JUDGMENT A.P. Shah, J. - By the present petition under Section 30 of the Arbitration Act, 1940, the petitioner is seeking to set aside the award dated 25th January, 1995 passed by the Umpire, Shri M.N. Chandurkar (retired Chief Justice). 2. The short facts concerning the arbitration award in question may be stated as follows. The petitioner is a statutory public sector corporation engaged in oil exploration, development and production of oil and natural gas. On 6th April, 1985, the petitioner published a tender notice inviting tenders from qualified marine construction contractors. The scope of work for which ONGC sough bids included the design, engineering, procurement fabrication, inspection, testing, load-out seafastening, towout, transportation, installation and precommissioning of the BB and BD well head platforms as well as optional pipelines and associated risers. Pursuant to the said tender notice, the respondent submitted a bid which was accepted by the petitioner and the contract was awarded to the respondent as per terms and conditions in the contract dated 15th October, 1986. Thereafter disputes have arisen between the petitioner and the respondent over the amounts due and payable to the respondent for construction of two offshore well platforms at south bassein filed in the Arabian sea. In all the respondent raised 13 claims, claiming U.S. $ 2,380; 473.88 described as Claims A to L in the statement of claims which was referred to the Arbitrators, Mr. R. P. Bhat nominated by the respondent and Mr. K. M. Anjeneyan nominated by the petitioner. Before the Arbitrator, the petitioner filed counter claim against the respondent claiming reduction in post drilling hook-up and short supply of spares claiming U.S. $ 225,057.00. Oral evidence was recorded by the two Arbitrators who also heard the extensive arguments. There were however differences of opinion between the two Arbitrators regarding the merits of claim of the claimants and thus the matter came to be referred to the Umpire, Shri M.N. Chandurkar. By the impugned award, the Umpire partly granted Claim Nos. 1 to 7 and 9 to 11 of the respondent whilst Claim Nos. 8 and 12 were not pressed by the respondent. Claim No. 13 of the respondent pertaining to interest which was not granted by the Umpire. However, the Umpire allowed interest at the rate of 12 % per annum (U.S. $) on the claims allowed by him from the dates mentioned against the amount till payment. 8 and 12 were not pressed by the respondent. Claim No. 13 of the respondent pertaining to interest which was not granted by the Umpire. However, the Umpire allowed interest at the rate of 12 % per annum (U.S. $) on the claims allowed by him from the dates mentioned against the amount till payment. Counter claims made by the petitioner were rejected by Umpire in toto. 3. In the petition, the petitioner herein contended that the Arbitrator misconducted in mis-interpreting and mis-construing various clauses of the contract pertaining to the work allotted to the respondent of construction of two offshore well platforms at south bassein filed in the Arabian sea and also failed to appreciate the oral evidence of Mr. Muthukarupan, who is a Chemical Engineer and on mis-conception of facts and mis-interpretation of documents on record and by failing to consider some of the relevant facts and circumstances, the erroneous and illegal award was made. Some of the findings on the basis of which the impugned award was made, consequent upon mis-reading and mis-interpreting relevant documents and evidences adduced are erroneous on the face of the record and have result in misconduct on the part of the Umpire, thereby rendering the award illegal and invalid. In support of such contention reference to various findings of the Arbitrator and the alleged impropriety of such findings with reference to certain facts and materials on record have been indicated. 4. I have heard Mr. Dada for the petitioner and Mr. Madon for the respondent. Out of several criticisms of the impugned award only one pertaining to Claim No. 9 was seriously pressed before me by Mr. Dada. I may hasten to add that in respect of the remaining claims, I find no merit in any of the objections raised on behalf of the petitioner. As far as Claim No. 9 is concerned, Mr. Dada submitted that the Umpire has committed an error apparent on the face of the record in accepting the claim of the respondent for difference in exchange rate. Mr. Dada submitted that the conclusion reached by the Umpire are totally inconsistent with findings that were recorded by him thereby rendering the award illegal and invalid. According to Mr. Dada submitted that the Umpire has committed an error apparent on the face of the record in accepting the claim of the respondent for difference in exchange rate. Mr. Dada submitted that the conclusion reached by the Umpire are totally inconsistent with findings that were recorded by him thereby rendering the award illegal and invalid. According to Mr. Dada, the Umpire has misread and mis-interpreted relevant provisions of the Income Tax Act and the award passed by him in respect of Claim No. 9 is contrary to the law laid down by the Apex Court in P. V. Raghava Reddi and another v. Commissioner of Income-tax ( AIR 1962 SC 977 ), Standard Triumph Motor Company Limited v. Commissioner of Income-tax (1993 ITR Vol. 201 p. 391). 