C. M. Nayar,j. ( 1 ) THIS petition has been filed by the petitioner-claimant for making the Award dated January 8, 1996 rule of the court and for issuance of decree in terms thereof. ( 2 ) THE respondent invited tenders for providing railing of central verge from National Highway 8 to the beginning of diversion of approach road (Centaur Hotel crossing) in Delhi. Pursuant to the aforesaid invitation the petitioner tendered for providing of railing at Central verge on January 27, 1994 and as he was the lowest tenderer he was awarded the work by acceptance of tender on February 21, 1994. An agreement dated February 22, 1994 as a consequence was entered into between the parties. The same contained an arbitration clause 25 which reads as follows: "clause 25. Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specification designs, drawings and instructions herein 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 conditions or otherwise concerning the work, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be REFERRED TO to the sole arbitration of the person appointed by the Chief Engineer The International Airports Authority of India, in charge of the work at the time of dispute or if there be no Chief Engineer, administrative head of the Department of Engineering of said Authority at the time of such appointment. It will be no objection to any such appointment that the arbitrator so appointed is International Airports Authority of India Employee that he had to deal with the matters to which the contract relates and that in the Course of his duties as International Airports Authority of India s Employee he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally REFERRED TO being transferred or vacating his office or being unable to act for any reason, such the Chief Engineer or administrative head of the Department of Engineering as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by such the Chief Engineer or administrative head of the Department of Engineering of the Authority as aforesaid should act as arbitrator and if for any reason, that is not possible,the matter is not to be REFERRED TO to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 75,000. 00 (Rupees Seventy five thousand) and above, the arbitrator shall give reasons for the award. Subject as aforesaid the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for time being in force shall apply to the arbitration proceeding under this clause. It is a term of the contract that the party invoking arbitration shall specify the dispute or dispute to be REFERRED TO to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute. It is also a term of the contract that if the contractor (s) does/do not make any demand for arbitration in respect of any claim (s) in writing within 90 days of receiving the intimation from the Authority that the Bill is ready for payment the claim of the contractor (s) will be deemed to have been waived and absolutely barred and the Authority shall be discharged and released all liabilities under the contract in respect of these claims. The arbitrator (s) may from time to time with consent of the parties extend the time for making and publishing the award. " ( 3 ) THE disputes and differences arose between the parties and in terms of the clause as mentioned they were REFERRED TO to arbitration of Mr. The arbitrator (s) may from time to time with consent of the parties extend the time for making and publishing the award. " ( 3 ) THE disputes and differences arose between the parties and in terms of the clause as mentioned they were REFERRED TO to arbitration of Mr. R. J. Bakhru, Chief Engineer (Retd.) C. P. W. D. who was appointed by the Chief Engineer (ARC Project), Airports Authority of India, New Delhi vide his communication No. CE/arc/3/95/765 dated May 9, 1995. The said arbitrator entered upon the reference on May 15, 1995. The following disputes were REFERRED TO to for adjudication: "claim No. 1: Claim for Rs. 2,50,000. 00 increase in prices of materials and wages of labour on the analogy of 10 CC, and/or price index and/or market increase for works executed during contractual date and also for extended completion period. Claim No. 2:claim for Rs. 4,53,435. 00 additional expenses incurred for excess quantity of welding carried out. The quantity involved is 453435 cms for which further payment is claimed @ Rs. 1. 00 per cm. Claim No. 3: claim for Rs. 2,55,500. 00 being Rate difference for ornamental grill than simple grill as specified in contract. The quantity involved is 36. 5 MT for which difference in rate @ Rs. 7000. 00 per M. T is claimed. Claim No. 4: Claim for Rs. 52,000. 00 for slotting holes, nuts and bolts etc executed/provided at site, but not paid quantity involved is 13200 Nos for which rate of Rs. 4. 00 is claimed. Claim No. 5: Claim for Rs. 32,400. 00 expenses incurred on two chowkidars for additional period of 9 months each at Rs. 1800. 00 per month. Claim No. 6: Claim for Rs. 27,000. 00 additional expenses for nine months at Rs. 3000. 