C. L. Chandbry,j. ( 1 ) PETITIONER was awarded a contract for the supplyof cast iron spigot and socket soil waste and vent pipes by D. D. A. (herein-after called the respondent ). The case of the petitioner is that the terms andconditions on which supplies were contracted were revised by writingincorporated in the agreement executed on 14/05/1981 between the parties. Certain disputes arose between the parties out of the execution of thecontract. ( 2 ) THE engineer member of D. D. A. by his order dated 14. 12. 1984appointed Shri Banarsi Dass, Superintending Engineer, DDA to decide thematter and make an award regarding the disputes between the parties. The Arbitrator entered upon the reference and after hearing the parties madehis award on 16/05/1985. The award of the Arbitrator is reproduced forthe sake of convenience and reference :-REASONS FOR THE AWARD. ( 3 ) CLAIM No. 1 : The claimants claimed a sum of Rs. 21420. 41 onaccount of sales tax @ 4% due to increase in the prices of pig iron and hardcoke. Respondents have admitted this amount in their counter statement offacts. Hence, I allow a sum of Rs 21420. 41 in favour of the claimants. ( 4 ) CLAIM No. 2 : The claimants claimed a sum of Rs. 234097. 41 onaccount of increase in the prices of hard coke with effect from 14. 2. 81claimants stated that in pursuance of a notice inviting tender for supply ofgoods floated by the respondents, the claimants submitted their offer by theirletter dated 12. 2. 81 on the terms and conditions quoted therein including theprices escalation clause. Thereafter, protracted negotiations took placebetween the claimants and the respondents when by letter dated 6. 5. 81 therespondents intimated to the claimants that their offer was acceptable on theterms and conditions mentioned in the said letter dated 6. 5,81. However,farther negotiations ware held between the parties as the said acceptanceletter dated 6. 5. 81 required certain clarifications. Accordingly, both theparties held discussions and the claimants by their letter dated 13. 5. 81clarified the outstanding points. ( 5 ) THEREAFTER, the terms and conditions were incorporated in theletter dated 13. 5. 81 and the same was made as part of the agreement executedon 14. 5. 81 between the parties. 5. 81 required certain clarifications. Accordingly, both theparties held discussions and the claimants by their letter dated 13. 5. 81clarified the outstanding points. ( 5 ) THEREAFTER, the terms and conditions were incorporated in theletter dated 13. 5. 81 and the same was made as part of the agreement executedon 14. 5. 81 between the parties. It was further stated by the claimants thatit was unequivocally agreed and understood by any between the parties thatthe prices quoted by the claimants for supply of contracted goods was basedon the prices of pig iron and hard coke prevailing on 12. 2 81 and anyincrease after 12 2. 81 was to be paid by the respondents. The respondentsgave their own calculations which showed that on the basis of the increasein prices of hard coke w. e f. 14. 2. 81 the figure of Rs. 234097. 41 is correct. However, respondents denied their liability to pay this amount on the groundthat it is not payable in terms of the agreement. The respondent stated thatthe claimants submitted the tender after JPC announcement of 14. 2 81 andthey were supposed to have given their rates on the prices prevailing on thedate of submissions of tenders Secondly, it was clear from their letter ofnegotiations dated 16. 4. 81 that the claimants were knowing the fact ofincrease in price of coke. They should have revised their rates at the time ofnegotiations. On careful consideration of facts placed before me and submissions advanced in the pleadings as well as arguments. I am of the view thatthe claim is justified for the reasons given below :- (I) It is undisputed that an increase in the prices of hard coke tookplace w. e. f. 14. 2. 81. The claimants have in their offer dated12. 2. 81 clearly mentioned that the prices are based on theprevailing prices of premium hard coke and pig iron. Based onthis offer of the claimants further negotiations took placebetween the parties. Tee increase in question took place w. ef. 14. 2. 81. There is no price escalation clause contained in thenin similar to clause 10 (c) of form PWD-7 which is otherwisethere in DDA contracts. The very purpose of inserting a priceescalation clause is that any intervening increase in the pricesof pig iron and hard coke are taken care of. (ii) During negotiations based on the offer the claimantsdated 12. 2. 81. There is no price escalation clause contained in thenin similar to clause 10 (c) of form PWD-7 which is otherwisethere in DDA contracts. The very purpose of inserting a priceescalation clause is that any intervening increase in the pricesof 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 dated 164. 81reduced the prices of goods to be supplied. However, theoriginal price escalation clause in the offer dated 12. 2. 81stood as it was excluding payment of escalation only onaccount of any increase in price of ferrosilicon. Admittedly,the letter dated 12. 