Judgment :- S. Rajeswaran, J. 1. This O.P. has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') to set aside the arbitral award dated 22.12.2001 passed by respondents 2 to 4, the arbitrators. 2. The petitioner-Water Supply and Sewerage Board invited tenders in July 1991 for manufacture, supply, laying, jointing, testing and commissioning of pre-stressed concrete pipes of 1200 mm dia as per contract No.I and 1000 mm dia pre-stressed concrete pipes as per contract No.II. The tenders were finalised and the work orders were issued to first respondent on 16.3.1993 and 7.4.1993 and the period of contract commenced only from 12.5.1993 and 14.6.1993 when agreements were entered into between the petitioner-Board and the 1st respondent. The total period of completion of the contract in respect of contract No. I is 20 months and in respect of contract No.II it is 18 months. On 30.9.1996 1st respondent completed the contract after availing 4 extensions. The 1st respondent applied for first extention on 28.10.1994 and again on 7.11.1994 for a period of six months i.e., up to 30.7.1995. The petitioner-Board considered the application of 1st respondent and granted time for completion of the contract upto 11.10.1995 without imposing any pre-estimated damages. Clause 47 of the tender agreement provides for levy of damages for non-performance of the contract in time. 1st respondent did not complete the work even during the first extension granted by the petitioner. 3. Thereafter, the 1st respondent made Second Application dated 12.8.1995 for extension of time from 11.10.1995 to 31.3.1996. The petitioner granted second extension without prejudice to any of the remedies under the contract and after reserving the right to levy pre-estimated damages. The 1st respondent again sought for third extension of time from 1.4.1996 to 31.7.1996. The petitioner Board granted third extension up to 31.7.1996 subject to the condition of levying pre-estimated damages. The 1st respondent again sought for 4th extension of time for completing the contract from 1.8.96 to 30.9.96 and only on 30.9.1996, the 1st respondent completed the contract. 4. The petitioner invoking Clause 47 of the contract on 12.8.96 deducted a sum of Rs.92,26,208 in respect of pre-estimated damages in contract No. I and Rs.28, 65,310 in respect of pre-estimated damages in contract No.II. 4. The petitioner invoking Clause 47 of the contract on 12.8.96 deducted a sum of Rs.92,26,208 in respect of pre-estimated damages in contract No. I and Rs.28, 65,310 in respect of pre-estimated damages in contract No.II. The 1st respondent initiated steps for referring the matter for arbitration and on 22.10.2001 an award was passed by Arbitral Tribunal consisting of respondents 2 to 4 directing the petitioner to pay a sum of Rs.92,26,208 in respect of pre-estimated damages in contract No. I and Rs.28,65,310 in respect of pre-estimated damages in contract No.II. The Tribunal awarded a sum of Rs.8,77,500 in respect of additional claims, namely, surplus PSC pipes under contract No. I and interest on delayed payments to the tune of Rs.10,25,810 in respect of contract No.I and Rs.91,556 in respect of contract No.II. Thus, the Arbitral Tribunal directed the Board to pay a sum of Rs.1,11,29,518 in respect of contract No. I and Rs.29,56,866 in respect of contract No.II totalling a sum of Rs.1,40,86.384 to first respondent. Challenging the said award dated 22.12.2001. The above O.P. has been filed under Section 34 of the Act, 1996. 5. The petitioner raised the following grounds to set aside the award dated 22.12.2001: (1) The award passed by the arbitrators in respect of pre-estimated damages directing the petitioner to pay the amount with interest is clearly contrary to the agreement for which the Arbitral Tribunal has no jurisdiction at all. (2) All the claims of 1st respondent are time-barred as the petitioner withheld the amount due to non-completion of the contract on 12.8.1996 and the cause of action for initiating arbitral proceeding should be within 3 years. But first respondent initiated the proceedings well after the permissible date i.e., 12.8.1999 by filing O.P. No.383/2000 on 19.6.2000. (3) Though the limitation point was specifically taken in the counter statement and an issue was framed to that effect, the Arbitral Tribunal failed to decide the issue by holding that the issue deemed to have been not pressed which is illegal and against the provisions of the Limitation Act. (4) The arbitrators did not look into Clauses 47 and 51 of the agreement and according to these clauses, liquidated damages can very well be levied even if extension of time had been granted. (4) The arbitrators did not look into Clauses 47 and 51 of the agreement and according to these clauses, liquidated damages can very well be levied even if extension of time had been granted. (5) The arbitrators erred in law in holding that the actual loss would be proved to levy pre-estimated damages which is not only contrary to the Clause 47 of the agreement but also Section 74 of the Indian Contract Act. (6) The arbitrators are wrong in holding that the delay was caused due to 'force majeure' condition pursuant to Clause 48 of the agreement. Force majeure condition in Clause 48 will not at all be applicable in this case. (7) The award under the heading PSC pipes is contrary to the agreement conditions. (8) The award granting interest is liable to be set aside on the ground that there was no delay at all and even otherwise the agreement does not provide for any interest payment. 