JUDGMENT : Rajiv Sharma, J. This Civil Revision is directed against the order dated 04.11.2003, passed by the learned Civil Judge (Junior Division), Shimla in Case No. 14/1 of 2000. 2. Material facts necessary for adjudication of this petition are that the petitioner-plaintiff (hereinafter referred to as "the plaintiff" for the sake of convenience) has instituted a suit in the Court of learned Senior Sub Judge at Shimla for declaration. According to the averments contained in the plaint, the plaintiff is a partnership firm, duly registered under the provisions of Indian Partnership Act, 1932 and Shri Gurcharan Singh is one of the partners thereof and is entitled to file and maintain the present suit. The plaintiff firm carries on the business of Government Contractors and during the course of such business, it has entered into a contract with the Union of India, respondent defendant No. 1 (hereinafter referred to as "the defendant No. 1" for the sake of brevity) through respondent-defendant No. 2 (hereinafter referred to as "the defendant No. 2" for the sake of convenience) for the execution of providing and fixing security fencing around ITBP Campus at Sarahan, including construction of R.P. and G.D. room etc. SH around part A and B. The agreement was entered into between the parties on 15.05.1996. The date of commencement of the work was 25th May, 1996, which was to be completed by 24th May, 1997. However, the work could not be completed by the plaintiff by 24th May, 1997 and the reasons were assigned by the plaintiff to defendant No. 3 vide letter dated 27.10.1998. The defendant No. 3 has imposed compensation amounting Rs. 1575/- for the delay in completion of work on 11.12.1998. Plaintiff has deposited a sum of Rs. 1575/- with the Executive Engineer on 05.03.1999. According to the plaintiff, he is also entitled to be paid the price escalation admissible under Clause 10-CC of the agreement amounting Rs. 1,70,000/-. A legal notice was served upon the defendants on 09.04.1999 to withdraw the order dated 11.12.1998 and refund a sum of Rs. 1575/- paid by the plaintiff to the Executive Engineer on 05.03.1999 and also the amount of escalation amounting to Rs. 1,70,000/- admissible to them in terms of Clause 10-CC. 1,70,000/-. A legal notice was served upon the defendants on 09.04.1999 to withdraw the order dated 11.12.1998 and refund a sum of Rs. 1575/- paid by the plaintiff to the Executive Engineer on 05.03.1999 and also the amount of escalation amounting to Rs. 1,70,000/- admissible to them in terms of Clause 10-CC. It is in these circumstances that the suit has been filed by the plaintiff for declaration to the effect that the order dated 11.12.1998 passed by defendant No. 3 be declared as illegal, void and in-operative and as a consequential relief, a decree be passed against the defendant for a sum of Rs. 1,99,795/- being the amount deducted from the plaintiff on account of compensation and payment of all escalations admissible to the plaintiff till the completion of work together with interest thereon up to the date of the suit. The pendent elite and future interest on the amounts admissible at the commercial rate was also claimed. 3. The defendants filed an application under Section 8 of the Indian Arbitration and Re-conciliation Act, 1996 (hereinafter referred to as "the Act" for brevity sake) to refer the matter to the Arbitrator as per Clause 25 of the agreement dated 24.05.1997. 4. The plaintiff filed reply to the same. Thereafter, learned Sub Judge, 1st Class, Court No. 1, Shimla, Himachal Pradesh allowed the application on 12.04.2002. Plaintiff preferred a Civil Revision against the order dated 12.04.2002 in this Court bearing Civil Revision No. 238 of 2002. The same was decided in favour of the plaintiff on 08.08.2002. Thereafter, the defendants filed a fresh application under Section 8 of the Act on 26.09.2002, to which the reply was filed by the plaintiff. Learned Civil Judge (Junior Division), Shimla, Himachal Pradesh allowed the application on 04.11.2003. It is in these circumstances, the present Civil Revision has been filed against the order dated 04.11.2003. 5. Mr. J.S. Bhogal, learned Senior Advocate for the petitioner has strenuously argued that the second application preferred by the defendants was barred by res judicata. He then contended that as per Clause-2 of the agreement, the dispute is not referable to the Arbitrator. 6. Ms. Anita Dogra, learned Central Government Counsel has supported the order dated 04.11.2003. 7. I have heard the learned counsel for the parties and gone through the records carefully. 8. The agreement was entered into between the parties, as per the pleadings, on 15.05.1996. 6. Ms. Anita Dogra, learned Central Government Counsel has supported the order dated 04.11.2003. 7. I have heard the learned counsel for the parties and gone through the records carefully. 