ORDER : Sanjay Yadav, J. Heard. 2. Contractor has filed this application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator to decide the dispute as to whether he is liable to pay the compensation despite of completing the contracted work within the extended terms. 3. Undisputed facts are that the applicant was awarded work of construction of various types of quarter buildings for Income Tax Department at Rewa under agreement No.48/EE/BCD-11/07-08.Work order was issued on 20.2.2008 and due date of completion was 19.9.2008.The time for completion of work was extended by the Engineer-in-Chief vide his letter No.54(404) (2)/EE/BCD-11/2008/592 dated 25/3/2011 uptil 16/7/2009.None of the parties however, have brought this letter dated 25.3.2011 whereby, the completion period was extended upto 16.7.2009 on record as could have thrown the light on the aspect as to whether the extension was without any prejudice to the right under Clause 2 of the Agreement. In absence whereof, and taking into consideration that the extension is by exercising discretion under Clauses 5.3 and 5.4 of the Agreement . The case is examined in this context. 4. The applicant was issued notice on 25.4.2011 regarding levy of compensation of Rs.7,23,534/- under clause 2 of Agreement alleging that the completion of work was delayed by 234 days. Applicant denied his liability on the ground that after due consideration the extension for completion of work having been granted upto 16.7.2009 and work being completed and handed over before 16.7.2009 there is no justification for levying compensation. Respondent negativing the claim by applicant informed him of his liability to pay Rs.7,23,534/- vide communication dated 13.5.2011. Where against applicant filed a suit for declaration that letter No.23/141/2011/ Hkks0ds0i0 /1136-A dated 13/5/2011 be declared null and void and under Section 34 of Specific Relief Act for refund of Rs.7,23,534/-. 5. In the said Civil Suit 27-A/2013, respondent herein filed an application under Section 8 of the Act of 1996, wherein, relying on clause 25 of the Agreement, being the Arbitration clause, sought dismissal. The trial Court taking into consideration clause 25 and the objection raised by the respondent vide application under Section 8 of 1996 Act, dismissed the suit and relegated the applicant to avail remedy as per Arbitration clause, by order dated 2.9.2013. 6. The trial Court taking into consideration clause 25 and the objection raised by the respondent vide application under Section 8 of 1996 Act, dismissed the suit and relegated the applicant to avail remedy as per Arbitration clause, by order dated 2.9.2013. 6. It is the case of the applicant that despite the request being made vide letter dated 30.9.2013, 4.2.2014 (reminder) and 5.8.2014, the respondent did not appoint the Arbitrator for resolving the dispute ; therefore, present application is filed for appointment of sole arbitrator. 7. The respondents have raised preliminary objection as to maintainability of present application on the ground that since the issue relates to the rate/quantum of compensation, the order passed by Superintending Engineer, under Clause 2 is not arbitrable being excepted vide Clause 25 of the Contract. Reliance is being placed on the decision by a Co-ordinate Bench of this Court in AC No.34/2007: Pawan Kumar Jain v. Union of India: decided on 7/7/2009, reported in ILR (2009) M.P. 2464 and other decisions relied on in Pawan Kumar Jain (Supra). It is also submitted that the application is barred by limitation. 8. Before dwelling on rival contention and the decision relied upon by respective parties, relevant clauses, viz, clause 2, 5 and 25 of the Agreement is taken note of: CLAUSE 2 2. If the Contractor fails to maintain the required progress in terms of clause 5 or to complete the work and clear the site on or before the Contract or extended date of completion he shall without prejudice to any other right or remedy available under the law to the Government on account of such breach, pay as agreed compensation the amount calculated at the rates stipulated below as the Superintending Engineer (whose decision in writing shall be final and binding) may decide on the amount of tendered value of the work for every completed day/month (as applicable) that the progress remains below that specified in clause 5 or that the work remains incomplete. This will also apply to items or group of items for which a separate period of completion has been specified. This will also apply to items or group of items for which a separate period of completion has been specified. i. Compensation of delay of work - @1.5% per month of delay to be computed on per day basis Provide always that the total amount of compensation for delay to be paid under this Condition shall not exceed 10% of the tendered value of work or the tendered value of the item or group of items of work for which a separate period of completion is originally given. The amount of completion may be adjusted or set of against any sum payable to the contractor under this or any other contract with the Government. In case the contractor does not achieve a particular milestone mentioned in Schedule F, or the re-schedule milestone(s) in terms of clause 5.4, the amount shown against the milestone shall be withheld to be adjusted against the compensation levied at the final grant of Extension of Time. Withholding of this amount on failure to achieve a milestone, shall be