrator, it was pointed out that the sole arbitrator shall enter into the reference. On 6th april, 1995, the respondent-company received a letter from the appellant that as the matter has been decided by the Vice-Chairman of A. D. A. , the question of appointment of arbitrator does not arise. Clause 46 of the Arbitration agreement confers right on both the parties to appoint their own arbitrator. On 6th april, 1995, the respondent-company received a letter from the appellant that as the matter has been decided by the Vice-Chairman of A. D. A. , the question of appointment of arbitrator does not arise. Clause 46 of the Arbitration agreement confers right on both the parties to appoint their own arbitrator. If any one of the parties do not appoint another arbitrator of its own choice, there is no bar under the arbitration clause that the single arbitrator cannot enter into the reference. Clause (b) of Section 9 of the Arbitration Act provides that if one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for fifteen clear days after the service by the other party of a notice in writing to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent. In view of this provision, the arbitrator appointed by the respondent was entitled to act as a sole arbitrator. ( 12 ) THE core question is whether the arbitrator misconducted himself or not. In this respect, three aspects have to be examined : 1. the procedure adopted by the arbitrator ; 2. whether the claim of the respondent-company was not in accordance with the terms of the agreement : 3. whether the claim of the respondent was barred by time. We deal with all these aspects in seriatim. I-Procedure : ( 13 ) THE appellant-company was given due notice and none on behalf of the appellant appeared before the arbitrator. It did not file any objection. The arbitrator was required to give notice to the parties. If one of the parties could not appear, it cannot be held that the arbitrator misconducted himself. ( 14 ) IN this respect, one of the submissions raised by the learned counsel for the appellant is that the arbitrator submitted an application under Section 28 of the Arbitration Act for extending the time for giving award and the Court allowed the application on May 3, 1997 giving him one month further time to give award. ( 14 ) IN this respect, one of the submissions raised by the learned counsel for the appellant is that the arbitrator submitted an application under Section 28 of the Arbitration Act for extending the time for giving award and the Court allowed the application on May 3, 1997 giving him one month further time to give award. It is true that while the Court extending time has to act judicially but It has to be shown that there were circumstances which did not justify to extend the time. The arbitrator had entered into reference on June 14, 1996. It fixed various dates of hearing and the hearing could not complete. The appellant did not appear before the arbitrator. In case the hearing could not complete and the Court extended time for giving award. It cannot be held that it acted illegally. II- Misconduct : ( 15 ) THE next contention is that the arbitrator could give award in respect of a claim, which is covered under the agreement and on evidence which is produced before it in support of such claim. If the amount claimed is not covered either in the agreement or the award is based on no evidence, the said award can be impeached on the ground that the arbitrator misconducted himself. ( 16 ) AN award can be set aside on the grounds enumerated under Section 30 of the Arbitration act, 1940. Clause (a) of Section 30 of the Arbitration Act provides that if an arbitrator or umpire has misconducted himself of the proceedings, it can be set aside. It can also be set aside under clause (c) of Section 20 that the award has been improperly procured or is otherwise invalid. The award in question does not assign any reason for accepting the claims of the respondent. The award, however, cannot be impeached merely on the ground that it accepts the claim without assigning any reason. In Raipur Development Authority v. Chikhamal Contractors, AIR 1990 SC 1426 , it was held that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support. In para 38 of the judgment, the Court observed : "38. In Raipur Development Authority v. Chikhamal Contractors, AIR 1990 SC 1426 , it was held that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support. In para 38 of the judgment, the Court observed : "38. Having given our careful and anxious consideration to the contentions urged by the parties we feel that law should be allowed to remain as it is until the competent Legislature amends the law. In the result we hold that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support