5. In order to appreciate the submissions of Mr. Dada, it is necessary to refer to the respective pleadings of the parties. Under Claim No. 9, the respondent has in the statement of claim sought an award for and amount of U.S. $ 432,500.35 which is claimed to have been deducted by the petitioner for the purpose of meeting the liability of the respondent for surtax under the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as "the Surtax Act"). The Surtax Act was repealed in 1988, but during the time it was in force, it imposed a surtax, in addition to normal corporate tax, in the years in which the chargeable profits of the assessed for the previous year exceeded 15 % of its capital computed in accordance with the Surtax Act. According to respondent, its chargeable profits did not exceed 15 % of its capital as computed in accordance with the Surtax Act and it was therefore not liable to pay any surtax nor was nay surtax due from or payable by the respondent. Thus, according to the respondent, the petitioner has wrongfully withheld that sum of U.S. $ 432,500.35. Admittedly the petitioner has on 21st May, 1990, deposited with the Income-tax authorities a sum of Rs. 88,16,484.00 on the basis of notices under Section 226(3) of the Income-tax Act, 1961, the said amount having been held to be due to the Income-tax authorities from the respondent. The claim as made in the statement of claim was that the petitioner was liable to pay to the respondent the entire amount of U.S. $ 432,500.35, which was wrongly withheld, together with interest. The claim as made in the statement of claim was that the petitioner was liable to pay to the respondent the entire amount of U.S. $ 432,500.35, which was wrongly withheld, together with interest. An alternative claim was made that giving credit for the amount paid to the Income-tax authorities by the petitioner, the respondent was entitled to get U.S. $ 100,733.89 and interest thereon. The computation indication this claim for U.S. $ 100,733.89 was shown in Annexure 'B' to the statement of claim. 6. The stand taken by the petitioner was that they had really retained the amount with them under Section 162 of the Income-tax, Act, 1961 and that this was not a deduction under Section 195 of the Income-tax Act, 1961. The petitioner referred to its letter dated 20th April, 1989 addressed to the respondent informing the respondent that the matter regarding returning of surtax in respect of BB/BD and IJK projects had been referred to the Deputy Commissioner of Income-tax and the petitioner had not received any final decision from the said Deputy commissioner. The petitioner also referred to a letter received from the Income-tax Department by which the petitioner was directed not to release the surtax amount till further orders. A reference was then made to an order dated 4th April, 1990 received from the Deputy commissioner of Income-tax (Assessment), Special Range, Dehradun, informing the petitioner that no demand had been raised against the respondent in respect of the surtax but the petitioner was directed to deposit immediately the amount of surtax lying with them in pursuance of a notice under Section 226(3) towards liability of income-tax. According to the petitioner, they had thus deposited Rs. 88,16,484/- which according to them were equivalent to U.S.$ 689,807.00 in Government account on 21st May, 1990. Thus it was denied that there was any wrongful withholding of the amount. 7. Further case of the petitioner was that the accounts maintained by the petitioner are in terms of rupees and not US dollars and that the amount of US $ 689,807.00 retained by them cannot be covered at the current exchange rate. Thus it was denied that there was any wrongful withholding of the amount. 7. Further case of the petitioner was that the accounts maintained by the petitioner are in terms of rupees and not US dollars and that the amount of US $ 689,807.00 retained by them cannot be covered at the current exchange rate. The petitioner while admitting that they had deducted the sum of US $ 689,807.00 during the year 1987 from the invoice of BB and BD and IJK projects and gave the break up that from the amount of BB project US $ 432,500 were deducted and from IJK project account U.S. $ 257,317.00 were deducted thus making a total of US $ 689,807.00 took the stand that this amount was equivalent in rupees to Rs. 88,16,484.00 as on the date when the deduction was made. According to the petitioner, the said amount was kept in their books of account under the heading" deduction of tax of source" at the exchange rate applicable during the year 1986-87. Consequently, according to the petitioner, it was not liable for payment of any difference in Indian rupees value and US dollar between the date when the deduction was made and the time when the amount was deposited, i.e., 21st May, 1990. 8. The Umpire accepted the case of the petitioner that thought an amount of US $ 43,500.00 is, at one stage, considered by the petitioner as tax deducted at source, the said amount was really the amount retained by the petitioner out of the monies payable by them having regard to the provisions in Section 162(2) of the Income-tax Act. It was also accepted by the Umpire that Income-tax Department treated the petitioner both for the assessment year 1985-86 and assessment year 1986-87 as a representative assessee. It was observed by the Umpire that having regard to the fact that the quantum of deduction was not disputed by the respondent and having regard to the fact that Income-tax Department had treated the petitioner as a representative assessee it was not possible to hold that the petitioner had wrongfully made any deduction. It was observed by the Umpire that having regard to the fact that the quantum of deduction was not disputed by the respondent and having regard to the fact that Income-tax Department had treated the petitioner as a representative assessee it was not possible to hold that the petitioner had wrongfully made any deduction. In fact the Umpire on careful examination of the correspondence between the parties found that the petitioner did not want to retain the amount longer than necessary and therefore the Umpire rejected the contention of the respondent that there was wrongful deduction of the amount of US $ 432,500.00 by the petitioner. 