8. The agreement was entered into between the parties, as per the pleadings, on 15.05.1996. The work was to commence on 25.05.1996 and was to be completed by 24.05.1997. The work could not be completed by the due date. The reasons were assigned by the plaintiff to the Superintending Engineer, Shimla Central Circle, C.P.W.D., Shimla, i.e., defendant No. 3 on 27.10.1998. The defendant No. 3 passed an order on 11.12.1998, whereby the plaintiff was directed to pay a compensation of Rs. 1575/-. The amount was deposited with the Executive Engineer on 05.03.1999. The notice was served upon the defendants on 09.04.1999 for withdrawal of order dated 11.12.1998 and to refund the amount of Rs. 1575/- paid by the plaintiff on 05.03.1999 and also for payment of escalation amounting to Rs. 1,70,000/-, admissible in terms of Clause 10-CC. The application was filed by the defendants, to which the reply, as noticed above, was filed by the plaintiff. The order was passed by the learned Sub Judge 1st Class, Court No. 1, Shimla, Himachal Pradesh on 12.04.2002, whereby he has allowed the application. The Civil Revision preferred by the plaintiff was allowed by this Court on 08.08.2002, holding therein that while filing an application under Section 8 (1) of the Arbitration and Conciliation Act, 1996, neither the original arbitration agreement nor a duly certified copy thereof was annexed thereto. According to the learned Single Judge, only an abstract, that too uncertified, of the relevant Clause 25 of the agreement was annexed thereto. Learned Single Judge has held that in the absence of the original arbitration agreement or a duly certified copy thereof, the application made by the defendants under Section 8 (1) of the Act was not maintainable. 9. It is evident from the order dated 08.08.2002 that the Civil Revision has been allowed on technical grounds by holding that neither the original arbitration agreement nor a duly certified copy thereof was annexed. In these circumstances, the defendants were not precluded to file a fresh application under Section 8 of the Act by complying with the requirements of law. The defendants have filed a fresh application under Section 8 of the Act on 26.09.2002 along with the certified copy of the agreement. In these circumstances, the defendants were not precluded to file a fresh application under Section 8 of the Act by complying with the requirements of law. The defendants have filed a fresh application under Section 8 of the Act on 26.09.2002 along with the certified copy of the agreement. Thus, the application was not barred by res judicata. 10. Mr. J.S. Bhogal, learned Senior Counsel for the petitioner has also argued that in view of Clause-2 of the agreement, the dispute with regard to compensation was not referable to the learned Arbitrator. He has relied upon the judgment rendered by their Lordships of the Honble Supreme Court in Vishwanath Sood v. Union of India and another, AIR 1989 Supreme Court 952. Their Lordships have held as under: "4. The position in regard to the counter claim of the respondents which was allowed by the arbitrator and the Division Bench stands on a different footing. The respondents claim before the arbitrator was that they were entitled to receive from the contractor "Rs. 24,000/- on account of payment of 10 per cent compensation on the tendered amount for not executing the work, in accordance with the terms and conditions of the agreement." As against this claim the arbitrator awarded the respondents a sum of Rs. 20,000/-. The learned single Judge took the view that having regard to clause 2 of the contract (pertaining to the claim by the respondent) read with clause 25 it was clear that any compensation under clause 2 could be adjudicated upon only by the Superintending Engineer or the Development Commissioner and that it was not open to the arbitrator to have entered upon a reference in regard to this claim at all. In order to appreciate the finding of the learned Single Judge it will be useful to set out clauses 2 and 25 of the conditions of contract on which his decision was based. "Clause 2. Compensation for delay. The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be the essence of the contract on the part of the contractor and shall be reckoned from the fifteenth day after the date on which the order to commence the work is issued to the contractor. The work shall throughout the stipulated period of the contract be proceeded with all due diligence and the contractor shall pay as compensation an amount equal to one per cent, or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the amount of the estimated cost of the whole work as shown in the tender for every day that the work remains un-commenced, or unfinished, after proper dates. And further, to ensure good progress during the execution of the work, the contractor shall be bound in all cases in which the time allowed for any work exceeds, one month (save for special jobs) to complete one-eighth of the whole of the work before one-fourth of the whole time allowed under the contract has