00 per month on employing junior engineer. Claim No. 7: Claim for Rs. 10,000. 00 as arbitration cost. Claim No. 8: Claim for interest at the rate of 24% per annum on amounts as might be awarded from 6. 3. 95 till payment. " ( 4 ) CLAIM No. 1 was denied by the respondents who took the following pleas: " (A) The extension of time was granted by them in view of the additional work. (b) Escalation in price of materials and wages of labour is payable as per clause 10 (C) of the contract. 3. 95 till payment. " ( 4 ) CLAIM No. 1 was denied by the respondents who took the following pleas: " (A) The extension of time was granted by them in view of the additional work. (b) Escalation in price of materials and wages of labour is payable as per clause 10 (C) of the contract. Clause 10 (CC) has been deleted and does not form part of the contract. No claim was raised by the claimant under clause 10 (C ). (c) Claimant had given undertaking vide their letter dated 7. 3. 95 (Ext R/4)- that they would not claim anything on account of extension of time. " ( 5 ) THE learned arbitrator returned the following findings: " (I) The delay in completion of work is not attributed to any lapse on part of claimant. (ii) Claimant is entitled to the compensation for extra expenditure due to prolongation of work executed after stipulated date of completion i. e. 26. 5. 94. (iii)The above said letter dated 7. 3. 95 (Ext. R/4) given after completion of work is without any consideration and free consent. (iv) The extra expenditure is assessed by me as Rs. 60,240. 00 at rate of Rs. 192. 00 per Quintal for 313. 75 Qtls (Excess over Agt: Qty of 41+25% ). I award Rs. 60,240. 00 in favour of claimant. "( 6 ) THE award in the above sum of Rs. 60,240. 00 has been impugned by the learned counsel for the respondent on two grounds: (A) the petitioner has claimed escalation on the basis of clause 10 (CC) which was deleted from the contract; (b) the petitioner claimant had given an undertaking vide letter dated March 7, 1995 Exhibit R/4 that he would not claim anything on account of extension of time. The escalation in price was only payable as per clause 10 (C) of the contract and therefore, this claim could not have been adjudicated upon by the arbitrator and is liable to be rejected. ( 7 ) RELIANCE is placed on the judgments as reported in Continental Construction Co. Ltd. v. State of Madhya Pradesh AIR 1988 Supreme Court 1166; P. M. Paul v. Union of India AIR 1989 Supreme Court 1034; Associated Engineering Co. v. Government of Andhra Pradesh and another AIR 1992 Supreme Court 232; Government of Kerala and another v. V. P. Jolly AIR 1992 Ker 187 . Ltd. v. State of Madhya Pradesh AIR 1988 Supreme Court 1166; P. M. Paul v. Union of India AIR 1989 Supreme Court 1034; Associated Engineering Co. v. Government of Andhra Pradesh and another AIR 1992 Supreme Court 232; Government of Kerala and another v. V. P. Jolly AIR 1992 Ker 187 . ( 8 ) IN Continental Construction Co. Ltd. (supra) the Supreme Court held that the contractor having completed the work, it was not open to him to claim extra cost towards rise in prices of material and labour and the Arbitrator could be said to have misconducted himself in not deciding the specific objection raised by the State regarding the legality of extra claim. Paragraph 5 of this judgment has been cited in this regard which reads as follows: 5. The Division bench felt that the four factual issues decided by the District Judge were more or less by the agreement and therefore, the Division Bench did not deal with these. So far as three legal issues which were REFERRED TO to him, namely, whether the claim was barred under clause 3. 3. 15, the contract was rendered ineffective in terms of Section 56 of the Contract Act due to abnormal rise in the market rate of material and labour and the claim was not entertainable under clauses 3. 3. 32, 3. 3. 33 and 3. 3. 34. The High Court considered whether the appellant was entitled to extra cost towards rise in prices of materials and labour within and beyond the contract period. The division Bench noted that the learned District Judge held that since three legal issues were specifically REFERRED TO to the arbitrator and therefore his decision had become final and binding on the parties and cannot be re agitated before the Court. Regarding the remaining issues, the State had taken objection while opposing the application under Section 20 that the appellant was not entitled to extra cost for material and labour in terms of the contract but the Court directed that this matter had to be agitated before the arbitrator and the application under Section 20 could not be dismissed on the ground that the claim would not ultimately succeed. The District Judge found and in our opinion rightly that the question regarding extra cost was a general question and not a specific legal question and the decision of the arbitrator was not final one. The arbitrator misconducted himself in allowing claim without deciding the objection of the State. In view of the specific clauses, the