6. The 1st respondent filed a counter statement and supported the award. 7. The learned Senior Counsel for the petitioner submitted that the award is to be set aside on the sole ground that it is contrary to the clause contained in the agreement, especially Clause 47, which enables the petitioner-Board to levy pre-estimated damages and for that purpose there is no necessity to prove the actual loss. According to him, the Tribunal directed the petitioner-Board to return the sum recovered by them towards the liquidated damages to the 1st respondent/claimant, without following Clause 47 of the agreement and thereby the Tribunal has passed the award in violation of Section 28(3) of the Act, 1996. 8. Per contra, learned counsel for the 1st respondent submitted that only after rendering a finding that the petitioner alone is responsible for the delay in the execution of the work, the Arbitral Tribunal directed the petitioner. Board to return the money recovered from them by way of pre-estimated damages. 9. Heard the learned Senior Counsel for the petitioner and the learned counsel for the first respondent. I have also perused the documents and judgments referred to by them in support of their submissions. 10. Clause 47 of the General Conditions of the Contract (GCC) deals with pre-estimated damages. 9. Heard the learned Senior Counsel for the petitioner and the learned counsel for the first respondent. I have also perused the documents and judgments referred to by them in support of their submissions. 10. Clause 47 of the General Conditions of the Contract (GCC) deals with pre-estimated damages. As per Clause 47(1) of the agreement, if the contractor fails to complete the work, he shall pay the pre-estimated damages at 1/5th of one percent of contract value for each incomplete part and as per Clause 47(2), the amount of pre-estimated damages shall be subject to a maximum of 10% of the contract value. This pre-estimated damages will not apply if the delay is in respect of an event of "force majeure" as per Clause 48 of GCC. Time is considered to be the essence of the contract as per Clause 51 of the GCC and if, however the failure of the contractor to complete the work as per stipulated date arises from delays on the part of the petitioner in supplying the materials or equipment, an appropriate extension of time would be given without any extra financial commitment to the petitioner-Board. 11. Admittedly, 4 extensions were sought for by 1st respondent herein to complete the work and excepting the 1st extension granted, the petitioner. Board granted extension reserving its right to levy pre-estimated damages as per Clause 47 of GCC. Therefore, the petitioner-Board is within its right to levy pre-estimated damages and I find force in the submissions of the learned Senior Counsel appearing for the petitioner that the contrary finding to the effect by the arbitrators is against the terms of the contract and thereby the Arbitral Tribunal has violated Section 28(3) of the Act, 1996. Sub-clause (3) of Section 28 stipulates that Arbitral Tribunal shall decide in accordance with the terms of the contract and not otherwise. 12. But the learned counsel for the 1st respondent reiterated that in this case the petitioner-Board did not prove the actual loss and in the absence of proving the actual loss, pre-estimated damages could not be levied at all. The learned counsel took me to the findings of the Arbitral Tribunal to this effect, wherein the Arbitral Tribunal has held that there is absolutely no proof of any loss suffered by the petitioner-Board. 13. The learned counsel took me to the findings of the Arbitral Tribunal to this effect, wherein the Arbitral Tribunal has held that there is absolutely no proof of any loss suffered by the petitioner-Board. 13. The learned Senior, Counsel appearing for the petitioner has also drawn my attention to Para 174 of the award, wherein the Tribunal felt that 1st respondent deserves sympathetic treatment in respect of this claim. The learned Senior Counsel submitted that sympathetic consideration can never be a ground for directing the petitioner to return the amount of liquidated damages, that too, by ignoring Clause 47 of the GCC. For a better understanding, the relevant portion of the award is extracted below: "174. The Claimants request here is not to direct the Respondents to pay any amount from their pocket. This claim consists of the amounts withheld by the Respondents in the running bills. In other words, this claim represents payment of the amounts due to the Claimants, which was not paid by the Respondents on the ground of delay. We have considered this question very carefully in all aspects. We feel that the Claimants deserve sympathetic treatment in respect of this claim. The Claimants were forced with myriad problems. The work order was delayed. Larger number of monsoons intervened. Unforeseen subterranean impediments prevented smooth progress. Additional work at the fag end of the period was imposed. There was delay in payment of bills. M/s. S.S.L. was treated differently. Land chosen by the Claimants gave its own problems. Reclamation took its own toll. Telephone lines and the like posed problems. The respondents caused delay in securing departmental clearance. Extension was granted without imposing damages at least twice. Though, we are denying the Claimants various additional claims based on the distance of the land chosen from the workspot, which did cause additional burden on them, we feel that it is a factor, which cannot be totally ignored. Krishna Water reached Chennai after the Claimants concluded their work. There is absolutely no proof of any loss suffered by the Respondents. 