C. L. CHAUDHRY, J. ( 1 ) PETITIONER was awarded a contract forthe supply of cast irons pigot and socket soil waste and ventpipes by D. D. A. (hereinafter called the respondent ). The case ofthe petitioner is that the terms and conditions on which supplieswere contracted were revised by writing incorporated in the agreement executed on 14/05/1981 between the parties. Certaindisputes anose between the parties out of the execution of thecontract. ( 2 ) THE engineer member of D. D. A. by his order dated14-12-1984 appointed Shri Banarsi Dass, Superintending Engineer, D. D. A. to decide the matter and make an award regardingthe disputes between the parties. The Arbitrator entered uponthe reference and after hearing the parties made his award on 16/05/1985. The award of the Arbitrator is reproduced forthe sake of convenience and reference :-380reasons FOR THE AWARD : CLAIM No. 1 : The claimants claimed a sum of Rs. 21420. 41on account of sales tox @ 4 per cent due to increase in the pricesof pig iron and hard coke. Respondents have admitted thisamount in their counter statement of facts. Hence, I allow a sumof Rs. 21420. 41 in favour of the claimants. CLAIM No. 2 : The claimants claimed a sum of Rs. 234097. 41on account of increase in the prices of hard coke with effectfrom 14-2-81. Claimants stated that in pursuance of a noticeinviting tender for supply of goods floated by the respondents,the claimants submitted their offer by their letter dated 12-2-81on the terms and conditions quoted therein including the pricesescalation clause. Thereafter, protracted negotiations took placebetween the claimants and the respondents when by letter dated6-5-81 the respondents intimated to the claimants that theiroffer was acceptable on the terms and conditions mentioned inthe said letter dated 6-5-81. However, further negotiations wereheld between the parties as the said acceptance letter dated6-5-81 required certain clarifications. Accordingly, both theparties held discussions and the claimants by their letter dated13-5-81 clarified the outstanding points. ( 3 ) THEREAFTER, the terms and conditions were incorporated inthe letter dated 13-5-81 and the same was made as part of theagreement executed on 14-5-81 between the parties. Accordingly, both theparties held discussions and the claimants by their letter dated13-5-81 clarified the outstanding points. ( 3 ) THEREAFTER, the terms and conditions were incorporated inthe letter dated 13-5-81 and the same was made as part of theagreement executed on 14-5-81 between the parties. It wasfurther stated by the claimants that it was unequivocally agreedand understood by and between the parties that the prices quotedby the claimants for supply of contracted goods was based onthe prices of pig iron and hard coke prevailing on 12-2-81 andany increase after 12-2-81 was to be paid by the respondents. The respondents gave their own calculations which showed thaton the basis of the increase in prices of hard coke w. e. f. 14-2-81the figure of Rs. 234097. 41 is correct. However, respondentsdenied their liability to pay this amount on the grounds that it isnot payable in terms of the agreement. The respondent statedthat the claimants submitted the tender after JPC announcementof 14-2-81 and they were supposed to have given their rates onthe prices prevailing on the date of submissions of tenders. Secondly, it was clear from their letter of negotiations dated16-4-81 that the claimants were knowing the fact of increase inprice of coke. They should have revised their rates at the timeof negotiations. On careful consideration of facts placed beforeme and submissions advanced in the pleadings as well as arguments, I am of the view that the claim is justified for the reasonsgiven below :-- (I) It is undisputed that an increase in the prices ofhard coke took place w. e. f. 14-2-81. The claimantshave in their offer dated 12-2-81 clearly mentionedthat the prices are based on the prevailing pricesof premium hard coke and pig iron. Based on thisoffer of the claimants further negotiations took placebetween the parties. The increase in question tookplace w. e. f. 14-2-81. There is no price escalationclause contained in the NIT similar to clause 10 (c)of form Public Witness D-7 which is otherwise there is DDAcontracts. The very purpose of inserting a priceescalation clause is that any intervening increase inthe prices of pig iron and hard coke are taken care of. (II) During negotiations based on the offer the claimantsdated 12-2-81 the claimants by their letter dated16-4-81 reduced the prices of goods to be supplied. The very purpose of inserting a priceescalation clause is that any intervening increase inthe prices of pig iron and hard coke are taken care of. (II) During negotiations based on the offer the claimantsdated 12-2-81 the claimants by their letter dated16-4-81 reduced the prices of goods to be supplied. However, the original price escalation clause on the offer dated12-2-81 stood as it was excluding payment of escalation only onaccount of any increase in price of ferrosilicon. Admittedly, theletter dated 12-2-81 was duly executed by and between the partieson Rs. 21- non-judicial stamp paper. I find no merit in the