elapsed; three eighth of the work, before one-half of such time has elapsed, and three-fourth of the work, before three-fourth of such time has elapsed. However, for special jobs if a time-schedule has been submitted by the Contractor and the same has been accepted by the Engineer-in-charge, the contractor shall comply with the said time schedule. However, for special jobs if a time-schedule has been submitted by the Contractor and the same has been accepted by the Engineer-in-charge, the contractor shall comply with the said time schedule. In the event of the contractor failing to comply with this condition, he shall be liable to pay as compensation an amount equal to one per cent or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the said estimated cost of the whole work for every day that the due quantity of work remains incomplete, provided always that the entire amount of compensation to be paid under the provisions of this clause shall not exceed ten percent, on the estimated cost of the work as shown in the tender." "Clause 25 :- Settlement of disputes by Arbitration : Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, designs,drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates instruction, order, or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, Himachal Pradesh Public Works Department......." The Division Bench did not agree with the view of the learned Single Judge. It pointed out that, while in the ordinary course, the rate of compensation payable by the contractor is one percent of the amount of the estimated cost of the whole work, under clause 2, the Superintending Engineer is authorised to depart from this figure and determine the compensation at a smaller amount if there are any extenuating circumstances in favour of the contractor. The question however was whether the compensation determined under clause 2 is excluded from the scope of arbitration under clause 25. The Division Bench answered this question in the negative. The question however was whether the compensation determined under clause 2 is excluded from the scope of arbitration under clause 25. The Division Bench answered this question in the negative. It pointed out that the sine qua non of clause 2 was that the contractor should have been guilty of delay in commencing the work or in completing it but the clause did not specify either the authority or the procedure for determining whether the contractor is responsible for the default. Observing that there can be a serious dispute in a particular case as to the person who is responsible for the delay, the Bench took the view that the determination of this dispute cannot be excluded from the scope of clause 25. The Bench observed that in as much as a bona fide dispute can be raised by the contractor in regard to his liability to compensation under clause 2 and no machinery is provided in clause 2 for the resolution of that dispute, there is ample justification for holding that resort can be had to arbitration under clause 25. The statement in clause 2 that the decision of the Superintending Engineer is final, according to the Bench, merely constituted a declaration that no officer in the Department could disturb his quantification. But this finality cannot be construed as extending to exclude the jurisdiction of the arbitrator under clause 25. On this view of the matter, the Division Bench found itself unable to agree with the learned Single Judge that the arbitrator had travelled outside his jurisdiction in awarding a sum of Rs. 20,000/- as compensation to the Government against the contractor for the delay in executing the work. 8. We have gone through the judgment of the Division Bench of the High Court and we have also considered the arguments advanced on both sides. With great respect, we find ourselves unable to agree with the interpretation placed by the Division Bench on the terms of the contract. Clause 2 of the contract makes the time specified for the performance of the contract a matter of essence and emphasises the need on the part of the contractor to scrupulously adhere to the time schedule approved by the Engineer-in-charge. Clause 2 of the contract makes the time specified for the performance of the contract a matter of essence and emphasises the need on the part of the contractor to scrupulously adhere to the time schedule approved by the Engineer-in-charge. With a view to compel the contractor to adhere to this time schedule, this clause provides a kind of penalty in the form of a compensation to the Department for default in adhering to the time schedule. The clause envisages an amount of compensation calculated as a percentage of the estimated cost of the whole work on the basis of the number of days for which the work remains un-commenced or unfinished to the prescribed extent on the relevant dates. We do not agree with the counsel for the respondent that this is in the nature of an automatic levy to be made by the Engineer in-charge based on the