appellant was not legally entitled to claim for extra cost. The decision of this Court in Seth Thawardas v. Union of India, (1955) 2 SCR 48: ( AIR 1955 SC 468 ) is of no avail on this point. If no specific question of law is REFERRED TO, the decision of the arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The arbitrator is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not he can be set right by the Court provided his error appears on the face of the award. In this case, the contractor having contracted, he cannot go back to the agreement simply because it does not suit him to abide by it. The decision of this Court in M/s. Alopi Parshad v. Union of India (1960) 2 SCR 793 may be examined. There it was observed that a contract is not frustrated merely because the circumstances in which the contract was made, altered. The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event which they did not at all anticipate, a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event which they did not at all anticipate, a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. There is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous. " ( 9 ) SIMILAR view was taken in Associated Engineering Co. (supra ). Paragraphs 26 and 27 of this judgment read as under: "26. THE arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate the terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it. 27. An arbitrator who acts in manifest disregard of the contract acts without jurisdiction. His authority is derived from the contract and is governed by the Arbitration Act which embodies principles derived from a specialised branch of the law of agency (see Mustill and Boyd s Commercial Arbitration, Second Edition,p. 641 ). He commits misconduct if by his award he decides matters excluded by the agreements (see Halsbury s Laws of England, Volume II, Fourth Edition, Para 622 ). A deliberate departure from contract amounts to not only manifest disregarded of his authority or a misconduct on his part, but it may tantamount to a mala fide action. A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiates the award. A deliberate departure from contract amounts to not only manifest disregarded of his authority or a misconduct on his part, but it may tantamount to a mala fide action. A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiates the award. " ( 10 ) THE Full Bench of the Kerala High Court in Government of Kerala and another (supra) also came to the conclusion that "even non-speaking awards are liable to set aside if the awards are contrary to the basic or rather obvious features of the contract or traverse beyond the obvious terms of such contracts and so long as such decisions can be arrived at without interpreting or construing the terms of the contract. The violation must be evident from a mere look at the terms of the contract. " ( 11 ) THE learned counsel for the respondent has contended on the basis of the law as REFERRED TO to above that Clause 10 (CC) of the contract was deleted and, therefore, no claim could have been awarded under that provision. The Arbitrator, however, has examined the pleas of the respondent and came to the conclusion on appreciation of evidence that the claimant was entitled to a sum of Rs. 60,240. 00 and rejected the averments of the respondents. Though the provisions of clause 10 (CC) were deleted from the Agreement, the petitioner-claimant merely claimed the same under this Head for increase in prices of materials and wages of labour on the analogy of clause 10cc and/or price index and/or market increase for works executed during contractual date and also for extended completion period. This claim, therefore, cannot be held to be on the basis of deleted Clause 10cc but on the analogy of that provision. The escalation in prices could also be awarded under the provisions of Clause 10c of the Agreement. Reference may be made to the judgment of the Supreme Court as reported in P. M. Paul (supra) wherein the Court held that when the Arbitrator allowed escalation in contract amount it could not be termed as misconduct on which the award was liable to be set aside. Paragraphs 11 and 12 of this judgment may be reproduced as under: "11. Paragraphs 11 and 12 of this judgment may be reproduced as under: "11. IT is well-settled that an award can only be set aside under Section 30 of the Act, which enjoins that an award of an arbitrator/umpire can be set aside, inter alia, if he has misconducted himself or the proceeding. Adjudicating upon a matter which is not the subject-matter of adjudication, is a legal misconduct for the arbitrator. The dispute that was REFERRED TO to the arbitrator was, as to who is responsible for the delay, what are the repercussions of the delay in completion of the building and now to apportion the consequences of the responsibility. In the objections filed on behalf of the respondent, it has been stated that if the work was not completed within the stipulated time the party has got a right for extension of time. On failure to grant extension of time, it has been asserted, the contractor can claim difference in prices. 