except where the arbitration agreement or the deed of submission or an order made by the Court such as the one under Section 20 or Section 21 or Section 34 of the Act or the statute governing the arbitration requires that the arbitrator or the umpire should give reasons for the award. These cases will now go back to the Division Bench for disposal in accordance with law and the view expressed by us in this decision. " ( 17 ) IN Ispat Engineering and Foundry Works v. Steel Authority of India Ltd. , JT 2001 (6) SC 1, where the award in question was non-speaking one, it was held that such award cannot be set aside on reappraisal of evidence by the Court. The Court relied upon the decision of Jivraj Bhai u. S. and Ors. v. Chintaman Rao Balaji and Ors. . 1964 (5) SCR 480 , wherein it was held that it is not open to the Court to speculate where no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion and it is not open to the Court to attempt to assess the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award. The Court, however, noted that the award can be challenged if it is contrary to the terms of agreement itself. Paragraph 5 of the judgment reads as under : "5. Be it noted that the award of the arbitrator is ordinarily final and conclusive unless a contra intention is disclosed in the agreement itself. The Court, however, noted that the award can be challenged if it is contrary to the terms of agreement itself. Paragraph 5 of the judgment reads as under : "5. Be it noted that the award of the arbitrator is ordinarily final and conclusive unless a contra intention is disclosed in the agreement itself. This Court in Raliaram (Union of India) v. A. L. Ralliaram. 1964 (3) SCR 164 , stated that right or wrong the decision of the arbitrator is binding excepting in the case of error of law on the face of It or in the event the award itself or in a document actually incorporated in it, there is found some legal proposition which stands out to be the basis of the award and which is erroneous. Raliaram decision expressly records that the civil courts cannot exercise apparent power over the decision of an arbitrator, wrong or right irrespective (excepting however the situation noticed above ). " ( 18 ) IN case the award is challenged on the ground that the arbitrator made the award against the terms of the contract or against any provisions of law, non-disclosure of reasons itself will not put a curtain on the Court to find out as to whether the arbitrator misconducted himself. If on the face of the award or other material which is placed before the Court, it comes to the conclusion that the arbitrator has awarded the amount in contravention of the terms of contract or it is against the law itself, it can examine the relevant aspect which makes the award invalid under law. ( 19 ) IN Dandasi Sahu v. State of Orissa, AIR 1990 SC 1128 , the Supreme Court found that the amount awarded was disproportionately high having regard to the original claim made and in totality of the circumstances, it would certainly be a case where the arbitrator could be said to have not applied his mind amounting to legal misconduct. ( 20 ) IN Steel Authority of India Ltd. v. J. C. Budharaja. , Government and Mining Contractor, AIR 1999 SC 3275 , Honble Supreme Court held that even if reasons are not recorded in the award but the claim itself was entertained for prohibited items, such award can be set aside. ( 20 ) IN Steel Authority of India Ltd. v. J. C. Budharaja. , Government and Mining Contractor, AIR 1999 SC 3275 , Honble Supreme Court held that even if reasons are not recorded in the award but the claim itself was entertained for prohibited items, such award can be set aside. The supreme Court relied upon the observation in the case of H. P. State Electricity Board v. R. J. Shah and Company, (1999) 4 SCC 214 , which reads as under : "in order to determine whether the arbitrator has acted in excess of jurisdiction what has to be seen is whether the claimant could raise a particular dispute or claim before the arbitrator. If the answer is in affirmative, then it is clear that arbitrator would have the jurisdiction to deal with such a claim. On the other hand if the arbitration clause or a specific term in the contract or the law does not permit or give the arbitrator the power to decide or to adjudicate on a dispute raised by the claimant or there is a specific bar to the raising of a particular dispute or claim, then any decision given by the arbitrator in respect thereof would clearly be in excess of jurisdiction. " ( 21 ) IN Sikkim Subha Associates v. State of Sikkim, AIR 2001 SC 2002, the Apex Court laid down guiding principles when an award can be set aside. One of the principles laid down is that if