number of days of delay and the estimated amount of work. Firstly the reference in the clause to the requirement that the work shall throughout the stipulated period of the contract be proceeded with due diligence and the reference in the latter part of the clause that the compensation has to be paid "in the event of the contractor failing to comply with" the prescribed time schedule make it clear that the levy of compensation is conditioned on some default or negligence on the part of the contractor. Secondly, while the clause fixes the rate of compensation at 1per cent for every day of default it takes care to prescribe the maximum compensation of 10 per cent on this ground and it also provides for a discretion to the Superintending Engineer to reduce the rate of penalty from 1 per cent. Though the clause does not specifically say so, it is clear that any moderation that may be done by the Superintending Engineer would depend upon the circumstances, the nature and period of default and the degree of negligence or default that could be attributed to the contractor. This means that the Superintending Engineer, in determining the rate of compensation chargeable, will have to go into all the aspects and determine whether there is any negligence on the part of the contractor or not. This means that the Superintending Engineer, in determining the rate of compensation chargeable, will have to go into all the aspects and determine whether there is any negligence on the part of the contractor or not. Where there has been no negligence on the part of the contractor or where on account of various extraneous circumstances referred to by the Division Bench such as vis major or default on the part of the Government or some other unexpected circumstance which does not justify penalising the contractor, the Superintending Engineer will be entitled and bound to reduce or even waive the compensation. It is true that the clause does not in terms provide for any notice to the contractor by the Superintending Engineer. But it will be appreciated that in practise the amount of compensation will be initially levied by the Engineer-incharge and the Superintending Engineer comes into the picture only as some sort of revisional or appellate authority to whom the contractor appeals for redress. As we see, it, clause 2 contains a complete machinery for determination of the compensation which can be claimed by the Government on the ground of delay on the part of the contractor in completing the contract as per the time schedule agreed to between the parties. The decision of the Superintending Engineer, it seems to us, is in the nature of a considered decision which he has to arrive at after considering the various mitigating circumstances that may be pleaded by the contractor or his plea that he is not liable to pay compensation at all under this clause. In our opinion the question regarding the amount of compensation leviable under clause, 2 has to be decided only by the Superintending Engineer and no one else. 9. The Division Bench has construed the expression in clause 2 in paranthesis that "the Superintending Engineer's decision shall be final" as referring only to a finality qua the department; in other words, that it only constitutes a declaration that no officer in the department can determine the quantification and that the quantum of compensation levied by the Superintending Engineer shall not be, changed without the approval of the Government. After referring to certain Judicial decisions regarding the meaning of the word "final" in various statutes, the Division Bench concluded that the finality cannot be construed as excluding the jurisdiction of the arbitrator under clause 25. After referring to certain Judicial decisions regarding the meaning of the word "final" in various statutes, the Division Bench concluded that the finality cannot be construed as excluding the jurisdiction of the arbitrator under clause 25. We are unable to accept this view. Clause 25 which is the arbitration clause starts with an opening phrase excluding certain matters and disputes from arbitration and these are matters or disputes in respect of which provision has been made elsewhere or otherwise in the contract. These words in our opinion can have reference only to provisions such as the one in parantheses in clause 2 by which certain types of determinations are left to the administrative authorities concerned. If that be not so, the words "except where otherwise provided in the contract" would become meaningless. We are therefore inclined to hold that the opening part of clause 25 clearly excludes matters like those mentioned in clause 2 in respect of which any dispute is left to be decided by a higher official of the Department. Our conclusion, therefore, is that the question of awarding compensation under clause 2 is outside the purview of the arbitrator and that the compensation, determined under clause 2 either by the Engineer-in-charge or on further reference by the Superintending Engineer will not be capable of being called in question before the arbitrator. 