175. Set against the various averments mentioned above and considering the claims sympathetically, we hold that ends of justice will be met more by directing the Respondents to pay the entire amount claimed than by making a direction to apportion the blame and truncate the claim amount. There is absolutely no proof of any loss suffered by the Respondents. 175. Set against the various averments mentioned above and considering the claims sympathetically, we hold that ends of justice will be met more by directing the Respondents to pay the entire amount claimed than by making a direction to apportion the blame and truncate the claim amount. We decide this issue in this manner and direct the Respondents to pay the amount claimed in the two contracts as shown as claimed. 14. In K.P. Poulose v. State of Kerala, AIR 1975 SC 1259 , the Hon'ble Supreme Court held that if the arbitrator on the face of the award arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision such an award is to be set aside. 15. In State of J & K. v. Dev Dutt Pandit, AIR 1999 SC 3196 , the Hon'ble Supreme Court held that when the terms of the contract making the contractor responsible for any loss, damage to works and loss due to idle employees, claim raised by the contractor for the loss caused due to early on set of monsoon and due to idle labour could not be awarded. 16. In Continental Construction Co. Ltd. v. State of M.P., AIR 1988 SC 1166 , the Hon'ble Supreme Court held that the arbitrator is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law and if he does not, he can be set right by the Court provided his error appears on the face of the award. 17. In Govt. of A.P. v. P.V. Subba Naidu, AIR 1990 NOC 90 (AP), A Division Bench of the Andhra Pradesh High Court held that an arbitrator cannot award any amount he likes, either on grounds of mercy, kindness or otherwise and if he is permitted to do so, the very sanctity of contract disappears. 18. In ISPAT Engineering & Foundry Works v. Steel Authority of India Ltd, 2001 (6) SCC 347 , the Hon'ble Supreme Court held that an arbitrator has no authority or jurisdiction beyond that defined by the terms of the contract or what the parties desire under the contract. 18. In ISPAT Engineering & Foundry Works v. Steel Authority of India Ltd, 2001 (6) SCC 347 , the Hon'ble Supreme Court held that an arbitrator has no authority or jurisdiction beyond that defined by the terms of the contract or what the parties desire under the contract. The Hon'ble Supreme Court further held that the arbitrator has no authority to direct payment of any charges when the agreement does not provide for the same. 19. In State of Orissa v. Sudhakar Das, 2000 (3) SCC 27 , the Hon'ble Supreme Court held that in the absence of any escalation clause in the agreement, an arbitrator cannot assume any jurisdiction to award any amount towards escalation. 20. In Rajasthan State Mines & Minerals Ltd. v. Eastern Engg, Enterprises, AIR 1999 SC 3627 , the Hon'ble Supreme Court observed when a claim is prohibited by the terms of the contract, the arbitrator cannot grant the same, even though it was referred to him. 21. In M/s. Skyama Charan Agarwala & Sons v. Union of India, 2002 (5) SC 444, the Hon'ble Supreme Court reiterated the principle that if the arbitrator ignored the relevant clause of contract while deciding the claim, the award with reference to that claim is to be set aside. 22. In State of Rajasthan v. Nav Bharat Construction Co., 2006 (1) SCC 86 , the Hon'ble Supreme Court clearly reiterated the principles that arbitrator cannot make the award ignoring the terms of the contract. 23. The learned Senior Counsel appearing for the petitioner besides citing and relying on the above judgments, placed strong reliance on the judgment of the Hon'ble Supreme Court in ONGC Ltd v. Saw Pipes Ltd., 2003 (2) CTC 282 : 2003 (5) SCC 705 , to submit that the award pass ignoring Clause 47 of the General Conditions of the Contract (GCC) is to set aside, as such an award is violative of Section 28(2) and (3) of the Act, 1996 and Sections 73 and 74 of the Contract Act, 1872. 24. In this judgment, the Hon'ble Supreme Court has laid down the law as follows: "40. It cannot be disputed that for construction of the contract, it is settled law that the intention of the parties is to be gathered from the words used in the agreement. 24. In this judgment, the Hon'ble Supreme Court has laid down the law as follows: "40. It cannot be disputed that for construction of the contract, it is settled law that the intention of the parties is to be gathered from the words used in the agreement. If words are unambiguous and are used after full understanding of their meaning by experts, it would be difficult to gather their intention different from the language used in the agreement. If upon a reading of the document as a whole, it can fairly be deduced from the words actually used therein that the parties had agreed on a particular term, there is nothing in law which prevents them from setting up that term. (Re: Modi & Co. v. Union of India, AIR 1969 SC 9 : 1968 (2) SCR 565 ). Further, in construing a contract, the Court must look at the words used in the contract unless they are such that one may suspect that they do not convey the intention correctly. If the words are clear, there is very little the Court can do about it. (Re: Provash Chandra Dalui v. Biswanath Banerjee, 1989 Supp (1) SCC 487). 