12. In the instant case, it is asserted that the extension of time was granted and the arbitrator has granted 20% of the escalation cost. Escalation is a normal incident arising out of gap of time in this inflationary age in performing any contract. The arbitrator has held that there was delay, and he has further REFERRED TO to this aspect in his award. The arbitrator has noted that claim I related to the losses caused due to increase in prices of materials and cost of labour and transport during the extended period of contract from 9. 5. 1980 for the work under phase I and from 9. 11. 89 for the work under phase II. The total amount shown was Rs. 5,47,618. 50. After discussing the evidence and the submissions the arbitrator found that it was evident that there was escalation and, therefore, he came to the conclusion that it was reasonable to allow 20% of the compensation under Claim I, he has accordingly allowed the same. This was a matter which was within the jurisdiction of the arbitrator and, hence, the arbitrator had not misconducted himself in awarding the amount as he has done. " ( 12 ) THE objections of the respondents on the above ground cannot be entertained as the Arbitrator has carefully considered the pleas of the parties and arrived at conclusions which are supported by evidence on record. " ( 12 ) THE objections of the respondents on the above ground cannot be entertained as the Arbitrator has carefully considered the pleas of the parties and arrived at conclusions which are supported by evidence on record. The other plea that the the petitioner-claimant had accepted not to claim anything on account of extension of time vide communication dated March 7, 1995 may now be examined. This Communication as sent by the petitioner reads as follows: "kamal KUMAR GOVERNMENT APPROVED CONTRACTOR AND GENERAL ORDER SUPPLIERS E-37, Greater Kailash-II (Masjid Moth) New Delhi 110 048 Ref. No. . . Dated 7. 3. 1995 Executive Engineer (C) II Airport Project Complex APP II IGI Airport-Term II New Delhi 110 037 Subject:maintenance of trees, Shrubs on approach road from NH-8 to Term II at IGI airport SH:p/f railing along the central verge from NH8 to beginning of diversion of road. Sir, We have completed the above said work on dt. 6. 3. 95. You are requested to please grant EOT upto 6. 3. 95. I will not claim any thing extra on account of this extension of time. " ( 13 ) THE reading of the above would show that the petitioner had already completed the work and was awaiting payment. Therefore the Communication was issued when no work remained to be carried out. The Arbitrator came to the conclusion that the delay in completion of work was not attributed due to lapse on the part of the claimant and the issuance of letter dated March 7, 1995 after completion of work was without any consideration and free consent. In any manner the reading of the letter will not show that the claimant had agreed not to accept even the amount towards increase in prices of materials and wages of labour. The conclusions of the Arbitrator are based on the assumption of facts and evidence on record after hearing both the parties. The interpretation of particular letter or a document will not be reviewed by this Court in exercise of powers in the present proceedings. Moreover, there is force in the contention of learned counsel for the petitioner that the Communication dated March 7, 1995 was sent to the respondent as the payment was withheld and was not being released. The interpretation of particular letter or a document will not be reviewed by this Court in exercise of powers in the present proceedings. Moreover, there is force in the contention of learned counsel for the petitioner that the Communication dated March 7, 1995 was sent to the respondent as the payment was withheld and was not being released. In this situation he has cited the judgment of the Bombay High Court as reported in Ravindra Anant Deshmukh v. City Industrial Development Corporation of Maharashtra Ltd. AIR 1997 Bom 284 and reference has been made to paragraph 5 which reads as follows: " We have given our careful consideration to the reasoning and conclusion of the learned single judge. We, however,find it extremely difficult to accept the same for reasons more than one. First, a question whether there was a discharge of the contract by accord and satisfaction or not itself is a dispute arising out of the contract which has to be REFERRED TO to arbitration. Second, in order to entitle the Court to refuse to refer the dispute to arbitration, there must be a voluntary and unconditional written acceptance of payment in full and final settlement of the contract. None of these conditions exists in the instant case. Obviously, there is no voluntary and unconditional written acceptance of payment by the appellant in full and final settlement of contract. By no process of reasoning or interpretation, the "no demand certificate" furnished