Judgment :- I.P. Mukerji, J. This is an application under section 30 and 33 of the Arbitration Act, 1940 to set aside an award made and published by an Arbitrator appointed under an Order of this Court, and who was an officer of the petitioner, on 1st March 2004. These disputes between the parties have spread over twenty years and this arbitration has engaged the attention of this Court for nearly eighteen years, with little respites in between. Before I proceed further, some facts which are very important have to be noted. The contract was of 1989. In or about May 1992 a special suit under the said Act, being Special Suit no.64 of 1992 was instituted in this court for interim reliefs as well as for appointment of Arbitrator. It was at the instance of the petitioner. On 6th May 1998 the petitioner’s officer was appointed as arbitrator. Such arbitrator was asked to enter upon the reference with a fortnight and to make and publish an award within a period of four months thereafter. This court by its Order dated 9th August 1999 extended the time to make and publish the award by four weeks. The last sitting before the Arbitrator was held on 15th September, 2003. He retired soon thereafter. The award came some six months later. It was published to the parties. The arbitrator did not file it in court at any reasonable point of time thereafter. The Respondent being the beneficiary of the award did not take out any application to compel the arbitrator to file the award. Neither did the petitioner being the debtor under the award take steps to set it aside. I think a setting aside application can be filed whether the award has been filed or not. Instead, it is said that the Respondent took out an incompetent execution application which was dismissed. I believe that under the above law there was no time limit for the Arbitrator to file the award, although there was a time limit for the parties to take out an application to compel the arbitrator to file the award.(article 119 of the Limitation Act,1963)The arbitrator on his own filed the award in court on 30th April 2008.Notice under section 14 (2) was duly issued on 18th June 2008. This application was taken out on or about 3rd September, 2008. This application was taken out on or about 3rd September, 2008. After this application became ready for hearing I condoned the delay on 22nd June 2010. The first point first. It is said for the petitioner that the award was published much beyond the time extended by the court in 1999.After such time the arbitrator had become functus officio. The award was a nullity. The arbitration clause is 18.Under it the time to make the award was six months from entering upon the reference. The first schedule to the said Act provided four months time from the date of entering upon reference to make the award, unless the agreement provided to the contrary. Therefore six months’ stipulation was valid. But according to the petitioner, and I think they are right that in the absence of agreement extending time or the court extending it, the time to make and publish the award had expired, after four weeks from the order dated 9th August 1999. It is submitted before me that I should extend the time under section 28 of the said Act. By far the most authoritative pronouncement on the subject was made, in my opinion, by the Orissa High Court in the case of Narsing Das Hiralal Limited and Another vs. Bisandayal Satyanarain Firm, reported in AIR 1954 Orissa 29, cited on behalf of the respondent. In that decision it was noticed that that section 12 of the Arbitration Act 1899 read with the Schedule II of the Civil Procedure Code permitted the court to enlarge the time to make and publish the award irrespective of the fact whether the time to make and publish the award had expired. That enactment did not on the face of it permit extension of time to make and publish an award, after an award had been made beyond time. In a marvellous discussion the learned Judge said there were two English decisions of the nineteenth century, Lord vs. Lee (1867) 3QB 404(A) Knowles vs. Bolton Corporation (1900)2QB 253(B) which held that time could be extended after making of the award. The learned judge held that to give effect to those decisions the provision regarding extension of time to make and publish the award was rephrased in s.28 as follows: “S.28. The learned judge held that to give effect to those decisions the provision regarding extension of time to make and publish the award was rephrased in s.28 as follows: “S.28. (1) The Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time the time for making the award. (2) Any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award shall be void and of no effect.” The learned judge went on to hold that considering the conduct of the parties the trial judge had rightly exercised his discretion to extend the time to make and publish the award. Such extension had been granted by the trial judge at the judgment upon award stage. A division bench of our court in Nalini Ranjan Guha vs. Union of India, reported in AIR 1958 Cal 624 , also cited on behalf of the respondent approved that principle in paragraph 24. The petitioner however contended that upon expiry of time, the Arbitrator became functus officio. The award published was invalid and a nullity in the eyes of law. Their learned counsel relies upon Hari Shanker Lal vs. Shambhu Nath and others, reported in AIR 1962 SC 78 .There is no doubt that the Supreme Court observed that such an award would be a nullity. But nevertheless they have held that the Court had the