the arbitrator has not applied his mind in the matter into the controversy and yet has adjudicated upon those matters, in law there can be no adjudication made on them. In paragraph 13 the Court observed : "in other words, if the arbitrator or umpire is found to have not applied his mind to the matters in controversy and yet, has adjudicated upon those matters in law, there can be no adjudication made on them. " In paragraph 14, it was further clarified as under :"it is also, by now. well settled that an arbitrator is not a conciliator and his duty is to decide the dispute submitted to him according to the legal rights of the parties and not according to what he may consider it to be fair and reasonable. " In paragraph 14, it was further clarified as under :"it is also, by now. well settled that an arbitrator is not a conciliator and his duty is to decide the dispute submitted to him according to the legal rights of the parties and not according to what he may consider it to be fair and reasonable. Arbitrator was held not entitled to ignore the law or misapply it and cannot also act arbitrarily, irrationally, capriciously or independently of the contract--See Rajasthan State Mines and Minerals Ltd. v. Eastern Engineering Enterprises, 1999 (9) SCC 283 : 1999 AIR SCW 3644 : AIR 1999 SC 3627 . " ( 22 ) THE parties had entered into an agreement in respect of execution of contract work. The details regarding payment and damages were contained in the agreement. The arbitrator could not travel beyond the terms of the agreement. In Continental Construction Co. Ltd. v. State of madhya Pradesh, AIR 1988 SC 1166 . It was held that the contractor was not entitled to claim for extra cost in view of the clauses of the contract and the arbitrator could not allow such claim. The Court can examine the terms of the agreement in order to find out illegality of the claim of the claimant regarding extra cost towards rise in prices of the material and labour. ( 23 ) IN New India Civil Erectors (P.) Ltd. v. Oil and Natural Gas Corporation, AIR 1997 SC 980 , where the arbitrator had awarded the sum in respect of certain items which were prohibited under the agreement between the parties, the Court observed as under : "it is axiomatic that the arbitrator being a creature of the agreement, must operate within the four corners of the agreement and cannot travel beyond it. More, particularly, he cannot award any amount which is ruled out or prohibited by the terms of the agreement. In this case, the agreement between the parties clearly says that in measuring the built-up area the balcony areas should be excluded. The arbitrators could not have acted contrary to the said stipulation and awarded any amount to the appellant on that account. " ( 24 ) WE have referred to various claims submitted by the respondent before the arbitrator and most of the Items were not covered by the agreement. The respondent had claimed Rs. 51,83,639 in respect of work executed. The arbitrators could not have acted contrary to the said stipulation and awarded any amount to the appellant on that account. " ( 24 ) WE have referred to various claims submitted by the respondent before the arbitrator and most of the Items were not covered by the agreement. The respondent had claimed Rs. 51,83,639 in respect of work executed. According to it, the cost of work executed was Rs. 1,77,27,561 out of which he was paid Rs. 1,25,43,902 and the balance amount remained as Rs. 51,83,639. The respondent, however, made extra claims. The total amount of such extra claims comes to Rs. 1,54,57,369 besides the interest on such amount. It has to be examined whether such amount claimed was covered under the terms of the agreement. ( 25 ) WE are considering some of the claims, according to their nature in terms of contract. Claim No. 8 ( 26 ) IT was for interest of Rs. 42,64,798 at the rate of 24% per annum for the period the running bills and the final bill suffered delay. Para 33 of the agreement in this respect reads as under : "33. DELAYED PAYMENT any amount payable by the Employer to the Contractor in pursuance of any certificate given by the Executive Engineer hereunder shall if not paid within the "period for honouring Certificates" named in the Appendix as the "rate of interest for delayed payment" from the date upon which such sum ought to have been paid by the employer until payment. " ( 27 ) IN accordance with the aforesaid clause of agreement, the contractor will be entitled to interest on delayed payment only when a certificate is given by the Executive Engineer. If, however, the Executive Engineer does not find that there was any delay on the part of the employer, he cannot seek any amount as interest on the delayed payment. It has to be certified. The