automatic without any notice to the Contractor. However, if the contractor catches up with the progress of work on the subsequent milestone, the withheld amount shall be released. In case the contractor fails to make up for the delay in subsequent miles stones, amount mentioned against each mile stone missed subsequently also shall be withheld. However, no interest whatsoever, shall be payable on such withheld amount. Clause 2A In case the contractor completes the work ahead of Scheduled completion time a bonus @ 1(one percent) of the tendered value per moth computed on per day basis shall be payable to the contractor, subject to a maximum limit of 5% (five percent) of the tendered value. The amount of bonus, if payable shall be paid along with final bill after completion of work. Provided or less the provision of Clause 2 A shall be applicable only when so provided in 'Schedule F'. CLAUSE 5 The time allowed for execution of the works as specified in the Schedule 'F' or the extended time in accordance with these conditions shall be the essence of the Contract. The execution of the works shall commence from such time period as mentioned in letter of acceptance or from the date of handing over of the site whichever is later. The execution of the works shall commence from such time period as mentioned in letter of acceptance or from the date of handing over of the site whichever is later. If the Contractor commits default in commencing the execution of the work as aforesaid, Government shall without prejudice to any other right or remedy available in law, be at liberty to forfeit the earnest money & performance guarantee absolutely. 5.1. As soon as possible after the Contract is concluded the Contractor shall submit a Time and Progress Chart for each mile stone and get it approved by the Department. The Chart shall be prepared in direct relation to the time stated in the Contract documents for completion of items of the works. It shall indicate the forecast of the dates of commencement and completion of various trades of sections of the work and may be amended as necessary by agreement between the Engineer-in-Charge and the Contractor within the limitations of time imposed in the Contract documents, and further to ensure good progress during the execution of the work, the contractor shall in all cases in which the time allowed for any work, exceeds one month (save for special jobs for which a separate programme has been agreed upon) complete the work a per mile stones given in Schedule 'F'. 5.2. If the work (s) be delayed by:- i. force majeure, or ii. abnormally bad weather, or iii. serious loss or damage by fire, or iv. civil commotion, local commotion of workmen, strike or lockout, affecting any of the trades employed on the work, or v. delay on the part of other contractors or tradesmen engaged by Engineer-in-Charge in executing work not forming part of the Contract, or vi. non-availability of stores, which are the responsibility of Government to supply or vii. non-availability or break down of tools and Plant to be supplied or supplied by Government or viii. any other cause which, in the absolute discretion of the authority mentioned in Schedule 'F' is beyond the Contractor's control. then upon the happening of any such event causing delay, the Contractor shall immediately give notice thereof in writing to the Engineer-in-Charge but shall nevertheless use constantly his best endeavours to prevent or make good the delay and shall do all that may be reasonably required to the satisfaction of the Engineer-in- Charge to proceed with the works. then upon the happening of any such event causing delay, the Contractor shall immediately give notice thereof in writing to the Engineer-in-Charge but shall nevertheless use constantly his best endeavours to prevent or make good the delay and shall do all that may be reasonably required to the satisfaction of the Engineer-in- Charge to proceed with the works. 5.3 Request for rescheduling of Mile stones and extension of time, to be eligible for consideration, shall be made by the Contractor in writing within fourteen days of the happening of the event causing delay on the prescribed form. The Contractor may also, if practicable, indicate in such a request the period for which extension is desired. 5.4. In any such case the authority mentioned in Schedule 'F' may give a fair and reasonable extension of time and reschedule the mile stones for completion of work. Such extension shall be communicated to the Contractor by the Engineer-in-charge in writing, within 3 months of the date of receipt of such request. Non application by the contractor for extension of time shall not be a bar for giving a fair and reasonable extention by the Engineer-in-Charge and this shall be binding on the contractor. CLAUSE 25 Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these condition 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 concellation, termination, completion.... abandonment thereof shall be dealt with as mentioned hereinafter: i. If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor's letter. If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor's appeal. If the contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from receipt of the decision, give notice to the Chief Engineer for appointment of arbitrator failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator. ii. Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above disputes or difference shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the word or if there be no Chief Engineer, the administrative head of the said CPWD. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacated his office due to any reason whatsoever, another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal. It is also a term of this contract that no person other than a person appointed by such Chief Engineer CPWD or the administrative head of the CPWD, as aforesaid should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all. It is also a term of this contract that no person other than a person appointed by such Chief Engineer CPWD or the administrative head of the CPWD, as aforesaid should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all. It is also a term of this contract if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-in-Charge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the Government shall be discharged and released of all liabilities under the contract in respect of these claims. The arbitration shall be conducted in accordance with the provision of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modifications or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and in all cases where the total amount of the claims by any party exceeds Rs. 1,00,000/- the arbitrator shall give reasons for the award. It is also a term of the contract that if any fees are payable to the arbitrator, these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, If any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, If any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any by whom and in what manner, such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid. 10. Fair reading of Clause 2 reveals that a contractor if fails to maintain the required progress in terms of clause 5 or to complete the work and clear the site on or before the contract or extended date of completion, he shall pay the compensation the amount of the rate stipulated in the said clause and as determined by the Superintending Engineer whose decision shall be in writing and final. In other words, prima facie, the liability for compensation arises when the contractor has failed to maintain the deadline for completion as provided under the contract or by extended date of completion. 11. Clause 5 stipulates that the "time allowed for execution of works as specified in the Schedule 'F' or the extended time in accordance with these conditions shall be the essence of contract." 12. Thus in case where there is a dispute as regards to the quantum of compensation, the respondent may be within their right to say that the same is "excepted" from being arbitered because of the contractor having agreed for the same and the decision by the Superintending Engineer is final and binding. It is in this context the decision rendered by Supreme Court in Vishwanath Sood v. Union of India and another, (1989) 1 SCC 657 and the Co-ordinate Bench in Pawan Kumar Jain (supra) is relevant. 13. Case at hand fresco a different aspect that, having completed the contracted work within extended period, and the period being extended without any reservation no liability for compensation would arise. Thus it is not the quantum but the very authority to levy the compensation is disputed. 13. Case at hand fresco a different aspect that, having completed the contracted work within extended period, and the period being extended without any reservation no liability for compensation would arise. Thus it is not the quantum but the very authority to levy the compensation is disputed. This aspect distinguishes the present case from Vishwanath Sood (supra) and Pankaj Kumar Jain (Supra) as in these cases the dispute related to determination of quantification and the quantum of compensation levied by the Superintending Engineer. 14. The decisions in Vishwanath Sood (supra) and Pawan Kumar Jain (supra) are therefore, of no assistance to the respondents. 15. In J.G. Engineers Private Limited v. Union of India and another, (2011) 5 SCC 758 while dwelling on the clauses (2), (3) (part) and 25 (part) similar to the clauses presently, we are concerned with their Lordships were pleased to hold: "18. Thus what is made final and conclusive by clauses (2) and (3) of the agreement, is not the decision of any authority on the issue whether the contractor was responsible for the delay or the department was responsible for the delay or on the question whether termination/rescission is valid or illegal. What is made final, is the decisions on consequential issues relating to quantification, if there is no dispute as to who committed breach. That is, if the contractor admits that he is in breach, or if the Arbitrator finds that the contractor is in breach by being responsible for the delay, the decision of the Superintending Engineer will be final in regard to two issues. The first is the percentage (whether it should be 1% or less) of the value of the work that is to be levied as liquidated damages per day. The second is the determination of the actual excess cost in getting the work completed through an alternative agency. The decision as to who is responsible for the delay in execution and who committed breach is not made subject to any decision of the respondents or its officers, nor excepted from arbitration under any provision of the contract. ... 