power to extend the time even after the award. When such extension is made, there is ex post facto recognition and validity of the award which relates back to the date of its making and publication. I set out paragraph 10and 11 of that judgment: “…………….. (10) The third alternative in R.3 shows that an award can be made within the extended time allowed by the Court. Section 28 of the Act enables the court to extend the time for the making of the award; extension of time may be given even after the award has been factually made. So till the time is extended an award cannot be made, though, when extended, the award factually made may be treated as an award made within the time so extended. So till the time is extended an award cannot be made, though, when extended, the award factually made may be treated as an award made within the time so extended. To put it differently, if time was not extended by court, the document described as an award would be treated as non est. In this view, the second alternative in R.3 can be invoked only in a case where a notice to act has been given to the arbitrators either before the arbitrators entered on the reference or after they have entered on the reference but before the period of four months from that date has run out. (11) It is said that this construction also may start off a chain of notices which may lead to the same result sought to be avoided by it. The argument is that if one of the parties gives a notice to act, it gives the arbitrators 4 months from that date to act and if before the expiry of the 4 months from that date of notice another notice is given, they will get another lease of life and so on indefinitely. Though there is some plausibility in the criticism, it is answered by our confining the right to give notice by a party to the period of four months from the date the arbitrators entered upon the reference. Nor the apprehension that a party may go on giving number of notices to act within the said 4 months from the date of the arbitrators entering upon the reference, each notice giving a fresh period of 4 months, has any basis. A notice to act can only be given when an arbitrator is not acting i.e., he has refused or neglected to discharge his duty. Therefore, every notice cannot give a fresh period unless in fact the arbitrators refused or neglected to act before such notice is given. The legal position may be formulated thus: (a) A notice to act may be given before or after the arbitrators entered upon the reference. (b) If notice to act is given before they entered upon the reference, the four months would be computed from the date they entered upon the reference. (c) If a party gives notice to act within 4 months after the arbitrators entered upon the reference, the arbitrators can make an award within 4 months from the date of such notice. (b) If notice to act is given before they entered upon the reference, the four months would be computed from the date they entered upon the reference. (c) If a party gives notice to act within 4 months after the arbitrators entered upon the reference, the arbitrators can make an award within 4 months from the date of such notice. And (d) in that event, after the expiry of the said 4 months the arbitrators become functus officio, unless the period is extended by court under S. 28 of the Act; such period may also be extended by the court, though the award has been factually made.” In Arbn Hindusthan Steel vs. Appejay Pr. Ltd. reported in AIR 1967 Cal 291 cited on behalf of the petitioner the court said that the authority of an arbitrator, who had become functus officio by virtue of expiry of time to make and publish the award, could not be revoked. That principle is quite logical but I do not know how that ratio fits into the facts of the case, where the question is with regard to an award made after expiry of time and whether the court should make such extension while scrutinizing challenge to it. I will only say that Sowaran Singh vs. Municipal Committee, Pathankot and another reported in AIR 1963 Punjab 427 cited on behalf of the petitioner is an unfortunate single judge bench decision. It is more unfortunate because it seems proper arguments were not made by the holder of the award to support the case that the court should extend the time to make and publish the award. Although cited by the petitioner, its observations relating to issues in this case can only be treated as per incuriam. In fact in State of Punjab vs. Hardyal, reported in AIR 1985 SC 920 cited on behalf of the petitioner, the Supreme Court in circumstances quite identical to this case where the arbitrator proceeded with the reference without any valid extension of time, appreciated how the arbitrator became functus officio but nevertheless extended the time to make and publish the award. Only because the arbitrator made an application to file the award did the question of limitation arise in another decision cited on behalf of the petitioner Patel Motibhai Naranbhai and another vs. Dinubhai Motibhai Patel and others, reported in AIR 1996 SC 997 . Only because the arbitrator made an application to file the award did the question of limitation arise in another decision cited on behalf of the petitioner Patel Motibhai Naranbhai and another vs. Dinubhai Motibhai Patel and others, reported in AIR 1996 SC 997 . As I have said earlier that there is no limitation for filing of an award by the arbitrator. The limitation Act applies to suits, applications and appeal. Limitation would only apply if the arbitrator made an application to the court. But the