41. Therefore, when parties have expressly agreed that recovery from the contractor for breach of the contract is pre-estimated genuine liquidated damages and is not by way of penalty duly agreed by the parties, there was no justifiable reason for the Arbitral Tribunal to arrive at a conclusion that still the purchaser should prove loss suffered by it because of delay in supply of goods. 42. Further, in arbitration proceedings, the Arbitral Tribunal is required to decide the dispute in accordance with the terms of the contract. The agreement between the parties specifically provides that without prejudice to any other right or remedy if the contractor fails to deliver the stores within the stipulated time, the appellant will be entitled to recover from the contractor, as agreed, liquidated damages equivalent to 1% of the contract price of the whole unit per week for such delay. Such recovery of liquidated damages could be at the most up to 10% of the contract price of whole unit of stores. Such recovery of liquidated damages could be at the most up to 10% of the contract price of whole unit of stores. Not only this, it was also agreed that: (a) liquidated damages for delay in supplies will be recovered by paying the authority from the bill for payment of cost of material submitted by the contractor; (b) liquidated damages were not by way of penalty and it was agreed to be genuine pre-estimate of damages duly agreed by the parties; (c) this pre-estimate of liquidated damages is not assailed by the respondent as unreasonable assessment of damages by the parties. 43. Further, at the time when the respondent sought extension of time for supply of goods, time was extended by letter dated 4.12.1996 with a specific demand that the clause for liquidated damages would be invoked and the appellant would recover the same for such delay. Despite this specific letter written by the appellant, the respondent had supplied the goods which would indicate that even at that stage, the respondent was agreeable to pay liquidated damages. 44. On this issue, learned counsel for the parties referred to the interpretation given to Sections 73 and 74 of the Indian Contract Act in Chunilal V. Mehta & Sons Ltd v. Century Spg. and Mfg. Co. Ltd., AIR 1962 SC 1314 : 1962 Supp (3) SCR 549; Fateh Chand v. Balkishan Doss, AIR 1963 SC 1405 : 1964 (1) SCR 515 at p.526); Maula Bux v. Union of India, 1969 (2) SCC 554 ; Union of India v. Rampur Distillery and Chemical Co. Ltd., 1973 (1) SCC 649 ; and Union of India v. Raman Iron Foundry, 1974 (2) SCC 231 . 45. Relevant, parts of Sections 73 and 74 of the contract Act are as under: "73. Compensation for loss or damage caused by breach of contract. - When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. …….. ……… …… 74. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. …….. ……… …… 74. Compensation for breach of contract where penalty stipulated for. - When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Explanation. - A stipulation for increased interest from the date of default may be a stipulation by way of penalty." (emphasis supplied) 46. From the aforesaid Sections, it can be held that when a contract has been broken, the party who suffers by such breach is entitled to receive compensation for any loss which naturally arises in the usual course of things from such breach. These Sections further contemplate that if parties knew when they made the contract that a particular loss is likely to result from such breach, they can agree for payment of such compensation. In such a case, there may not be any necessity of leading evidence for proving damages, unless the Court arrives at the conclusion that no loss is likely to occur because of such breach. Further, in case where the Court arrives at the conclusion that the term contemplating damages is by way of penalty, the Court may grant reasonable compensation not exceeding the amount so named in the contract on proof of damages. However, when the terms of the contract are clear and unambiguous then its meaning is to be gathered only from the words used therein. In a case where agreement is executed by experts in the field, it would be difficult to hold that the intention of the parties was different from the language used therein. In such a case, it is for, the party who contends that stipulated amount is not reasonable compensation, to prove the same. 54. In a case where agreement is executed by experts in the field, it would be difficult to hold that the intention of the parties was different from the language used therein. In such a case, it is for, the party who contends that stipulated amount is not reasonable compensation, to prove the same. 54. It is true that if the Arbitral Tribunal has committed mere error of fact or law in reaching its conclusion on the disputed question submitted to it for adjudication then the Court would have no jurisdiction to interfere with the award. But this would depend upon reference made to the arbitrator: (a) if there is a general reference for deciding the contractual dispute between the parties and if the award is based on erroneous legal proposition, the Court could interfere; (b) it is also settled law that in a case of reasoned award, the Court can set aside the same if it is, on the face of it, erroneous on the proposition of law or its application; and (c) if a specific question of law is submitted to the arbitrator, erroneous decision in point of view does not make the award bad, so as to permit its being set aside, unless the Court is satisfied that the arbitrator had proceeded illegally. 