20. The second is the determination of the actual excess cost in getting the work completed through an alternative agency. The decision as to who is responsible for the delay in execution and who committed breach is not made subject to any decision of the respondents or its officers, nor excepted from arbitration under any provision of the contract. ... 20. In State of Karnataka v. Shree Rameshwara Rice Mills ( 1987 (2) SCC 160 ) this Court held that adjudication upon the issue relating to a breach of condition of contract and adjudication of assessing damages arising out of the breach are two different and distinct concepts and the right to assess damages arising out of a breach would not include a right to adjudicate upon as to whether there was any breach at all. This Court held that one of the parties to an agreement cannot reserve to himself the power to adjudicate whether the other party has committed breach. This court held : "7. ... Even assuming for argument's sake that the terms of Clause 12 afford scope for being construed as empowering the officer of the State to decide upon the question of breach as well as assess the quantum of damages, we do not think that adjudication by the other officer regarding the breach of the contract can be sustained under law because a party to the agreement cannot be an arbiter in his own cause. Interests of justice and equity require that where a party to a contract disputes the committing of any breach of conditions the adjudication should be by an independent person or body and not by the other party to the contract. The position will, however, be different where there is no dispute or there is consensus between the contracting parties regarding the breach of conditions. In such a case the officer of the State, even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of Clause 12. 8. In such a case the officer of the State, even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of Clause 12. 8. We are, therefore, in agreement with the view of the Full Bench that the powers of the State under an agreement entered into by it with a private person providing for assessment of damages for breach of conditions and recovery of the damages will stand confined only to those cases where the breach of conditions is admitted or it is not disputed." 21. The question whether the issue of breach and liability are excluded from arbitration, when quantification of liquidated damages are excluded from arbitration was considered by this Court in Bharat Sanchar Nigam Ltd. v. Motorola India Ltd. ( 2009 (2) SCC 337 ). This court held : 23. The question to be decided in this case is whether the liability of the respondent to pay liquidated damages and the entitlement of the appellant, to collect the same from the respondent is an excepted matter for the purpose of Clause 20.1 of the General Conditions of contract. The High Court has pointed out correctly that the authority of the purchaser (BSNL) to quantify the liquidated damages payable by the supplier Motorolla arises once it is found that the supplier is liable to pay the damages claimed. The decision contemplated under Clause 16.2 of the agreement is the decision regarding the quantification of the liquidated damages and not any decision regarding the fixing of the liability of the supplier. It is necessary as a condition precedent to find that there has been a delay on the part of the supplier in discharging his obligation for delivery under the agreement. 24. It is clear from the reading of Clause 15.2 that the supplier is to be held liable for payment of liquidated damages to the purchaser under the said clause and not under Clause 16.2. The High Court in this regard correctly observed that it was not stated anywhere in Clause 15 that the question as to whether the supplier had caused any delay in the matter of delivery will be decided either by the appellant/BSNL or by anybody who has been authorised on the terms of the agreement. The High Court in this regard correctly observed that it was not stated anywhere in Clause 15 that the question as to whether the supplier had caused any delay in the matter of delivery will be decided either by the appellant/BSNL or by anybody who has been authorised on the terms of the agreement. Reading Clause 15 and 16 together, it is apparent that Clause 16.2 will come into operation only after a finding is entered in terms of Clause 15 that the supplier is liable for payment of liquidated damages on account of delay on his part in the matter of making delivery. Therefore, Clause 16.2 is attracted only after the supplier's liability is fixed under Clause 15.2. It has been correctly pointed out by the High Court that the question of holding a person liable for Liquidated Damages and the question of quantifying the amount to be paid by way of Liquidated Damages are entirely different. Fixing of liability is primary, while the quantification, which is provided for under Clause 16.2, is secondary to it. 26. Quantification of liquidated damages may be an excepted matter as argued by the appellant, under Clause 16.2, but for the levy of liquidated damages, there has to be a delay in the first place. In the present case, there is a clear dispute as to the fact that whether there was any delay on the part of the respondent. For this reason, it cannot be accepted that the appointment of the arbitrator by the High Court was unwarranted in this case. Even if the quantification was excepted as argued by the appellant under Clause 16.2, this will only have effect when the dispute as to the delay is