Arbitration Act permits the Arbitrator to simply file the award in court. In so filing there is no limitation. The question of limitation arose in the above Supreme Court case because the arbitrator tried to make an application. Here he has simply filed the award in court, so there is no question of any limitation. Now the question is whether on the basis of the above principles I should exercise my discretion to extend the time to make and publish the award in question. I note that, throughout, the parties had participated in the proceedings before the arbitrator as if it was a valid proceeding. They filed their pleadings, led evidence and made arguments. This went on for years without the petitioner or the Respondent objecting to the jurisdiction of the arbitrator. If after expiry of time, one party appears and the other does not and the award is made, then it would be unjust to extend the time and validate the award because it is an exparte award. But here till the last sitting which was on 15th September, 2003, both the parties had participated. Though acquiescence does not validate an invalid award, yet acquiescence by the parties is a circumstance which the court will take into account while considering extending time to make and publish the award. Here the petitioner having fully participated in the proceedings now turns around and says that the award is invalid and that the court should not extend the time. They go further to submit that there is no case made out for extension of time. Just because the award has gone against them. I do not think these circumstances permit the petitioner to object. Hence the objection is overruled. [see Inder Sain Mittal vs. Housing Board, Haryana and others, reported in AIR 2002 SC 1157 para 12, M/s. Construction India vs. Secretary, Works Department, Govt. Just because the award has gone against them. I do not think these circumstances permit the petitioner to object. Hence the objection is overruled. [see Inder Sain Mittal vs. Housing Board, Haryana and others, reported in AIR 2002 SC 1157 para 12, M/s. Construction India vs. Secretary, Works Department, Govt. of Orissa and other reported in AIR 1998 SC 717 , Prasun Roy vs. The Calcutta Metropolitan Development Authority and another reported in AIR 1988SC 205, Nagar Palika, Mirzapur vs. Mirzapur Elect. Supply Co. Ltd. reported in AIR 1990 SC 2273 .] Therefore the first objection of the petitioner regarding the invalidity of the award is overruled. I extend the time, till making and publishing of the Award, to so do, thereby validating it. Now, let me examine the award and ascertain whether it should be upheld, and if so, to what extent. There is no dispute with reference to the finding of the arbitrator at page 18 of the award that the value of the work including all extra works executed by the respondent was Rs.300.27 lacs. Out of this Rs.260.855 lacs were paid. The learned arbitrator has held that all the balance sum of Rs.39,41,500/- except a sum of Rs.5,25,000/- representing liquidated damages was payable by the petitioner to the respondent. That is, a sum of Rs.34,16,500/-. Now, to examine the validity of this award the contract has to be discussed. The contract is evidenced by several work orders beginning from 7th September 1989. Under it work was to be completed in 28 weeks from the date of the letter of intent (clause 2 of the Special Conditions of Contract). Liquidated damages were payable for prolongation of work beyond the stipulated time @ Rs.3500/-per day subject to a maximum of 5% of the contract value (Clause 3 of the Special Conditions of Contract). There is no dispute whatsoever that the work carried on for 18 months. As I have said earlier, there is no dispute that the respondent not only did the work under the contract but also extra work of the value of Rs.300.27 lacs. After expiry of the original period time was from time to time extended by the petitioner to complete the work. Now, the question is how is such extension to be construed? Did the petitioner by making such extension waive its right to claim liquidated damages? After expiry of the original period time was from time to time extended by the petitioner to complete the work. Now, the question is how is such extension to be construed? Did the petitioner by making such extension waive its right to claim liquidated damages? Any party to a contract may agree to a measure of damages to be paid by a defaulting party in case of breach of contract by it. This is known as the concept of liquidated damages, as recognised in section 74 of the Indian Contract Act. The stipulation as to time is a term of the contract. According to the intention of the parties, such stipulation of time may be fundamental to the contract or it may not be so. When the stipulated time expired in this case, the petitioner had the option under the above clause to accept delayed performance by the respondent on payment of liquidated damages. Such performance was accepted, as it appears from the record by the petitioner by extending the time. I find nothing from the records to show that the right to recover liquidated damages was waived by the petitioner. It is true that the respondent also had a right to claim damages for any breach on the part of the petitioner as a result of which it could not complete the work within time. From the finding in issue No. 1 by the arbitrator, there is nothing to suggest that the petitioner was in such breach or that any damage was caused to the respondent. The finding made is as follows: “The claimant have contested the allegations of