contention of the respondents that in the letter dated 16-4-81 theclaimants have shown their knowledge of increase in the pricesof hard coke w. e. f. 14-2-81 and, therefore, they have taken intoaccount the effect of the said escalation in the negotiations letterdated 16-4-81. The letter dated 16-4-81 is only in pursuanceand furtherance of the offer of the claimant s letter dated 12-2-81including the price escalation clause forming part of the agreement. In the letter dated 16-4-81 the claimants have inter aliareduced the prices of goods and modified the price escalationclause so as to exclude payment of escalation on account of increase in the prices of ferrocilicon only. Letter dated 16-4-81only lends support to the price escalation clause of the originaloffer of the claimants dated 12-2-81 which says that the pricesoffered are based on the prevailing prices of pig iron and hardcoke. The reference by the claimants to the increased price ofhard coke in the last para of their letter dated 16-4-81 is only todraw a distinction between the quality of hard coke being usedby the claimants and other manufacturers and this cannot be saidto have any hearing or relevance to the price escalation clause. (III) It is further borne out from record that the letterdated 13-5-81 from the claimants to the respondentsformed part of the agreement according to whichany increase/decrcase in prices of pig iron or premium hard coke after 12-2-81 shall be to the account of the respondents. Even from the documentsplaced on record by the parties, it is seen that evenafter 9-6-82 the claimants have requested the respndents by their letter dated 26-8-82 and 22-12-82to pay the escalation on account of increase inquestion. Even from the documentsplaced on record by the parties, it is seen that evenafter 9-6-82 the claimants have requested the respndents by their letter dated 26-8-82 and 22-12-82to pay the escalation on account of increase inquestion. No letter has been placed on record by therespndents to show that they denied payment of thisamount to the claimants on the ground of deletionthe letter dated 13-5-81. (IV) The original agreement as produced by the respondents only on 24-4-85 had the word deleted writtenacross the letter dated 13-5-81 and such deletion wassigned by the Ex. Engineer of the respondents alone. However, the signatures or seal of the claimants donot appear on the said letter dated 13-5-81 in support and proof of deletion. The unilateral deletion ofthe letter dated 13-5-81 cannot be looked into andconsidered by me. Hence, such undertaking cannotbe considered as part of the agreement. (V) The Ex. Engineer concerned of the respondents hadalso admitted by his letter dated 12-4-83 addressedto the chief Engineer that such escalation is payableto the claimants. The correctness of this letter wasnot dented by the respondents. Accordingly, I allowa sum. of Rs. 234097. 41 in favour of the claimants. Claim No. 3-In view of the fact that the amount has beenfound to be due in favour of the claimants, I allow/award interest @ 9 per cent p. a. from the date of award till payment or decree whichever is earlier on the awarded amount if the paymentof the awarded amount is not made within 90 days. " ( 4 ) THE Arbitrator filed the award in Court. Notice of thefiling of the award was given to the part es. The petitioner hasaccepted the award. However, it has been assailed on behalf ofthe respondent by means of objection petition under Sections 30and 33 of the Arbitration Act being I. A. 5245185. It is statedin the objection petition that the agreement for the supply ofstores was entered into between the parties on 14-5-81. In responseto the notice inviting tenders for the supply of stores, thepetitioner submitted his lender on 19-2-81 with a covering letterdated 12-2-81. The date on which the tender was submitted tothe respondent, the price of pig iron and hard coke had increasedon 14-2-81 by the supplier, of the commodity. The term relating to the price escalation incorporated in the letter dated12-2-81 and submitted on 19-2-81 stipulated "out prices arebased on prevailing prices". The date on which the tender was submitted tothe respondent, the price of pig iron and hard coke had increasedon 14-2-81 by the supplier, of the commodity. The term relating to the price escalation incorporated in the letter dated12-2-81 and submitted on 19-2-81 stipulated "out prices arebased on prevailing prices". Thus the prices prevailing on thedate of submission of tender were the same throughout and werenever increased at any time after the submission of the tenderand acceptance of the offer. Thereafter negotiations took placebetween the parties and the claimant submitted his fresh proposals vide letter dated 16/04/1981. By the said freshproposals the contractor reduced his rates submitted vide letterdated 12-2-81 submitted on 19-2-81. The price escalation clausecontained in the letter dated 12-2-81 was also modified in thefollowing manner : "price escalation : We agree to modify this clause to thesame form as accepted by the department in theprevious tender with Indo Swedish Pipes (fromwhom this factory has been bought by us ). Underthat escalation clause escalation is payable only onstatutory increase in prices of Pig iron and Premiumhard coke only. " ( 5 ) IT was accepted by the respondent vide letter dated6-5-1981. Thereafter the petitioner wrote letter on 13-5-1. 