contractor may say that the delay in payment was caused by the employer. On the other hand, the appellant may say that the respondent himself delayed in execution of the work and it is itself liable to pay damages under clause 23 of the agreement which reads as under : "23. It has to be certified. The contractor may say that the delay in payment was caused by the employer. On the other hand, the appellant may say that the respondent himself delayed in execution of the work and it is itself liable to pay damages under clause 23 of the agreement which reads as under : "23. DAMAGES FOR NON COMPLETION if the contractor fails to complete the work by the date of completion stated in the Appendix or within any extended lime under Clause (22) hereof and the Executive Engineer certifying writing that in their opinion the same ought reasonable to have been completed, the contractor shall pay or allow the Employer the sum named in the Appendix as "liquidated Damages" for the period during which the said work shall remain incomplete and the employer may deduct such damage from any moneys due to the contractor. " ( 28 ) IT may be noted that according to the claim of the respondent himself, the amount due for the work done was Rs. 51,83,639 and the interest on the balance amount is Rs. 42,64,798. In accordance with the terms of Clause (33) of the agreement, the respondent-company is not entitled to any such payment unless certified by the Executive Engineer. Claim No. 11 ( 29 ) RS. 14,86,772 has been claimed for the payment of loss of profit at the rate of 15% due to prolongation of the work. In this respect, a reference to Clause 13 of the agreement may be made which provides that time will be essence of the contract and the contractor will adhere to the proportionate time and in case of delay on the part of the contractor to give proportionate progress in proportionate time, then the Executive Engineer may recover by way of liquidated damages the amount calculated at 1% of the amount of short progress. There was no agreement that if the work is not done within the stipulated time, the contractor shall be entitled to any damages. The petitioner in paragraph 3 of the Writ Petition No. 9086 of 1993 stated that the time for completion of the work was six months from the date of start of work, i. e. , with effect from 4. 4. 1985. The petitioner in paragraph 3 of the Writ Petition No. 9086 of 1993 stated that the time for completion of the work was six months from the date of start of work, i. e. , with effect from 4. 4. 1985. In paragraph 5, the reason of delay of the work was given and in paragraph 6, it was stated that the work was completed on August 31, 1987. Paragraphs 5 and 6 of the writ petition read as under : "5. That, however, on account of various factors, including litigation and acute paucity of funds, the work under the project remained held up for a considerable long time. It also remained held up on account of communal disturbances. 6. That however, ultimately, the work was completed on August 31, 1987. The petitioner thereafter submitted the final bill to the authority with full details. " In absence of any agreement that if the work is completed beyond certain period the contractor shall be liable to loss of profit at 15% due to prolongation of work, the respondent was not entitled to payment of such amount. Claim No. 5 ( 30 ) THIS claim is for Rs. 18,73,121 for payment of enhanced rate over and above tender rate for the quantum of work executed beyond the stipulated date of completion since earlier progress in the statutory period was due to default and laches committed by the appellant. The contractor was to be paid at the rate specified under the agreement. In respect of rates not mentioned in the price schedule, the price was to be fixed by the architects. There was no term in the agreement which provides that contractor shall be entitled at the enhanced rate over and above the tender rate in case the work is not completed within the stipulated period. In respect of rates not mentioned in the price schedule, the price was to be fixed by the architects. There was no term in the agreement which provides that contractor shall be entitled at the enhanced rate over and above the tender rate in case the work is not completed within the stipulated period. In this respect, the relevant part of Clause 2 (g) of the agreement reads as under : "the contractor shall forthwith comply with and execute any work comprised in such architects instructions provided always that verbal instruction, directions and explanation given to the contractor or his Foreman upon the works by the Executive Engineer/architect shall if involving a variation be confirmed in writing by the contractor within seven days and not