ascertained. Clause 16.2 cannot be treated as an excepted matter because of the fact that it does not provide for any adjudicatory process for decision on a question, dispute or difference, which is the condition precedent to lead to the stage of quantification of damages." (emphasis supplied) 22. In view of the above, the question whether appellant was responsible or respondents were responsible for the delay in execution of the work, was arbitrable. The arbitrator has examined the said issue and has recorded a categorical finding that the respondents were responsible for the delay in execution of the work and the contractor was not responsible. In view of the above, the question whether appellant was responsible or respondents were responsible for the delay in execution of the work, was arbitrable. The arbitrator has examined the said issue and has recorded a categorical finding that the respondents were responsible for the delay in execution of the work and the contractor was not responsible. The arbitrator also found that the respondents were in breach and the termination of contract was illegal. Therefore, the respondents were not entitled to levy liquidated damages nor entitled to claim from the contractor the extra cost (including any escalation in regard to such extra cost) in getting the work completed through an alternative agency. Therefore even though the decision as to the rate of liquidated damages and the decision as to what was the actual excess cost in getting the work completed through an alternative agency, were excepted matters, they were not relevant for deciding claims 1, 3 and 11, as the right to levy liquidated damages or claim excess costs would arise only if the contractor was responsible for the delay and was in breach." 16. When the present case is tested on the principle of law as laid down in Shree Rameshwar Rice Mills (Supra) Motorola India (P) Ltd. (supra) and I.G. Engineers (supra) and J.G. Engineers (Supra) there remains no iota of doubt that the dispute sought to be referred to the Arbitrator does not fall within "excepted category". The objections to that extent stands rejected. Even otherwise it was the respondent who while objecting to the maintainability of Civil Suit No. 27-A/2013 took a stand that the forum for resolving the dispute is as per clause 25 of the agreement. The respondent cannot now retract from said stand when the dispute is sought to be resolved through arbitration by invoking clause 25 of the Contract. 17. We now come to second objection as to limitation. It is urged that the work having been completed on 16.7.2009 and the compensation being levied vide communication dated 13.5.2011 present application under Section 11(6) of 1996 for appointment of Arbitrator is "barred by limitation". 18. Sub-Section (6) of Section 11 of 1996 Act provides that: "6. 17. We now come to second objection as to limitation. It is urged that the work having been completed on 16.7.2009 and the compensation being levied vide communication dated 13.5.2011 present application under Section 11(6) of 1996 for appointment of Arbitrator is "barred by limitation". 18. Sub-Section (6) of Section 11 of 1996 Act provides that: "6. Where, under an appointment procedure agreed upon by the parties, - (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institute, fails to perform any function entrusted to him or it under that procedure, a party may requested the Chief Justice or any person or institution designed by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the 19. Evidently, no limitation period is prescribed. In such case the residuary provision contained in Article 137 of the limitation Act 1963 would be applicable which stipulates: 137. Any other application for which no period of limitation is provided elsewhere in this division. Three years When the right to apply accrues 20. In the case at hand within three years from 13.5.2011 applicant preferred the suit (filed on 2.8.2011 as evident from the Title Age Annexure A/4) which was dismissed on 2.9.2013 on an application under Section 8 of 1996 Act filed by the respondent objecting its maintainability because of the Arbitration Clause 25. Present application is filed on 13.4.2015 i.e., within three years from 2.9.2013; therefore, the application is not barred by time, objection as to limitation is also over ruled. 21. There are other judgments which were also cited at Bar; however they being not relevant in the context of present case are not adverted to. These decisions cited were in Oil and Natural Gas Corporation Ltd. v. SAW Pipes Ltd., AIR 2003 SC 2629 , Rajasthan State Industrial Development and Investment Corporation and another v. Diamond and Gem Development Corporation Limited and another, (2013) 5 SCC 470 , General Manager Northern Railway and another v. Sarvesh Chopra, (2002) 4 SCC 45 , (2015) SCC 682, Chandrakant Tukaram Nikam and others v. Municipal Corporation of Ahmedabad and another, AIR 2002 SC 997 and Pawan Kumar Jain v. Union of India, ILR (2009) MP 2464. 22. 22. In view of above analysis the application is allowed and Shri Justice K.K. Trivedi, Former Judge of M.P. High Court is appointed as a Sole Arbitrator to decide the dispute which has arisen between the applicant and respondents. The sole arbitrator will settle the terms. This Court is confident that the Arbitrator will decide the dispute expeditiously. 23. Application is finally disposed of in above terms. Arbitration application allowed.