55. In the facts of the case, it cannot be disputed that if contractual term, as it is, is to be taken into consideration, the award is, on the face of it, erroneous and in violation of the terms of the contract and thereby it violates Section 28(3) of the Act. Undisputedly, reference to the Arbitral Tribunal was not with regard to interpretation of the question of law. It was only a general reference with regard to claim of the respondent. Hence, if the award is erroneous on the basis of record with regard to the proposition of law or its application, the Court will have jurisdiction to interfere with the same. 61. The next question is whether the legal proposition which is the basis of the award for arriving at the conclusion that ONGC was not entitled to recover the stipulated liquidated damages as it is failed to establish that it has suffered any loss is erroneous on the face of it. 61. The next question is whether the legal proposition which is the basis of the award for arriving at the conclusion that ONGC was not entitled to recover the stipulated liquidated damages as it is failed to establish that it has suffered any loss is erroneous on the face of it. The Arbitral Tribunal after considering the decisions rendered by this Court in the cases of Fateh Chand v. Balkishan Dass, AIR 1963 SC 1405 : 1964 (1) SCR 515 at p.526; Maula Bux v. Union of India, 1969 (2) SCC 554 ; and Union of India v. Rampur Distillery and Chemical Co. Ltd., 1973 (1) SCC 649 arrived at the conclusion that­— "in view of these three decisions of the Supreme Court, it is clear that is that it was for the respondents to establish that they had suffered any loss, because of the breach committed by the claimant in the supply of goods under the contract between the parties after 14.11.1996. In the words we have emphasized in Maula Bux v. Union of India, 1969 (2) SCC 554 , it is clear that if loss in terms of money can be determined, the party claiming the compensation 'must prove' the loss suffered by him.” 64. It is apparent from the aforesaid reasoning recorded by the Arbitral Tribunal that it failed to consider Sections 73 and 74 of the Indian Contract Act and the ratio laid down in Fateh Chand v. Balkishan Dass, AIR 1963 SC 1405 : 1964 (1) SCR 515 at p.526, wherein it is specifically held that jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; and compensation has to be reasonable. Under Section 73, when a contract has been broken, the party who suffers by such breach is entitled to receive compensation for any loss caused to him which the parties knew when they made the contract to be likely to result from the breach of it. Under Section 73, when a contract has been broken, the party who suffers by such breach is entitled to receive compensation for any loss caused to him which the parties knew when they made the contract to be likely to result from the breach of it. This Section is to be read with Section 74, which deals with penalty stipulated in the contract, inter alia (relevant for the present case) provides that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, the party complaining of breach is entitled, whether or not actual loss is proved to have been caused, thereby to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named. Section 74 emphasizes that in case of breach of contract, the party complaining of the breach is entitled to receive reasonable compensation whether or not actual loss is proved to have been caused by such breach. Therefore, the emphasis is on reasonable compensation. If the compensation named in the contract is by way of penalty, consideration would be different and the party is only entitled to reasonable compensation for the loss suffered. But if the compensation named in the contract for such breach is genuine pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss or such party is not required to lead evidence to prove actual loss suffered by him. Burden is on the other party to lead evidence for proving that no loss is likely to occur by such breach. Take for illustration if the parties have agreed to purchase cotton bales and the same were only to be kept as a stock-in-trade. Such bales are not delivered on the due date and thereafter the bales are delivered beyond the stipulated time, hence there is breach of the contract. The question which would arise for consideration is-whether by such breach the party has suffered any loss. If the price of cotton bales fluctuated during that time, loss or gain could easily be proved. But if cotton bales are to be purchased for manufacturing yam, consideration would be different. 66. The question which would arise for consideration is-whether by such breach the party has suffered any loss. If the price of cotton bales fluctuated during that time, loss or gain could easily be proved. But if cotton bales are to be purchased for manufacturing yam, consideration would be different. 