the Respondent and have stated that there was no delay in issuing drawings nor any obstruction from the side of the claimant. The respondent was allowed time beyond the original completion period. The claimant denied that the extension of time upto 9.2.91 granted was unconditional as alleged by the respondent. However, I do not find sufficient documents to prove that the respondent was provided the drawing in time and no hindrence/obstruction was faced by the respondent. As a result the respondent had not become liable to pay the liquidated damages in terms of the contract.” “…………..However it is, infact, admitted that to complete the work the respondent took about 18 months. As a result the respondent had not become liable to pay the liquidated damages in terms of the contract.” “…………..However it is, infact, admitted that to complete the work the respondent took about 18 months. Hence I hold that the respondent is liable to pay compensation to some extent and that is for a period of 150 days and make an award of Rs.525000/-against the claim of Rs.14.952 lacs.” Liquidated damages had to be awarded in full on the above facts when there was admitted delay in performance of the work beyond 28 weeks till the work was completed in 1½ years. Such period entitled the respondent to full liquidated damages. Of course, the respondent could have been entitled to counter damages if it proved breach by the petitioner like not supplying the drawings or creating hindrances. The burden of proof was on the respondent. It appears the arbitrator had no evidence, to award damages to the respondent, so as to reduce the agreed liquidated damages to Rs.5,25,000/-. In my opinion, the above error can be called a perverse finding on liquidated damages based on no evidence. In such a situation the court has the power to interfere while examining an award. As some reasons have been given which are plausible for rejecting the petitioner’s claim for damages for allegedly getting the work done by another contractor and for allegedly defective work done by the respondents, I am not interfering with those portions of the award. Those portions of the award are supported by the reason given that no evidence was adduced by the petitioner to prove those claims. Nothing has been shown by the petitioner to suggest that in spite of compelling evidence the arbitrator has disregarded the same and come to a such finding so as to make the award perverse. Further, non issuance of a completion certificate by the petitioner is no ground to challenge the entitlement of the respondent. If that be true, then in each and every case, a party to a contract would refrain from issuing a completion certificate so as to defeat the claim of the other party. The work, as aforesaid is admitted to the extent of Rs.300.27 lacs. Also admitted is the making of payment of Rs.260.855 lacs. Therefore, there is no question of further probing into how Rs.300.27 lacs became payable. The work, as aforesaid is admitted to the extent of Rs.300.27 lacs. Also admitted is the making of payment of Rs.260.855 lacs. Therefore, there is no question of further probing into how Rs.300.27 lacs became payable. In view of my above findings I hold that the petitioner was entitled to Rs.14.448 lacs on account of liquidated damages. Therefore, such amount is deductible from Rs.39,41,500/-. Therefore, the respondent would be entitled to Rs.39,41,500 – 14,44,800 =24,96,700/-. Now, the question of interest. Under the Arbitration Act 1940 arbitration commenced inter alia on filing of a special suit [See S. 20(2) read with S. 37]. This suit was filed on or about 15th May 1992. Therefore, pendent elite interest is to be reckoned from 15th May 1992. I am of the opinion that both the parties have slept over their rights and have not conducted the arbitration proceeding with diligence. From 1992 to 1998 no steps were taken to get an arbitrator appointed. The arbitrator was appointed by an order of this court on 6th May 1998 and he entered into reference on 20th May 1998. The last sitting of the arbitration was on 15th September 2003. The award was made and published on 1st March 2004. Section 14 (2) notice was issued on 18th June 2008. Granting pendent elite interest is entirely the discretion of the court. When the arbitrator had made and published the award it was upon the award holder to take steps to compel the arbitrator to file the award. They did not. Considering the above conduct of the parties I disallow any pendente lite interest from 15th May 1992 to 20th May 1998 and from 1st March 2004 to 18th June 2008. The respondent will be entitled to interest accordingly, in terms of the Award. Therefore, I modify the award by awarding Rs. 24,96,700/- as principal sum and interest at the same rate and for the same period granted by the arbitrator, except for the period disallowed by me. There is no point in further deferring passing of a decree. Thus, there will be judgment and decree in terms of the modified award. The award debtor is to pay interest @ Rs.8% per annum from the date of the decree till realization. Let certified copy of this judgment and decree be issued expeditiously. There is no point in further deferring passing of a decree. Thus, there will be judgment and decree in terms of the modified award. The award debtor is to pay interest @ Rs.8% per annum from the date of the decree till realization. Let certified copy of this judgment and decree be issued expeditiously. Urgent certified photocopy of this judgment and order, if applied for, to be provided upon complying with all formalities.