2. 81 was duly executed by and between theparties on Rs, 2. 00 non-judicial stamp paper. I find no merit incontention of the respondents that in the letter dated 16. 481the claimants have shown their knowledge of increase in theprices of hard coke w. e f. 14. 2. 81 and therefore, they havetaken into account the effect of the said escalation in thenegotiations letter dated 16. 4 81. The letter dated 164. 81 isonly in pursuance and furtherance of the offer of the claimant sletter dated 12. 2. 81 including the price escalation clauseforming part of the agreement. In the letter dated 16. 4. 11 theclaimants have inter alia reduced the prices of goods andmodified the price escalation clause so as to exclude paymentof escalation on account of increase in the prices of ferrocilicononly. Letter dated 16481 only lands support to the priceescalation clause of the original offer of the claimants dated12. 2. 81 which says that the prices offered are based on theprevailing prices of pig iron and hard coke. The reference bythe claimants to the increased price of hard coke in the lastpara of their letter dated 16. 4. 81 is only to draw a distinctionbetween the quality of hard coke being used by the claimantsand other manufacturers and this cannot be said to have anybearing or relevance to the price escalation clause. (iii) It is further borne out from record that the latter dated 13. 5. 81from the claimants to the respondents formed part of the agreement according to which any increase/decrease in prices of pigiron or premium hard coke after 12. 2. 81 shall be to the accountof the respondents. Even from the documents placed on recordby the parties, it is seen that even after 9. 6. 5. 81from the claimants to the respondents formed part of the agreement according to which any increase/decrease in prices of pigiron or premium hard coke after 12. 2. 81 shall be to the accountof the respondents. Even from the documents placed on recordby the parties, it is seen that even after 9. 6. 82 the claimantshave requested the respondents by their letter dated 26. 8. 82 and221282 to pay the escalation on account of increase inquestion. No letter has been placed on record by the respondents to show that they denied payment of this amount to theclaimants on the ground of deletion of the letter dated 13. 5. 81. (iv) The original agreement as produced by the respondents onlyon 24 4. 85 had the word deleted written across the letter dated13. 5. 81 and such deletion was signed by the Ex. Engineer ofthe respondents alone. However, the signatures or seal of theclaimants do not appear on the said letter dated 13. 5 81 insupport and proof of deletion. The unilateral deletion of theletter dated 13. 5 81 cannot be looked into and considered byme. Hence, such undertaking cannot be considered as part ofthe agreement. (v) The Ex. Engineer concerned of the respondents had alsoadmitted by his letter dated 12. 483 addressed to the Chiefengineer that such escalation is payable to the claimants. Thecorrectness of this letter was not denied by the respondents. Accordingly, I allow a sum of Rs. 234097. 41 in favour of theclaimants. ( 6 ) CLAIM No: 3. In view of the fact that the amount has been foundto be due in favour of the claimants, I allow/award interest @ 9% pa. fromthe date of award till payment or decree whichever is earlier on the awardedamount if the [payment of the awardad amount is not made within 90 days. " ( 7 ) THE Arbitrator filed the award in court. Notice of the filing of theaward was given to the parties. The petitioner has accepted the award. However, it has been assailed on behalf of the respondent by means of objection petition under Sections 30 and 33 of the Arbitration Act being 1. A. 5245/85. It is stated in the objection petition that the agreement for thesupply of stores was entered into between the parties on 14. 5. 81. In responseto the notice inviting tenders for the supply of stores, the petitioner submittedhis tender on 19. 2. A. 5245/85. It is stated in the objection petition that the agreement for thesupply of stores was entered into between the parties on 14. 5. 81. In responseto the notice inviting tenders for the supply of stores, the petitioner submittedhis tender on 19. 2. 81 with a covering letter dated 12. 2. 81. The date on whichthe tender was submitted to the respondent, the price of pig iron and hardcoke had increased on 14. 2. 81 by the suppliers of the commodity. The termrelating to the price escalation incorporated in the letter dated 122. 81 andsubmitted on 19. 2. 81 stipulated our prices are based on prevailing prices. "thus the prices prevailing on the date of submission of tender were the samethroughout and were never increased at any time after the submission of thetender and acceptance of the offer. Thereafter negotiations took placebetween the parties and the claimant submitted his fresh proposals vide letterdated 16/04/1981. By the said fresh proposals the contractor reducedhis rates submitted vide letter dated 12. 2. 81 submitted on 19. 2. 81. The priceescalation clause contained in the letter dated 12. 