( 1 ) NBCC has filed objections to the award dated 7. 7. 2004 published by Shri V. R. Vaish, sole arbitrator appointed by the Chairman-cum-Managing director, NBCC to decide the disputes between NBCC and the respondent. ( 2 ) RESPONDENT (here-in-after referred to as the contractor) is engaged in the business of construction and operates under the name and style m/s Bhatia Builders. ( 3 ) NBCC awarded various works to the contractor relating to construction of a school building at Jaffarpur Kalan. On 16. 9. 1994 work relating to construction of a dormitory, kitchen and dining hall was awarded. On 9. 3. 1995 work pertaining to water supply and sanitary work was awarded. On 23. 12. 1996, work pertaining to affixing MS angle, affixing kota stone was awarded. On 29. 4. 1998 and 30. 4. 1998, work relating to affixing flush doors and grit finish in various walls was awarded. ( 4 ) IN between, certain minor works pertaining to affixing shelves in staff quarters, earth work and re-enforcement etc. were awarded. All works related to the same site. ( 5 ) THERE were disputes and differences between the parties. NBCC alleged non-fulfillment of obligations under the contract and accordingly encashed two performance guarantees. It also had claims on account of balance work got done from third parties at a higher rate. ( 6 ) NBCC levied liquidated damages in the sum of Rs. 2,43,120/- and sought to recover the same from the running bills. Agreement between the parties contained an arbitration clause. Disputes were referred to the arbitrator. ( 7 ) THE contractor raised a claim in the sum of Rs. 11,68,411/ -. The claim aforesaid included amount recovered under the bank guarantees. He also claimed interest. ( 8 ) NBCC had a claim in the sum of Rs. 2. 6 lacs on account of deputing an engineer at site for 26 months. Counter claim for the liquidated damages in the sum of Rs. 2. 69 lacs was also laid. The third claim was on account of defective works. 5% of the value of the contract was claimed under this head. Rs. 5. 39 lacs were claimed towards loss of reputation and business. Analysing the claim of the contractor, learned arbitrator awarded Rs. 5,42,067/- on account of money admitted to be payable by NBCC in its letter dated 8. 8. 2001. 5% of the value of the contract was claimed under this head. Rs. 5. 39 lacs were claimed towards loss of reputation and business. Analysing the claim of the contractor, learned arbitrator awarded Rs. 5,42,067/- on account of money admitted to be payable by NBCC in its letter dated 8. 8. 2001. Encashment of bank guarantee in the sum of Rs. 1. 5 lacs was upheld as the learned arbitrator held that the bank guarantee was rightly invoked but, invocation of bank guarantee in the sum of Rs. 70,000/- was held to be bad in law inasmuch as the guarantee was a performance guarantee for the kitchen and dining hall work which works were held duly executed. Claims of NBCC were rejected. Ms. Poonam, learned counsel for the petitioner, urging the objection raised a preliminary point being that the arbitration clause, being clause No. 25 of the General Conditions of Contract stipulated that if within 90 days of the receipt of intimation from NBCC that final bill was ready contractor did not dispute the finalisation of the bill, claim would be deemed to be waived and absolutely barred. Counsel relied upon decision reported as d. D. A. Vs. Jagan Nath Ashok Kumar, GM Northern Railway Vs. Sarvesh Chopra 2002 (1) ALR 506, Arvind Construction Co. Vs. Executive Engineer 1997 (2) ALR 45 and Kamaluddin Ansar Vs. U. O. I. to urge that levy of liquidated damages being an excepted matter could not be referred to arbitration. ( 9 ) LEARNED counsel urged that vide letter dated 8. 8. 2001, NBCC finalised the final bill and intimated the contractor that he was entitled to the sum of Rs. 5,42,007/-, minus liquidated damages levied in sum of rs. 2,43,120/ -. ( 10 ) I have perused the statement of claims of the contractor and counter statement filed by NBCC before the arbitrator. No objection pertaining to limitation was raised before the learned arbitrator. Indeed, Ms. Poonam, learned counsel for the petitioner could not show from the pleadings of NBCC before the arbitrator that such a plea was ever raised. It is trite that a party may waive the defence of limitation. That apart, documents on record show that NBCC entertained letters by the contractor questioning the final bill as finalized. Parties attempted to reason it out with each other. When reasoning failed, contractor invoked the arbitration clause and an arbitrator was appointed. It is trite that a party may waive the defence of limitation. That apart, documents on record show that NBCC entertained letters by the contractor questioning the final bill as finalized. Parties attempted to reason it out with each other. When reasoning failed, contractor invoked the arbitration clause and an arbitrator was appointed. Had NBCC told the contractor that having finalised the final bill, chapter was closed, I could have appreciated the stand of NBCC. The first objection raised to the award is accordingly rejected. ( 11 ) IN respect of contractor's claims, learned arbitrator has awarded the sum certified as payable by NBCC as per its letter dated 8. 