Judgment : (Dr. D.Y. Chandrachud, J.) The challenge in the Appeal is to the judgment of a Learned Single Judge dated 11 November 2011 on a petition filed under Section 34 of the Arbitration and Conciliation Act 1996. Insofar as this Appeal is concerned, the Learned Single Judge affirmed the arbitral award of a sole Arbitrator insofar as the claim for refund of retention money in the amount of Rs.1,43,028/-was allowed together with interest. 2. The Appellant before the Court was the original petitioner in the Arbitration Petition and is aggrieved by the judgment of the Learned Single Judge to the extent to which the challenge to the arbitral award on the issue of the refund of the retention money has not been accepted by the Learned Single Judge. 3. The following submissions have been urged in support of the Appeal: (i) In the invocation of arbitration, no claim was raised by the Respondent for refund of retention money; (ii) No claim was raised even during the course of the arbitration proceedings for the refund of retention money; and (iii) After the proceedings before the Arbitrator were closed for an award, a statement was tendered by the Respondent in which there was a claim for refund of retention monies. The Appellant undoubtedly did submit its response to the statement. But the fact which remains, according to the Appellant is that no such claim was advanced when arbitration was invoked. Hence, it has been urged that the Arbitral Tribunal lack jurisdiction to entertain the claim for refund of retention monies. 4. On behalf of the Respondent it has been urged that: (i) The entire submission proceeds on an erroneous foundation since even prior to the invocation of the arbitration on 22 May 2002 the Respondent had claimed a refund of the retention monies on 30 October 2000; (ii) In the statement of claim that was filed before the Arbitrator, there was an express reference to the amounts which were retained towards retention monies by the Appellant. The bills which had been raised by the Respondent had been paid and the amount which remained was the retention money which had not been refunded to the Respondent; (iii) In the written statement and counter claim that was filed by the Appellant, the claim for refund of retention monies was traversed and as a matter of fact, the Appellant in its counter claim sought a set off in respect of the retention monies; (iv) In the written statement that was filed before the Arbitral Tribunal, no objection in regard to the jurisdiction of the Arbitrator to entertain a claim for refund of retention monies was taken. Consequently, the Learned Single Judge was justified, having regard to the provisions of Section 16(2) of the Arbitration and Conciliation Act 1996 in coming to the conclusion that since an objection as to jurisdiction was not raised before the Arbitrator in the statement of defence, the Appellant was precluded from doing so in the Arbitration Petition challenging the arbitral award. The rival submissions now fall for consideration. 5. The claim in regard to the refund of retention monies together with interest has been dealt with by the Arbitral Tribunal in paragraph 32 of the award. Before the Arbitrator the contention of the Appellant was that under the general conditions of contract retention monies would become payable only after the end of a defect liability period of 365 days from the completion of work and that the retention amount had not become payable by the Appellant in consequence. Moreover, it was urged that the retention amount due to the Respondent was calculated after giving credit for the compensation payable to the Appellant for which a counter claim had been made. The Arbitrator rejected this defence raised by the Appellant on the ground that the Appellant had unfairly foreclosed and/or aborted the contract as a result of which the question of the Respondent completing the contract did not arise as it was prevented from completing the work by the conduct and action of the Appellant. The retention money was deducted in the running account bills bearing Nos. 1 to 6, the last of them being submitted on 31 May 1999. The retention money was deducted in the running account bills bearing Nos. 1 to 6, the last of them being submitted on 31 May 1999. The Arbitrator noted that though the Appellant had been assuring that the work would be restarted, the Appellant did not do so in view of its financial difficulties until work under the contract was foreclosed / aborted. The Arbitrator also noted that during the period of 365 days from 31 May 1999, no defects were either pointed out by the Appellant for being rectified or remained to be rectified. Since the completion of the work was prevented by the action of the Appellant in foreclosing or aborting the contract, the Arbitrator came to the conclusion that the Respondent was not required to wait for a period of 365 days. Finally, the Arbitrator held that the claim for refund of retention monies arose under the contract and fell within the purview of the arbitration agreement, clause 30 of the arbitration agreement being of the widest amplitude. 6. The Learned Single Judge has while rejecting the challenge to the arbitral award by the Appellant on the issue of retention monies held that the admitted position is that the claim was raised by the Respondent in the statement of claim. In the reply filed by the Appellant no objection to the jurisdiction of the Arbitrator was raised on the basis that the claim had not been addressed in the letter of invocation dated 22 May 2002. In view of the provisions of sub-sections (2) and (3) of Section 16, the Learned Single Judge held that such an objection to jurisdiction not having been raised in the statement of defence and the Appellant having established no sufficient cause for not raising it earlier, such a submission could not be raised in the proceedings under Section 34. Finally, the Learned Single Judge held that the view which was taken by the Arbitrator to the effect that the claim raised a dispute arising out of the contract and that the arbitration clause was widely worded was a possible view. Hence, the arbitral award has not been interfered with on the issue pertaining to the refund of retention amounts. 