2. 81 was also modified inthe following manner: "price escalation : We agree to modify this clause to the same formaccepted by the department in the previous tender with Indoswedish Pipes (from whom this factory has been bought by us ). Under that escalation is payable only on statutory increase in pricesof Pig iron and Premium hara coke only. "it was accepted by the respondent vide letter dated 6. 5. 1981. Thereafter the petitioner wrote letter on 13. 5. 1981 signifying his acceptancebut he also incorporated certain conditions and stipulation which were neveragreed between the parties. However, the agreement dated 14. 5. 1981 wassigned between the parties. By inadvertance, the letter dated 13. 5. 1981 wasalso mentioned in the agreement dated 13. 5. 1981. In the agreement dated14. 5. 81 was discovered at a later stage. The petitioner vide his letter dated9. 6. 82 agreed that the letter dated 13. 5. 81 was to be deleted from the agreement and the letter would not from part of the agreement. The awarded ischallenged in respect of claim No. 2 for Rs. 234097/47. on account ofincrease in the prices of hard coke from 14. 2. 81. The objections to the awardare that the Arbitrator committed legal misconduct by taking into consideration extraneous matters. 81 was to be deleted from the agreement and the letter would not from part of the agreement. The awarded ischallenged in respect of claim No. 2 for Rs. 234097/47. on account ofincrease in the prices of hard coke from 14. 2. 81. The objections to the awardare that the Arbitrator committed legal misconduct by taking into consideration extraneous matters. The Arbitrator has allowed the claim on the groundthat the letter dated 13. 5. 81 formed part of the agreement. This approachby the Arbitrator is wholly illegal. The arbitrator had no jurisdiction torely upon the letter dated 13. 5. 81 which had been specifically agreed to bedeleted from the agreement byletter dated 9/06/1982 of the petitioner. The Arbitrator wholly ignored the letter dated 9. 6. 82. The tender of thepetitioner was accepted on the terms and conditions mentioned in the letterof acceptance dated 6. 5. 81 and the Arbitrator had no jurisdiction to gobeyond the terms and conditions on which tender was accepted. Thearbitrator has misread the letter dated 16. 4. 81 by which the petitioner hadquoted his fresh rates. ( 8 ) THE objections are contested. In the reply it is stated that afterprotracted negotiations between the parties the respondent intimated to thepetitioner by letter dated 6. 5. 81 thnt the petitioner s offer was accepted bythe respondent on the terms and conditions mentioned in the letter. However,further negotiations were held between the parties and by letter dated 13. 5. 81certain more clarifications were made by the petitioner. Thereafter, theterms and conditions agreed to between the parties were reduced to writingand incorporated in the agreement dated 14. 5. 81. It was clearly argeed andunderstood between the parties that prices quoted by the petition for thesupply of the contracted goods was based on the price of the pig iron andhard coke prevailing on 12 2. 81 and any increase after 12. 2. 81 was payableby the respondent. Thereaftar the petitioner supplied the contracted groodsto the respondent as per specification and to the satisfaction of the respondent. After 12/02/1981 and till the execution of the contract in July,1982 there were certain increases in the price of hard coke. ( 9 ) THE petitioner raised demand on the respondent in respect ofincrease in the price of pig iron and hard coke and sales tax on account ofthe said increase. After 12/02/1981 and till the execution of the contract in July,1982 there were certain increases in the price of hard coke. ( 9 ) THE petitioner raised demand on the respondent in respect ofincrease in the price of pig iron and hard coke and sales tax on account ofthe said increase. These claims were refuted by the respondent and thematter was REFERRED TO for arbitration. It has been denied that the award isliable to be set aside It is stated that the Arbitrator is the final Judge ofthe facts and the courts are bound by the finding of facts and cannot reviewthe same unless it is unsupported by evidence and unless it appears fromthe award that there was no evidence to support the finding. The Arbitratorconsidered the entire evidence and pleadings of the parties before arrivingat his conclusion. The letter dated 9. 6. 82 was handed over to the respondent which was never accepted by them and as such it did not form partof the agreement. The respondent has purported to unilaterally delete theletter dated 13. 5. 81 from the agreement dated 14. 5. 81. The consent of thepetitioner was not obtained for deleting the letter dated 13. 5. 81. ( 10 ) FROM the pleadings of the parties the following issues wereframed: -Whether the award is liable to be set aside on the objections ofrespondent No. 1. DDA ?relief. The parties have led evidence by way of affidavit. The main objection of the respondent is that the Arbitrator has committed legal misconduct by ignoring the letter dated 9. 