981signifying his acceptance but he also incorporated certain conditions and stipulation which were never agreed between the parties. However, the agreement dated 14-5-1981 was signed betweenthe parties. By inadvertance, the letter dated 13-5-1981 was alsomentioned in the agreement dated 13-5-1981. In the agreementdated 14-5-1981 was discovered at a later stage. The petitionervide his letter dated 9-6-82 agreed that the letter dated 13-5-81was to be deleted from the agreement and the letter would notform part of the agreement. The award is challenged in respectof claim No. 2 for Rs. 234097. 41 on account of increase in theprices of hard coke from 14-2-81. The objections to the awardare that the Arbitrator committed legal misconduct by taking intoconsideration extraneous matters. The Arbitrator has allowed theclaim on the ground that the letter dated 13-5-81 formed part ofthe agreement. This approach by the Arbitrator is wholly illegal. The arbitrator had no jurisdiction to rely upon the letter dated13-5-81 which had been specifically agreed to be deleted fromthe agreement by letter dated 9/06/1982 of the petitioner. The Arbitrator wholly ignored the letter dated 9-6-82. This approach by the Arbitrator is wholly illegal. The arbitrator had no jurisdiction to rely upon the letter dated13-5-81 which had been specifically agreed to be deleted fromthe agreement by letter dated 9/06/1982 of the petitioner. The Arbitrator wholly ignored the letter dated 9-6-82. The tender of the petitioner was accepted on the tems and conditionsmentioned in the letter of acceptance dated 6-5-81 and thearbitrator had no jurisdiction to go beyond the terms and conditions on which the tender was accepted. The Arbitrator hasmisread the letter dated 16-4-81 by which the petitioner hadquoted his fresh rates. ( 6 ) THE objections are contested. In the reply it is stated thatafter protracted negotiations between the parties the respondentintimated to the petitioner by letter dated 6-5-81 that the petitioncrs offer was accepted by the respondent on the terms andconditions mentioned in the letter. However, further negotiationswere held between the parties and by letter dated 13-5-81 certainmore clarifications were made by the petitioner. Thereafter, theterms and conditions agreed to between the partics were reduced towriting and incorporated in the agreement dated 14-5-81. It wasclearly agreed and understood between the parties that pricesquoted by the petitioner for the supply of the contracted goodswas based on the price of pig iron and hard coke prevailing on12-2-81 and any increase after 12-2-81 was payable by the respondent. Thereafter the petitioner supplied the contracted goodsto the respondent as per specification and to the satisfaction ofthe respondent. After 12/02/1981 and till the executionof the contract in July, 1982 there were certain increases in theprice of hard coke. ( 7 ) THE petitioner raised demand on the respondent in respect of increase in the price of pig iron and hard coke andsales tax on account of the said increase. These claims wererefuted by the respondent and the matter was referred for arbitration. It has been denied that the award is liable to be set aside. It is stated that the Arbitrator is the final Judge of the facts andthe courts are bound by the finding of fact and cannot reviewthe same unless it is unsupported by evidence and unless it appears from the award that there was no evidence to support thefinding. The Arbitrator considered the entire evidence and pleadings of the parties before arriving at his conclusion. The Arbitrator considered the entire evidence and pleadings of the parties before arriving at his conclusion. The letterdated 9-6-81 was handed over to the respondent which wasnever accepted by them and as such it did not form part of theagreement. The respondent has purported to unilaterally deletethe letter dated 13-5-81 from the agreement dated 15-5-81. Theconsent of the petitioner was not obtained for deleting the letterdated 13-5-81. From the pleadings of the parties the following issues wereframed:- WHETHER the award is liable to be set aside on the objections of respondent No. 1, D. D. A. ?relief. ( 8 ) THE parties have led evidence by way of affidavit. Themain objection of the respondent is that the Arbitrator has committed legal misconduct by ignoring the letter dated 9-6-82which was very important and very vital document for just decision of the case. According to the respondent, the Arbitratorallowed the claim on the basis of letter dated 13-5-81 whichwas incorporated in the agreement dated 14-5-81. The case ofthe respondent is that this letter dated 13-5-81 was withdrawnby subsequent letter dated 9-6-82 which was to the followingeffect:- "sub. : Tender submitted by us last year for supply ofcast iron spigot and socket soil waste and ventpipes. Ref. : Our letter No. 1etidli]237 dated 13-5-1981addressed to the Executive Engineer HD-IIID. D. A. giving certain clarification on the acceptance letter No. F. 