dissented from in writing within further period of seven days by the Executive Engineer/architect such shall be deemed to be the Executive Engineer/architects instructions without the scope of contract. Rates of items not mentioned in the Prices Schedule of quantities shall be fixed by the architects/executive Engineer in compliance with the Architects/ Executive Engineers, instructions as aforesaid invoices work and or loss beyond that contemplated by the contractor, then unless the same were issued owing to some breach of this contract by the contractor, the employer shall pay to the contractor the price of said work as an extra to be valued as herein after provided and/or expenses and or loss. " ( 31 ) CLAUSE 51 of the agreement provides for market fluctuation which reads as under : "51. MARKET FLUCTUATION the contract prices shall be based on current market rates for labour and material and is not subject to any increase in such rates. " Clause 51 clearly provides that the contractor shall not be entitled to any Increased rate because market rate is fluctuating. Claim No. 9 ( 32 ) A sum of Rs. 5,14,700 has been claimed in respect of items which have been paid at lesser rate due to improper analysis of rates and non-reckoning of the actual cost of material reigning at the time of incorporation of the same in addition, substituted or altered items. ( 33 ) AS noted above, the rates which are specified in the contract are to be paid. The contractor is not entitled to claim the rate of variance after the tender was submitted on the rate given by them. ( 33 ) AS noted above, the rates which are specified in the contract are to be paid. The contractor is not entitled to claim the rate of variance after the tender was submitted on the rate given by them. It will be taken that the tender was submitted giving specified rate and accepted by the parties. Later on, it is not entitled to vary because fluctuation of the market or it was wrongly mentioned. Claim No. 6 ( 34 ) RS. 8,09,100 was claimed for storing the material at Sangeet Samitl causing expenditure over payment of Supervisor and Chaukldar. Rs. 4,91,500 payment to the Supervisors and Rs. 4,17,600 as payment to Chaukidars. Clause 4 of the agreement provides that it will be the responsibility of the contractor for water, power and maintenance at his cost during the execution of work all necessary things required for execution of work. The relevant part reads as under : "the contractor shall supply, fix and maintain at his cost during the execution of any works all the necessary centering, scaffolding, staging, planking timbering, structing, shorting, fencing, digging, watching and lighting by night as well as by day required not only for proper execution and protection of the said works, but also for the protection of the public and the safety of any adjacent roads, streets, cellars, vaults ovens, pavements, walls houses, building and all other erections, meters or things, and the contractor shall take down and remove any or all such centering scaffolding, staging, planking, timbering, structing, shorting etc. as occasion shall require or when ordered so to do, and shall fully reinstate and make good all matters and things disturbed during the execution of the works, to the satisfaction of the Architects/executive engineer. " Claim No. 7 ( 35 ) THIS claim is for Rs. 6. 64,783 as a cost of material wastage due to rehandling of the same by the transport agency from the initial dump to the site of work, in the night. As noted above under Clause 4 of the agreement, the responsibility was of the contractor to protect his own material at his own cost. Claim No. 10 ( 36 ) RS. 6,97,500 has been claimed as payment of extra expenditure incurred on watch and ward because of delay of taking over the building. It is alleged that the work was completed on 31. 8. Claim No. 10 ( 36 ) RS. 6,97,500 has been claimed as payment of extra expenditure incurred on watch and ward because of delay of taking over the building. It is alleged that the work was completed on 31. 8. 1997 but the Allahabad Development Authority took over the building in piecemeal by allotment of shops to the shopkeepers directly. ( 37 ) THE contractor was only to complete the work and thereafter he was not required to keep the constructed work with him. Clause 34 of the agreement provides that after completion of the work, the Executive Engineer shall certify in writing that the work has been completed. The contractor under the said agreement is not entitled to continue to occupy it and claim the amount for keeping watch and ward. Claim No. 12 ( 38 ) IN this head, the respondent has claimed Rs. 5,31. 826. 83 at 3% on the total cost of work done, i. e. . Rs. 1,77,27,561. 