66. In Maula Bux v. Union of India, 1969 (2) SCC 554 , the Court has specifically held that it is true that in every case of breach of contract the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree and the Court is competent to award reasonable compensation in a case of breach even if no actual damage is proved to have been suffered in consequence of the breach of contract. The Court has also specifically held that in case of breach of some contracts it may be impossible for the Court to assess compensation arising from breach. 67. Take for illustration construction of a road or a bridge. If there is delay in completing the construction of road or bridge within the stipulated time, then it would be difficult to prove how much loss is suffered by the society/State. Similarly, in the present case, delay took place in deployment of rigs and on that basis actual production of gas from platform B-121 had to be changed. It is undoubtedly true that the witness has stated that redeployment plan was made keeping in mind several constraints including shortage of casing pipes. The Arbitral Tribunal, therefore, took into consideration the aforesaid statement volunteered by the witness that shortage of casing pipes was only one of the several reasons and not the only reason which led to change in deployment of plan or redeployment of rigs Trident II platform B-121. In our view, in such a contract, it would be difficult to prove exact loss or damage which the parties suffer because of the breach thereof. In such a situation, if the parties have pre-estimated such loss after clear understanding, it would be totally unjustified to arrive at the conclusion that the party who has committed breach of the contract is not liable to pay compensation. It would be against the specific provisions of Sections 73 and 74 of the Indian Contract Act. In such a situation, if the parties have pre-estimated such loss after clear understanding, it would be totally unjustified to arrive at the conclusion that the party who has committed breach of the contract is not liable to pay compensation. It would be against the specific provisions of Sections 73 and 74 of the Indian Contract Act. There was nothing on record that compensation contemplated by the parties was in any way unreasonable. It has been specifically mentioned that it was an agreed genuine pre-estimate of damages duly agreed by the parties. It was also mentioned that the liquidated damages are not by way of penalty. It was also provided in the contract that such damages are to be recovered by the purchaser from the bills for payment of the cost of material submitted by the contractor. No evidence is led by the claimant to establish that the stipulated condition was by way of penalty or the compensation contemplated was, in any way, unreasonable. There was no reason for the Tribunal not to rely upon the clear and unambiguous terms of agreement stipulating pre-estimate damages because of delay in supply of goods. Further, while extending the time for delivery of the goods, the respondent was informed that it would be required to pay hence stipulated damages. 68. From the aforesaid discussions, it can be held that: (1) Terms of the contract are required to be taken into consideration before arriving at the conclusion whether the party claiming damages is entitled to the same. (2) If the terms are clear and unambiguous stipulating the liquidated damages in case of the breach of the contract unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty, party who has committed the breach is required to pay such compensation and that is what is provided in Section 73 of the Contract Act. (3) Section 74 is to be read along with Section 73 and, therefore, in every case of breach of contract, the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree. The Court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of a contract. The Court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of a contract. (4) In some contracts, it would be impossible for the Court to assess the compensation arising from breach and if the compensation contemplated is not by way of penalty or unreasonable, the Court can award the same if it is genuine pre-estimate by the parties as the measure of reasonable compensation." 25. In the above judgment, the Hon'ble Supreme Court has clearly held that: (1) when parties expressly agreed that recovery from the contractor for breach of contract is pre-estimated genuine, liquidated damages and is not by way of penalty duly agreed by the party, there was no justifiable reason for the Arbitral Tribunal to arrive at a conclusion that still the purchaser should prove the loss suffered by it because of delay in supply of goods. (2) When the terms of the contract are clear and unambiguous then its meaning is to be gathered only from the words used therein. (3) If the award is erroneous on the basis of the record with reference to the proposition of law or its application, the Court will have jurisdiction to interfere with the same. (4) As per Sections 73 and 74 of the Indian Contract Act, the jurisdiction of the Courts to award compensation in cases of breach of contract is unqualified except as to the maximum stipulated and the compensation is to be reasonable. (5) Section 74 of the Contract Act emphasizes that in case of breach