JUDGMENT - Dr. CHANDRACHUD D.Y., J.:---Admit. The learned Counsel for the respondents waives service. By consent taken up for hearing and final disposal.

2. The arbitration petition in these proceedings under section 34 of the Arbitration and Conciliation Act, 1996 seeks to impugn an Award of a sole arbitrator, dated 23rd March, 2002. The sole arbitrator in the present case was an Additional Director General, Works, Pune.

3. In August 1996, the petitioners invited tenders for providing accommodation for 42 officers at Colaba by the construction of a building consisting of a ground and six upper floors together with related work. The tender submitted by the first respondent was accepted on 19th September, 1996. An agreement was entered into between the parties. Under the contract as originally executed, the work was required to be completed on or before 11th May, 1998. By a letter dated 30th April, 1998, the first respondent sought extension of time to complete the work. The petitioners granted an extension until 22nd November, 1998 by a letter dated 5th August, 1998. In so far as the facts of the present case are concerned, it would be material to note that the letter of approval records that an extension of time was being granted in terms of contractual condition 11(A)(vii) subject to the condition that the other conditions of the contract shall hold good in all respects. The financial effect of the extension was stated to be nil. The first respondent submitted its final bill on 21st December, 1998 reserving its right to claim additional charges in respect of the lift and for a change in the works contract tax. Disputes and differences arose between the parties and in terms of condition 70 of the General Conditions of Contract, the disputes came to be referred to the arbitration of Shri M.K. Chitkara, Additional Director General, Works, Pune. Under the terms of the arbitration agreement, the arbitrator had to be appointed by the Engineer-in-Chief, Army Headquarters which was done in the present case. The first respondent initially raised its claims before the Chief Engineer on 8th February, 2000 and on 22nd March, 2000, requested the appointing authority to appoint a sole arbitrator in accordance with the claims detailed in Annexure A to the letter. The claims of the first respondent were denied by the Chief Engineer in a letter dated 10th June, 2000. On 4th July, 2000, an arbitration petition was filed in this Court under section 11 of the Act for the appointment of an arbitrator. On 9th August, 2000, the Engineer-in-Chief appointed an arbitrator for disputes other than those listed in Appendix B to his letter. On 31st August, 2000, the first respondent requested the Engineer-in-Chief to include the claim at Appendix B within the scope of the reference. By an order dated 9th February, 2001 passed by this Court in the petition under section 11, a direction was issued to the effect that the remaining claims shall also be referred to arbitration. Accordingly, on 14th October, 2000, the first respondent submitted a statement of case. The Union of India also submitted its defence to the claim in arbitration on 25th June, 2001. The arbitral proceedings were conducted on several dates until 12th January, 2002. The Award was published on 23rd March, 2002.

4. The Award of the sole arbitrator has been challenged both on the preliminary ground that the disputes which were raised were not arbitrable as well as on merits. Each of the submissions can now be taken up for consideration.

Arbitrability.

5. In so far the arbitrability of the dispute is concerned, the learned Counsel appearing on behalf of the petitioners has sought to rely upon the provisions of conditions 11(C) of the General Conditions of Contract. In order to appreciate the submission that has been urged, it would be necessary to refer to condition 11 which includes Clauses A, B and C.

"11. Time, Delay and Extension.---(A) Time is of the essence of the Contract and is specif

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