8. 2001. This is the same letter which has been heavily relied upon by counsel for NBCC to urge the first objection. The letter reads as under :- ( 12 ) LEARNED counsel for the petitioner stated that the letter acknowledged payment of Rs. 5,42,007/- but immediately informed that this was subject to deduction of liquidated damages levied by the department. ( 13 ) LEARNED arbitrator has, in my opinion, rightly opined that in the teeth of it's letter dated 8. 8. 2001, NBCC cannot deny payment of rs. 5,42,007/- to the contractor. I, therefore, find no error committed by the learned arbitrator. ( 14 ) ON the question of adjustment, needless to state, the same was a distinct counter claim laid by NBCC and, therefore, learned arbitrator considered the same while dealing with NBCC's counter claim. Of course, if counter claim succeeded, necessary adjustments would have followed. I would deal with claim No. 2 of NBCC which related to the liquidated damages a little later, but at the moment it would be sufficient to note that the contractor's claim has been adjudicated on the admission of NBCC. Laying a challenge to the claim awarded in the sum of rs. 70,000/-, being performance guarantee in the sum of Rs. 70,000/- encashed by nbcc, learned counsel urged that since work was completed belatedly, NBCC was justified in encashing the guarantee. Counsel urged that performance guarantee related to construction of kitchen and dining hall. Work was awarded on 6. 10. 1994. It had to be completed in six months. It was completed on 31. 3. 1999. 70,000/- encashed by nbcc, learned counsel urged that since work was completed belatedly, NBCC was justified in encashing the guarantee. Counsel urged that performance guarantee related to construction of kitchen and dining hall. Work was awarded on 6. 10. 1994. It had to be completed in six months. It was completed on 31. 3. 1999. ( 15 ) HAVING perused the award, I note that the guarantee in question was to secure the construction of kitchen and dining hall as per specifications. Learned arbitrator noted that before certifying the final bill for payment, the engineer concerned had made a noting in the measurement book vide entry No. 9249 to the effect: "certified that the work has been carried out as per CPWD's specifications and nothing is due against this work. " noting that during defective liability period, defects notified vide letter dated 7. 9. 1999 were rectified on 27. 9. 1999, learned arbitrator has opined that there was no justification for invoking the bank guarantee. Good reasons flow from the award to sustain the finding. Guarantee was to secure the due construction of the building as per specifications. Having found as a matter of fact that the building was constructed as per specifications and defects notified were removed, learned arbitrator rightly held that the guarantee could not have been encashed. Delayed construction attracted liquidated damages and had nothing to do with the performance guarantee. Claim No. 1 of NBCC has been rejected holding that if NBCC deputed an engineer at site, it did so of its own wish. Indeed, NBCC had to supervise the construction to ensure that the contractor was carrying out the works as per specification norms. Every owner of a work would do so. ( 16 ) LEARNED counsel for NBCC could not show any document that a particular engineer was stationed at site everyday by NBCC to supervise the construction. I see no unreasonableness or illegality in the award pertaining to claim No. 1 of NBCC. Claim No. 2 was laid by NBCC on account of liquidated damages. NBCC justified levy of liquidated damages on account of delay in construction. ( 17 ) LEARNED arbitrator has held that clause empowering the NBCC to levy liquidated damages required issuance of a show cause notice before passing an order. Claim No. 2 was laid by NBCC on account of liquidated damages. NBCC justified levy of liquidated damages on account of delay in construction. ( 17 ) LEARNED arbitrator