of contract, the party complaining of the breach is entitled to receive reasonable compensation whether or not actual loss is proved to have been caused by such breach. (6) If the compensation named in the contract for such breach is genuine pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss. (6) If the compensation named in the contract for such breach is genuine pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss. (7) In certain contract, it would be difficult to prove the exact loss or damage and in such a situation, if parties have pre-estimated such loss after clear understanding, it would be totally unjustified to arrive at the conclusion that the party who has committed breach is not liable to pay compensation and it would be against the specific provisions of Sections 73 and 74 of the Indian Contract Act. 26. But the learned counsel for the 1st respondent/claimant submitted that the 'ONGC Ltd, judgment cited supra will not apply to the facts of the present' case and relied on the following judgments in support of his contentions: (1) In Hind Consin. Contractors v. State of Maharashtra, AIR 1979 SC 720 , the Hon'ble Supreme Court held that the question whether or not time was of the essence of the contract would essentially to be a question of the intention of the parties to be gathered from the terms of the contract. (2) In Ms. Arosan Enterprises Ltd v. Union of India, AIR 1999 SC 3804 , the Hon'ble Supreme Court, held that the agreement shall have to be considered in its entirety and on proper appreciation of the intent and purport of the clauses incorporated therein to arrive at, whether the time is the essence of the contract. (3) In Maula Bux v. Union of India, AIR 1970 SC 1955 , the Hon'ble Supreme Court held that forfeiture of a reasonable amount paid as earnest money does not amount to imposing a penalty, but if forfeiture is of the nature of penalty, Section 74 would apply. (4) In Fateh Chand v. Balkishan Dass, AIR 1963 SC 1405 , the Hon'ble Supreme Court held that Section 74 of the Contract Act undoubtedly says that the aggrieved party is entitled to receive compensation and thereby it merely dispenses with proof of actual loss or damage. It does not justify the award of compensation amount in consequence of the breach, no legal injury has at all resulted. (5) In State of UP. It does not justify the award of compensation amount in consequence of the breach, no legal injury has at all resulted. (5) In State of UP. v. Allied Constructions, 2003 (4) CTC 173 : 2003 (7) SCC 396 , the Hon'ble Supreme Court held that interpreting the contract is a matter within the jurisdiction of the arbitrator and once it is found that the view of the arbitrator is a plausible one, the Court will refrain itself from interfering. (6) In Sudhakar & Co., by Propr., M. Sivagnahambal v. The City Municipal Corporation, 1976 (89) LW 559 , this Court held that where a breach of contract has been committed, the party not in default is entitled to receive damages or compensation for the loss suffered as a consequence of the other party committing default and the party not in default is not entitled to make any profit out of the breach, committed by the other party. (7) In Divisional Controller, KSRTC v. Mahadeva Shetty, 2003 (7) SCC 197 , the Hon'ble Supreme Court held that the quantum of damage fixed in Motor Vehicles Accidents cases should be in accordance with the injury caused to the limbs and bodies. (8) In Pure Helium India (P) Ltd. v. Oil & Natural Gas Commission, 2003 (8) SCC 593 , the Hon'ble Supreme Court held that the arbitrator has jurisdiction to interpret the contract having regard to its terms and conditions, conduct of the parties, circumstances of the case and pleadings of the parties. 27. Relying on the above judgments, learned counsel for the 1st respondent submitted that the terms of the relevant clauses in the GCC were gone into by the arbitrators and only after finding that the delay is not attributable to 1st respondent and no actual loss was caused to the petitioner, the award was passed directing the petitioner to return the withheld amount with regard to pre-estimated damages, which cannot be set aside by this Court under Section 34 of the Act, 1996. 28. I am unable to countenance the arguments of the learned counsel for the 1st respondent. 28. I am unable to countenance the arguments of the learned counsel for the 1st respondent. When there is a specific clause, i.e., Clause 47 of the GCC that pre-estimated damages shall be subject to a maximum of 10% of the contract value, such a clause cannot be easily brushed aside by the arbitrators unless the “force majeure" clause, i.e., Clause 48 could be invoked to avoid levy of damages. Under the 'force majeure" clause, the term 'force majeure" was defined to include events like wars, revolutions, fires, floods, etc., and none of these events was indisputably taken place to attract this clause. There is also a rider in sub-clause (3) of Clause 48 that if a force majeure situation arises, the contractor shall promptly notify the petitioner board in writing of such condition and the cause thereof. 29. Similarly, Clause 51 of the GCC clearly stipulates that time shall be considered as the essence of the contract. But this clause contemplates granting of extension of time in certain cases. Just because extension of time can be granted under Clause 51, it cannot be said that Clause 47, i.e., pre-estimated damages clause would not apply if time is granted. 