1 (41)/hd-III/bd/sci/a/453dated 6-5-81 issued by the Executive Engineer. With reference to the discussions, held in your officetoday, the 9/06/1982 we hereby agree that ourletter dated 13-5-1981, in which we had tried toclarify certain points may be deleted from theagreement for the above mentioned work we agreethat this letter shall not form a part of the agreement. " ( 9 ) THE letter was placed on record of the Arbitrator on15-4-85 and another copy was placed on record on 22-4-85. This letter was sheet anchor of the defence of the respondent toprove that the letter dated 13-5-81 stood deleted and did notform part of the agreement dated 14-5-81. The Arbitrator hasnot discussed or referred to this letter in the reasons given byhim. The document was material to arrive at the just and fairdecision to resolve the controversy between the parties. This amounts to legal misconduct and the award is liable to be setaside on this ground. The Arbitrator hasnot discussed or referred to this letter in the reasons given byhim. The document was material to arrive at the just and fairdecision to resolve the controversy between the parties. This amounts to legal misconduct and the award is liable to be setaside on this ground. ( 10 ) ON the other hand, it was contended on behalf of thepetitioner that deletion of letter dated 13-5-81 was unilateraland it did not bear the signature of the petitioner and therefore,is of no effect. The letter dated 9-6-82 was addressed to thechief Engineer who was wholly incompetent to enter into anagreement with the petitioner. The letter dated 9-6-82 had norelevance or significance to the contract as executed between theparties on 14-5-1981. ( 11 ) I have considered the relevant contentions of the partiesand perused the award and the arbitration proceedings. Thearbitrator has taken into consideration the letter dated 13-5-81while awarding the amount to the petitioner. The respondentdda placed the letter dated 9-6-1982 on the record of thearbitration proceedings in support of their contention that letterdated 13-5-81 stood deleted from the agreement. The letter dated9-6-82 was filed before the Arbitrator on 15-4-1985 with acovering letter stating therein that the letter dated 13-5-81 whichwas initially forming part of the agreement was deleted with the. consent of the petitioner by letter dated 9-6-82. On 12-4-1985,the parties addressed arguments before the Arbitrator. In theminutes recorded on that date it is mentioned that it was arguedon behalf of the respondent that the petitioner had withdrawntheir letter dated 13-5-1981. On 24-4-1985, another copy ofletter dated 9-6-82 was placed before the Arbitrator. It is somentioned in the proceedings of that date. The case of thepetitioner before the Arbitrator in respect of this letter was thatthe DDA had no right to interpolate in the agreement withoutthe consent of the petitioner. The letter dated 9-6-1982regarding deletion of letter dated 13-5-1981 was taken afterone year by exerting undue pressure as payment of the materialsupplied was withheld. The petitioner had no other alternativebut to give such letters to the Chief Engineer who is not a competent authority. From the record it is quite clear that the respondent alleged before the Arbitrator that the letter dated13-5-81 was subsequently deleted from the agreement by letterdated 9-6-82. The document was very vital and material. Thearbitrator has not at all referred to or discussed the effect of theletter dated 9-6-82. From the record it is quite clear that the respondent alleged before the Arbitrator that the letter dated13-5-81 was subsequently deleted from the agreement by letterdated 9-6-82. The document was very vital and material. Thearbitrator has not at all referred to or discussed the effect of theletter dated 9-6-82. The document was material to arrive at thejust and fair decision to resolve the controversy between theparties. It was held in K. P. Poulose vs. State of Kerala, AIR1975 S. C. 1259 (1) as under :- "under Section 30 (a) of the Arbitration Act an awardcan be set aside when an Arbitrator has misconducted himself or the proceedings. Misconduct undersection 30 (a) has not a connotation of moral lapse. It comprises legal misconduct which is complete ifthe Arbitrator on the face of the award arrives at aninconsistent conclusion even on his own finding orarrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. " ( 12 ) FOLLOWING the dictum of the Supreme Court, I hold thatthe Arbitrator has arrived at a decision by excluding from consideration letter dated 9-6-1982 which is very material documentand throws abundant light on the controversy to help the justand fair decision. In the result, the objection petition succeedsand the award of the Arbitrator on claim No. 2 is set aside. The matter is remitted to the Arbitrator for fresh decision aftertaking into consideration the letter dated 9-6-1982. Of course,this will be done after hearing the parties. ( 13 ) THE only challenge in the objection petition was withrespect to claim No. 2 and there is no challenge to claims1 and 3. So far as the award relates to claims 1 and 3, it ismade a rule of the court. The parties are left to bear their owncosts.