10. We may confess that we had some hesitation in coming to this conclusion. As pointed out by the Division Bench. The question of any negligence or default on the part of the contractor has many facets and to say that such an important aspect of the contract cannot be settled by arbitration but should be left to one of the contracting parties might appear to have far reaching effects. In fact, although the contractor in this case might object to the process of arbitration because it has gone against him, contractors generally might very well prefer to have the question of such compensation decided by the arbitrator rather than by the Superintending Engineer. But we should like to make it clear that our decision regarding non arbitrability is only on the question of any compensation which the Government might claim in terms of clause 2 of the contract. We have already pointed out that this is a penalty clause introduced under the contract to ensure that the time schedule is strictly adhered to. But we should like to make it clear that our decision regarding non arbitrability is only on the question of any compensation which the Government might claim in terms of clause 2 of the contract. We have already pointed out that this is a penalty clause introduced under the contract to ensure that the time schedule is strictly adhered to. It is something which the Engineer-in-charge enforces from time to time when he finds that the contractor is being recalcitrant, in order to ensure speedy and proper observance of the terms of the contract. This is not an undefined power. The amount of compensation is strictly limited to a maximum of 10% and with a wide margin of discretion to the Superintending Engineer, who might not only reduce the percentage but who, we think, can even reduce it to nil, if the circumstances so warrant. It is this power that is kept outside the scope of arbitration. We would like to clarify that this decision of ours will not have any application to the claims, if any, for loss or damage which it may be open to the Government to lay against the contractor, not in terms of clause 2 but under the general law or under the Contract Act. As we have pointed out at the very, outset so far as this case is concerned the claim of the Government has obviously proceeded in terms of clause 2 and that is the way in which both the learned single Judge as well as the Division Bench have also approached the question. Reading clauses 2 and 25 together we think that the conclusion is irresistible that the amount of compensation chargeable under clause 2 is a matter which has to be adjudicated in accordance with that clause and which cannot be referred to arbitration under clause 25. 11. Accordingly, in view of the definitive law laid down by their Lordships of the Honble Supreme Court, the dispute pertaining to payment of compensation could not be referred to the Arbitrator as per Clause-2 of the agreement. The Civil Court had the jurisdiction to go into the entire gamut whether the order dated 11.12.1998 was illegal or not. 12. Now, as far as the question of entitlement of the plaintiff on the basis of Clause-10 CC is concerned, the same is referable to the Arbitrator under Clause 25 of the agreement. The Civil Court had the jurisdiction to go into the entire gamut whether the order dated 11.12.1998 was illegal or not. 12. Now, as far as the question of entitlement of the plaintiff on the basis of Clause-10 CC is concerned, the same is referable to the Arbitrator under Clause 25 of the agreement. However, in the instant case, learned Civil Judge (Junior Division), Shimla, Himachal Pradesh has held that the entire dispute is liable to be referred to the Arbitrator. The Court is of the considered view that as far as the dispute of compensation of penalty is concerned, the same was not referable to the Arbitrator in view of specific Clause-2 of the agreement. However, as far as consequential relief of claiming Rs. 1,70,000/- on the basis of Clause 10 CC is concerned, in view of Clause 25 of the agreement, the same is required to be referred to the Arbitrator. 13. Consequently, in view of the observations and discussions made here in above, the present petition is partly allowed. It is held that the Court below has the jurisdiction to adjudicate upon the validity of order dated 11.12.1998 issued by the Superintending Engineer. But, so far as the claim based on Clause 10 CC is concerned, the same is liable to be referred to the Arbitrator as per Clause 25 of the agreement by the trial Court. The parties are directed to appear before the Civil Judge (Junior Division), Shimla, Himachal Pradesh on 21.05.2012. The order of the learned Civil Judge (Junior Division), Shimla, H.P., dated 04.11.2003 shall stand modified to this extent. The pending application(s), if any, also stands disposed of. No costs.