30. Admittedly, time was granted unconditionally when it was asked for the first time. Thereafter, subsequent extensions were granted only after reserving the right of the board to levy pre-estimated damages as per the terms of the contract. In such circumstances, the judgment of the Hon'ble Supreme Court in ONGC Ltd v. Saw Pipes Ltd, 2003 (2) CTC 282: 2003 (5) SCC 705 cited supra would apply and the award to that effect is to be set aside. 31. The arbitrators while giving their finding to the issue whether the imposition of the pre-estimated damages is valid, held that 1st respondent deserves sympathetic treatment in respect of this claim as they were faced with myriad problems like intervention of larger number of monsoons, unforeseen subterranean impediments, additional work at the fag end the problems in the land chosen by the 1st respondent, reclamation problem, telephone lines problem, etc. which are in my view are not germane to the issue. So far as these difficulties would not come under 'force majeure" clause, then Clause 47 could not be ignored. which are in my view are not germane to the issue. So far as these difficulties would not come under 'force majeure" clause, then Clause 47 could not be ignored. Consequently the award passed disregarding Clauses 47 and 48, is definitely vitiated as the same is in violation of Section 28(3) of the Act, 1996. The arbitrators have also observed that there is absolutely no proof of any loss suffered by the board without considering Sections 73 and 74 of the Contract Act, 1872. As held by the Hon'ble Supreme Court in ONGC cage cited supra, in certain types of contract it is not possible to prove actual loss or damage and in such a situation if the parties have pre-estimated such loss after clear understanding, it would be totally unjustified to arrive at the conclusion that the party who committed breach of the contract is not liable to pay compensation. Applying the principle in the above judgment to the facts of the present case, I am of the considered view that the petitioner-Board is entitled to levy pre­-estimated damages as per Clause 47 and it need not prove the actual loss to get compensation. Hence, I hold that the award dated 22.2.2001 insofar as granting pre-estimated damages in contract No. I to the tune of Rs.92,26,208 and pre-estimated damages in contract No. II to the tune of Rs.28,65,310 is concerned, is want of jurisdiction and bad in law and the same is to be set aside. 32. Insofar as the submission of the learned Senior Counsel appearing for the petitioner-Board with regard to the limitation aspect is concerned, the Arbitral Tribunal erred in law in not deciding the issue even though there was a specific pleading in the counter statement filed by the petitioner-Board before the arbitrators and even after a specific issue, namely, issue No.11 was framed by the Arbitral Tribunal. 33. It is trite law that Limitation Act would apply to the Arbitration Act, 1996 as per Section 43 and even if the parties did not raise the plea of limitation, it is the duty of the arbitrators to go into this question as the tribunal is not expected to adjudicate the stale claim. 34. 33. It is trite law that Limitation Act would apply to the Arbitration Act, 1996 as per Section 43 and even if the parties did not raise the plea of limitation, it is the duty of the arbitrators to go into this question as the tribunal is not expected to adjudicate the stale claim. 34. In the present case, the learned Senior Counsel appearing for the petitioner submitted that the liquidated damages were recovered from the 1st respondent as early as 12.8.1996, but the 1st respondent instituted the proceedings by filing O.P. No. 383/2000 on 19.6.2000 only and hence the claim is barred by limitation. 35. I am unable to accept this argument of the learned Senior Counsel. Only on 19.10.1997 the 1st respondent was informed by the petitioner that they have recovered liquidated damages in both contracts. On 7.11.1997 itself, the 1st respondent initiated arbitration proceedings by nominating their arbitrator. In such circumstances, I am of the view that the claim is well within the time and the same is not hit by law of limitation. 36. Insofar as the claim awarded under the heading "interest for belated payment" is concerned, I do not find any clause in the agreement prohibiting the arbitrators from awarding the interest. In such circumstances, the award of interest for the belated period on the basis of evidence cannot be interfered with by this Court. Similarly, in respect of the award for the claim made under the heading surplus pipes for a sum of Rs.8,77,500 in contract No. I is concerned, this is also a finding given by the Arbitral Tribunal on the basis of evidence. Therefore, it is not possible for this Court to interfere with that finding under Section 34 of the Act, 1996. 37. In the result, the award dated 22.12.2001 is set aside insofar as the award of claim in Sl. No. I under the heading pre-estimated damages in contract No. I for a sum of Rs.92,26,208 and the award of claim under Sl.No.I under the heading pre-estimated damages under contract No.II for a sum of Rs.28,65,310 are concerned and the award is upheld with regard to other claims awarded by the Arbitral Tribunal. 38. Accordingly, the above O.P. is disposed of on the above terms. No costs.