has held that clause empowering the NBCC to levy liquidated damages required issuance of a show cause notice before passing an order. Learned arbitrator has noted that inspite of being asked during hearing no letter or order imposing liquidated damages was produced. Thus, levy of liquidated damages has been negated. Arbitration clause starts with a non-obstantive supervision that arbitrability of disputes is subject to 'except where where contract provides decision by a named authority' and such decision being final. NBCC ought not to have referred said claim for adjudication because it was an excepted matter inasmuch as levy of liquidated damages cannot form subject matter of reference to an arbitrator. Following the law laid down in the report published as 1999 (1)ALR 88 DDA Vs. U. Kashyap, I hold that the award pertaining to claim No. 2 of nbcc is void. ( 18 ) HOWEVER, that would not mean that NBCC is entitled to suo-moto recover the said amount. NBCC would be entitled to recover the same by due process of law. If such an action is initiated by NBCC, all defences would be available to the contractor. Contractor could then show that no order levying liquidated damages was actually passed or that procedure to be followed before the liquidated damages were levied was not followed. Rejecting claim No. 3 of NBCC, learned arbitrator has held that no material has been shown by NBCC nor any evidence led to justify the said claim. The claim could succeed only if NBCC established defective work. Finding of the learned arbitrator is a consequence of his holding that no evidence has been shown to him to sustain the claim. Learned counsel for NBCC could not show any document to me where from it could be gathered that the contractor executed defective works which had to be rectified by NBCC and for which money was spent. I fail to understand the logic of claim No. 4. The building was to be constructed for NBCC. What loss of reputation or business was being talked about by NBCC before the arbitrator is not understandable. I fail to understand the logic of claim No. 4. The building was to be constructed for NBCC. What loss of reputation or business was being talked about by NBCC before the arbitrator is not understandable. It was not the case pleaded by NBCC that it was acting on behalf of a third party and because of delay in completion of the works, a word spread in the market that nbcc should not be engaged as executing agency. ( 19 ) IN any case, learned arbitrator has held that no evidence to prove loss of reputation, much less its quantification or loss of business has been established. Lastly an objection was raised to grant of interest by the learned arbitrator. Objection was predicated on clause 29-A of the general conditions of contract between the parties which stipulates that if any sum payable to the contractor under the contract is withheld or retained by way of lien by the engineer in charge, no interest shall be payable on said sum. ( 20 ) THE objection has to be rejected principally on the ground that before the arbitrator, in its pleadings, NBCC never relied upon clause 29. Stand taken was that since no amount is payable, question of any interest to be paid does not arise. Having not raised a plea before the arbitrator, I do not permit NBCC to urge the said plea for the first time by way of objections to the award. The second reason why the objection has to be rejected is that clause 29 which was relied upon before me to sustain the objection requires notice to be served upon the contractor by the engineer in charge notifying that the amount is being retained as a lien. No such notice has been pointed out. Looking at from any angle, save and except award relating to claim no. 3 of NBCC, the award is legal and valid. ( 21 ) I accordingly dispose of OMP declaring that the award pertaining to claim No. 3 of NBCC is without jurisdiction and is accordingly set aside. However, I hasten to add that NBCC cannot recover the said amount by adjusting the amount of claim No. 3 from the amounts payable to the contractor. NBCC would have to initiate action as per law to recover the said amount and in said proceedings all defences would be available to the contractor. However, I hasten to add that NBCC cannot recover the said amount by adjusting the amount of claim No. 3 from the amounts payable to the contractor. NBCC would have to initiate action as per law to recover the said amount and in said proceedings all defences would be available to the contractor. I award costs in favour of the respondent and against the petitioner in the sum of Rs. 5,000/ -.