6. 82 which was very importantand very vital document for just decision of the case. According to the respondent, the Arbitrator allowed the claim on the basis of letter dated13. 5. 81 which was incorporated in the agreement dated 14. 5. 81. The caseof the respodnent is that this letter dated 13. 5. 81 was withdrawn by subsequent letter fialed 9. 6. 82 which was to the following effect :- "sub : Tender submitted by us last year for supply of cast ironspigot and socket soil waste and vent pipes. Ref: Our letter No, IET/dli 237 dated 13. 5. 1981 addressed tothe Executive Engineer HD-III DDA giving certain clarification on the acceptance letter No. F. l (4l)/hd-lll/bd/sci/a/453 dated 6. 5. 81 issued by the Executive Engineer. Ref: Our letter No, IET/dli 237 dated 13. 5. 1981 addressed tothe Executive Engineer HD-III DDA giving certain clarification on the acceptance letter No. F. l (4l)/hd-lll/bd/sci/a/453 dated 6. 5. 81 issued by the Executive Engineer. With reference to the discussions held in your office today, the 9/06/1982 we hereby agree that our letter dated 13. 5,1981,in which we had tried to clarify certain points may be deleted fromthe agreement for the above mentioned woik we agree that thisletter shall not from a part of the agreement. " ( 11 ) THE letter was placed on record of the Arbitrator on 15. 4. 85 andanother copy was placed on record on 22. 4. 85. This letter was sheet anchorof the defence of the respondent to prove that the letter dated 13. 5. 81 stooddeleted and did not form part of the agreement dated 14. 5. 81. The Arbitratorhas not discussed or REFERRED TO to this letter in the reasons given by him. Thedocument was material to arrive at the just and fair decision to resolve thecontroversy between the parties. This amounts to legal misconduct andthe award is liable to be set aside on this ground. ( 12 ) ON the other hand, it was contented on behalf of the petitionerthat deletion of letter dated 13. 5. 81 was unilateral and it did not bear thesignature of the petitioner is of no effect. The letter dated 9. 6. 82 wasaddressed to the Chief Engineer whowas wholly incompetent to enter intoan agreement with the petitioner The letter dated 9. 6. 82 had no relevanceor signature to the contract as executed between the parties on 14. 5. 1981. ( 13 ) I have considered the relevant contentions of the parties andperused the award and the arbitration proceedings. The Arbitrator has takeninto consideration the letter dated 13. 5. 81 while awarding the amount tothe petitioner. The respondent DDA placed the letter dated 9. 6. 1982 on therecord of the Arbitration proceedings in support of their contention thatletter dated 13. 3. 81 stood deleted from the agreement. The letter dated9. 6. 82 was filed before the Arbitrator on 154 1985 with a convering letterstaling therein that the letter dated 13. 5. 81 which was initially forming paitof the agreement was deleted with the consent of the petitioner by letterdated 9. 682. On 124. 3. 81 stood deleted from the agreement. The letter dated9. 6. 82 was filed before the Arbitrator on 154 1985 with a convering letterstaling therein that the letter dated 13. 5. 81 which was initially forming paitof the agreement was deleted with the consent of the petitioner by letterdated 9. 682. On 124. 1985, the parties addressed arguments before thearbitrator In the minutes recorded on that date it is mentioned that it wasargued on behalf of the respondent that the petitioner had withdrawn theirletter dated 135 1981. On 2441985, another copy of letter dated 9. 6. 82was placed before the Arbitrator It is so mentioned in the proceedings ofthat date. The case of the petitioner before the Arbitrator in respect ofthis letter was that the DDA had no right to interpolate in the agreementwithout the consent of the petitioner. The letter dated 9. 6. 1982 regardingdeletion of letter dated 13. 5. 1981 was taken after one year by exerting unduepressure as payment of the material supplied was withheld. The petitioner hadno other alternative but to give such letters to the Chief Engineer who is nota competent authority. From the record it is quite clear that the respondentalleged before the Arbitrator that the letter dated 13. 5 81 was subsequentlydeleted from the agreement by letter dated 9. 6. 82. The document was veryvital and material. The Arbitrator has not at all REFERRED TO to or discussed theeffect of letter dated 96. 1982. The document was material to arrive at thejust and fair decision to resolve the controversy between the parties. It washeld in K P. Poulose v. State of Kerala, AIR 1975 S. C. 1259 as under : "under Section 30 (a) of the Arbitration Act an award can be setaside when an Arbitrator has misconducted himself or the proceedings. Misconduct under Section 30 (a) has not a connotation ofmoral lapse. In comprises legal misconduct which is complete ifthe Arbitrator on the face of the award arrives at an inconsistentconclusion even on his own finding or arrives at a decision byignoring very material documents which throw abundart light onthe controversy to help a just and fair decision".