00 on the ground that the Allahabad Development Authority had no arranged permit for plying vehicles up to the site of work round the clock but as it failed to arrange the same, the respondent suffered losses. ( 39 ) AS noted in Clause 4, it was the responsibility of the contractor himself to arrange for the contract work. Claim No. 14 ( 40 ) RS. 5,78,400 has been claimed as damages Incurred on the idleness of the labour and machinery from time to time due to failure and breaches on the part of the department. ( 41 ) ADMITTEDLY the contract work was to be executed by the respondent and it was to employ labour. There is no term in the agreement which stipulates that on account of delay of work any loss on account of labour and employees shall be payable by the A. D. A. Claim No. 15 ( 42 ) IN this item, the respondent has claimed Rs. 2. 35,858 as interest payable on the cost of materials purchased (cement, steel) at 24%. 2. 35,858 as interest payable on the cost of materials purchased (cement, steel) at 24%. The material was to be purchased by the contractor and there is nothing in the agreement which stipulates that interest on the materials shall be payable by the A. D. A. If the material has been purchased, the price of such material, if it is covered under the agreement, will be recovered but there is nothing to show that any interest on such amount is payable under the agreement. INTEREST ( 43 ) THE arbitrator has awarded interest at 18% without taking note of the fact that the claimant-respondent was himself guilty of laches in submitting the claim petition before the arbitrator and claimed exaggerated amount. III. Claim barred by time : ( 44 ) IT may further be noted that the various claims made by the respondent are barred by time. The arbitrator could not award the amount which, on the date of submission of claim petition before him, is barred by time. Section 3 of the Limitation Act provides that even if no objection is raised, the authority has to reject the claim if it is barred by time. According to the respondent, the work was completed on August 31, 1987. Thereafter he wrote letters for payment of the amount on various dates. In para 14 of the Writ Petition No. 9086 of 1993, the respondent has referred to the various letters alleged to have been sent by the respondent to the appellant. The respondent is alleged to have sent final bill on October 9, 1989 to the appellant. The respondent filed writ petition after about five years in 1993 after completion of the contract work. The mere correspondence will not extend the period of limitation. The cause of action arose from the date the notice was given by the respondent for payment of amount. The mere fact that the appellant did not give any reply or denied its claim, will not extend the period of limitation. In Steel authority of India v. J. C. Budharaja, Government and Mining Contractor, AIR 1999 SC 3275 , in paragraph 29, it was observed as under : "29. The mere fact that the appellant did not give any reply or denied its claim, will not extend the period of limitation. In Steel authority of India v. J. C. Budharaja, Government and Mining Contractor, AIR 1999 SC 3275 , in paragraph 29, it was observed as under : "29. Applying the aforesaid ratio in the present case, right to refer the dispute to the arbitrator arose in 1979 when contractor gave a notice demanding the amount and there was no response from the appellant and the amount was not paid. The cause of action for recovery of the said amount arose from the date of the notice. Contractor cannot wait indefinitely and is required to take action within the period of limitation. " In paragraph 31, the Court further observed as under :"from these facts, it is apparent that claim before the arbitrator in November-December, 1985 was apparently barred by period of limitation. Letter dated September 3, 1983 written by the appellant repudiating the respondents claim on account of damages or losses sustained by him would not give fresh cause of action. On that date cause of action for recovering the said amount was barred by the period of three years prescribed under Article 137 of the Limitation Act, 1963. Under Section 3 of the Limitation Act, it was the duty of the arbitrator to reject the claim as it was on the face of it, barred by the period of limitation. " ( 45 ) WE are of the opinion that the arbitrator misconducted himself and acted in excess of his jurisdiction. In this view, the award is liable to be set aside. ( 46 ) IN the result, the appeal is allowed with cost. The order of the court below dated 24. 5. 1999 and the award of the arbitrator dated 23. 5. 1997 are hereby set aside and the matter is remitted to the arbitrator to take decision afresh keeping in view the observation made in this judgment.