7. With the assistance of the learned counsel we have perused the relevant record during the course of the hearing of these Appeals. Hence, the arbitral award has not been interfered with on the issue pertaining to the refund of retention amounts. 7. With the assistance of the learned counsel we have perused the relevant record during the course of the hearing of these Appeals. There was evidently a dispute between the parties in regard to the retention monies as is evidenced from a letter addressed by the Respondent to the claimants as far back as on 30 October 2000 even prior to the invocation of arbitration. Arbitration was invoked on 22 May 2002 and the statement of claim before the Arbitrator was filed on 16 April 2003. The contention of the Appellant that no claim was made before the Arbitrator in the statement of claim for the refund of retention monies is factually incorrect. The statement of claim contains two statements, Statement I being the bill for work done and Statement II, the demand for compensation. One of the statements annexed to the statement of claim is the status of billing and amounts payable in which there is a clear reference to the retention monies in the amount of Rs.1,43,028/-. The statement would clearly show that while the other amounts due and payable under the bills had been paid (as a result of which there was nil amount outstanding) the retention monies had not been paid. As a matter of fact, the Appellant also understood the statement of claim in the same sense. In the written statement and counter claim the Appellant justified the deduction of the retention money on the ground that it was entitled to hold it until the satisfactory completion of work was carried out in accordance with the contract. The Appellant sought to set off the retention money on the ground of nonperformance and poor quality of workmanship. It is thus evident that the Appellant joined issue with the Respondent on the merits of the claim for refund of retention amount. This was clearly an issue before the Arbitrator and fell within the purview of the arbitration agreement. Sub-section (2) of Section 16 requires that a plea that the Arbitral Tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. However, a party is not to be precluded from raising a plea merely because he has appointed or participated in the appointment of an Arbitrator. Sub-section (2) of Section 16 requires that a plea that the Arbitral Tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. However, a party is not to be precluded from raising a plea merely because he has appointed or participated in the appointment of an Arbitrator. Under sub-section (3) a plea that the arbitral tribunal is exceeding the scope of its authority has to be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. Sub-section (4) of Section 16 allows the Arbitral Tribunal in either of the cases referred to in subsections (2) or (3) to admit a later plea if it considers a delay as justified. An objection as to jurisdiction ought to have been raised before the Arbitral Tribunal, but was not raised by the Appellant. On the contrary, the Appellant joined issue on the merits of the claim. The Arbitrator adjudicated upon the merits. In these circumstances, the Learned Single Judge was justified in declining to entertain the plea of jurisdiction. There is no merit in the submission that the claim was not raised before the Arbitral Tribunal in the statement of claim or that it was raised for the first time after arguments were concluded. As a matter of fact, the submission which is urged on behalf of the Appellant is factually belied by the record of the arbitral proceedings. 8. In Appeal 92 of 2012, in addition to the submissions which have already been urged in the companion Appeal, learned counsel has submitted that under the conditions of contract governing this appeal, a claim for interest on retention monies was specifically prohibited. Hence, it was urged that the Arbitral tribunal, in awarding interest has acted contrary to the terms of the contract. 9. Clause 47 of the general conditions of contract provides that 10% of the value of the work done is to be deducted by the employer from each payment to be made to the contractor towards retention money until the retention money amounts to 5% of the contract value. The retention money is to be released by the employer after rectification of defects pointed out during the defects liability period or at the end of the defects liability period whichever is later. The retention money is to be released by the employer after rectification of defects pointed out during the defects liability period or at the end of the defects liability period whichever is later. Clause 47 then contains the following stipulation: “The amounts retained by the employer shall not bear any interest.” 10. What clause 47 stipulates and means, is that during the term of the work, and until the defects liability period is over, the employer is entitled to retain the retention monies and that no interest would be liable to be paid until the monies become due and payable. The Arbitrator has held that the prohibition contained in clause 47 would have no application in a situation such as the present. The work under the contract could not be completed in view of the improper foreclosure of the contract by the Appellant. The Arbitrator has awarded interest at the rate of 15% per annum on the retention monies from 1 August 2002. There is no merit in the challenge to the arbitral award for the simple reason that the prohibition on the retention monies bearing interest would continue to govern so long as the employer is justifiably entitled to retain the retention monies. Once the retention monies become refundable and the employer thereafter unlawfully withholds the refund of the retention monies, there is no prohibition in clause 47 and the contractor would be justifiably entitled to refund of retention moneys with interest, having been improperly deprived of the use of the monies due to the conduct of the employer. It is evident from the award that interest has not been awarded for the period during which the retention monies were justifiably retained, but only for the period thereafter. 11. For these reasons, we do not find any merit in both the Appeals. The Appeals are accordingly dismissed. There shall be no order as to costs.