by the appellant as a pre-condition for the scrutiny of the bill can be construed as a voluntary and unconditional acceptance of payment in full and final settlement of the contract because such a certificate was furnished along with the bill or claim obviously as a pre-condition for scrutiny of the bill much before the claimant could know as to which part of his claim was going to be accepted by the other side or what amount would be offered against his claim. It is clear in this case from the various letters issued by the respondent that it was a practice of the respondent to obtain a No demand certificate in the format supplied by it as a condition precedent for scrutiny of the bill itself. The format of the No demand certificate is as follows : "i. . . . . . . . The format of the No demand certificate is as follows : "i. . . . . . . . certify that I have no claims from CIDCO whatsoever against the Corporation in connection with or arising out of the said contract, remains unadjusted. " ( 14 ) THE above No demand certificate, in our opinion, is a certificate obtained by the respondent from the claimant before the scrutiny of the claim to ensure that the claim made in the final bill includes all claims of the contractor and no additional claim would be raised by him in future. This is the only just and reasonable interpretation of the above certificate. Any other interpretation will be contrary to the clear terms of the certificate. In any event, the above No demand certificate cannot be construed to mean discharge of the contract by accord and satisfaction, because it is required to be furnished along with the claim and even before it is scrutinised by the respondent. The question of receipt in full and final settlement can arise only after an offer is made of a specified amount by the other side in full and final settlement of the claim. It is only at that stage that one can apply his mind and accept the payment in full and final settlement if he is satisfied with the same and only in such a case, the acceptance can be termed as voluntary and unconditional. The No demand certificate issued in this case, in our view, can never be construed as accord and satisfaction and the same cannot constitute sufficient cause for refusing to refer a dispute to the arbitration. " ( 15 ) IN view of the above, the Award under claim No. 1 is not open to challenge and is, accordingly, upheld. ( 16 ) CLAIM Nos. 2,3 and 4 ( 17 ) SIMILARLY the Arbitrator has applied his mind in disposing of claims 2,3 and 4 and came to the following conclusions in paragraphs 3. 3 and 3. 4 of the Award which read as under: "3. 3 According to claimant the drawing showing simple frame work was brought to their notice when they had fully mobilized their resources and had no alternative but to agree as dictated by respondents, to avoid contractual complications and losses. Subsequently the working drawing was issued to them showing intricate ornamental work. 4 of the Award which read as under: "3. 3 According to claimant the drawing showing simple frame work was brought to their notice when they had fully mobilized their resources and had no alternative but to agree as dictated by respondents, to avoid contractual complications and losses. Subsequently the working drawing was issued to them showing intricate ornamental work. Claimant s letter dated 7. 3. 94 (Ext R/1) does not specify any drawing number. There is also no evidence on record to show the exact date on which the working drawing was received by claimant. In view of above and in all fairness, I hold that Claimant is entitled for actual type of work as executed by him at the site. 3. 4 After study of the details filed by claimant vide his reference dated 13. 11. 95, the extra amount payable is assessed by me as Rs. 2,11,335. 00 at rate of Rs. 5/79p per Kg. for 36,500 Kgs. This is based on prices prevailing on date of acceptance of tender (47. 03% above DSR 89) and does not include element of escalation which has been covered under claim No. 1 above. I award Rs. 2,11,335. 00 against Claims Nos. 2,3 and 4 above in favour of the claimant. " ( 18 ) THE learned counsel for the respondent has not been able to raise any meaningful argument to show that the Arbitrator has committed any error of law nor any act of misconduct has been pointed out which will be apparent from reading of the Award. The Award is based on consideration of evidence and documents on record and no fault can be found with the same. ( 19 ) THE Arbitrator has awarded interest at the rate of 14 per cent per annum on the awarded amount of Rs. 2,11,335. 00 with effect from April 17, 1995 to the date of payment or decree whichever was earlier. No fault can be found with the same. ( 20 ) FOR the aforesaid reasons, the objections filed by the respondent are dismissed. The Award dated January 8, 1996 is made Rule of the Court and decree in terms thereof is passed. The petitioner shall be entitled to interest at the rate of 12 per cent per annum from the date of decree till realisation.