9. The Umpire accepted the alternative claim of the respondent towards the difference in Indian rupee value and US dollar between the date when the deduction was made and the time when the amount was deposited, i.e. 21st May, 1990. It was held inter alia by the Umpire that the contract between the petitioner and the respondent was to pay the contract price to the respondent in terms of US dollars. Merely because the amount which was immediately payable in US dollars is paid late, whatever, be the reason, the nature of the liability to pay back the deducted amount in US dollars does not change into a liability to pay in rupees. The rate of exchange at which the conversion of the tax liability in rupees into US dollars would be the rate which was prevalent on 21st May, 1990. As a consequence the balance due out off deduction made from the invoices would have to be refunded to the respondent in terms of dollars. Consequently the respondent would be entitled to the refund of US $ 100,733.89 with interest thereon with effect from 21st May, 1990. 10. After considering the respective contentions of the parties and submissions made by the learned Counsel for the parties and the award impugned, it appears to me that the award suffers from a manifest error apparent ex facie as far as Claim No. 9 is concerned. It is the finding of the Umpire that the Income-tax Department treated the petitioner as representative assessee under Section 162 of the Income-tax Act for the assessment year 1986-87 and thee deduction was legal and not uncalled for. Thus the assessment against the petitioner was in its capacity as a representative assessee. It is the finding of the Umpire that the Income-tax Department treated the petitioner as representative assessee under Section 162 of the Income-tax Act for the assessment year 1986-87 and thee deduction was legal and not uncalled for. Thus the assessment against the petitioner was in its capacity as a representative assessee. As held by the Umpire the petitioner did not want to retain the monies beyond the period necessary. However, the petitioner was directed by the Income-tax Department not to refund but to retain the amount of surtax on the basis of computation under Section 44-B of the Income-tax Act. The petitioner was directed to deposit the amount retained by it of surtax and informed that the amount was required to be paid pursuant to the notice under Section 226(3) of the Income-tax Act. It is thus clear that the money retained in rupees in 1987 towards tax liability of the respondent was credit in the amount of the respondent in the books of accounts of the petitioner in rupees. In law the effect is that the petitioner had paid the amount to the respondent till 1987 as the money was held by it as a depositee. 11. In P. V. Raghava Reddi and another v. commissioner of Income Tax (supra), the non-resident company instructed the assessee, in view of the difficulties in this country in remitting the monies abroad, to credit the amount due to it on account of commission in the account books of the assessee awaiting further instructions regarding its remittance. The assessee was assessed as the statutory agent of the non-resident Company. The Income-tax Officer assessed the amounts credited in the accounts of the assessee as the income of the non-resident Company. The contention of the assessee was that mere entry in the books of the assessee cannot amount to receipt and that the amounts cannot be assessed until they were actually paid over to the non-resident Company or dealt with according to its directions. Rejecting the contention, it was held by the Supreme Court, as soon as the monies were credited to the accounts of non-resident (Japanese) Company, it must be held that it "received" the same and are taxable. Rejecting the contention, it was held by the Supreme Court, as soon as the monies were credited to the accounts of non-resident (Japanese) Company, it must be held that it "received" the same and are taxable. Hidayatullah, J. sitting in the Constitution Bench observed: "Held that the amounts of commission credited to the aforesaid non-resident Company's account in the books of the assessee were chargeable in the hands of the assessee firm under Section 4(1)(a). The assessee firm must be treated as a statutory agent of the Japanese Company and since a business connection subsisted during the years in question, the assessee firm could be treated as assessee for purposes of Section 42. Till the money was so credited there might be a relation of debtor and creditor, but after the amounts were credited, the money was held by the assessee firm as a depositee. The money then belonged to the Japanese Company and was held for and on behalf of that Company and was at its disposal. The character of the money changed from a debt to a deposit in much the same way as if it was credited in a Bank to the account of the Company. Thus, the amount must be held, on the terms of the agreement to have been received by the Japanese Company, and this attracts the application of Section 4(1)(a), AIR 1953 SC 140 rel. on." 12. This legal position was reiterated in Standard Triumph Motor Company Limited v. Commissioner of Income-tax (supra), wherein under a collaboration agreement between the appellant, non-resident Company and an Indian Company, the appellant was entitled to royalty of 5% on all sales effected by the Indian Company. The royalty less Indian tax had to be remitted to the appellant in pound sterling. The Indian Company credited the royalty to the appellant in its account books. With respect to its Indian income, the appellant filed its returns through the Indian Company. For the assessment years 1967-68 and 1968-69 the appellant filed its returns disclosing the royalty in which it was stated that the appellant was maintaining its account on mercantile basis. For the assessment years 1969-70, and 1970-71, the appellant admitted royalty but filed nil returns claiming that it was maintaining its account on cash basis and no part of the royalty had been received by it and that, therefore, nothing was taxable. For the assessment years 1969-70, and 1970-71, the appellant admitted royalty but filed nil returns claiming that it was maintaining its account on cash basis and no part of the royalty had been received by it and that, therefore, nothing was taxable. It was argued that mere entry into account books of the Indian Company dose not amount to receipt of income by the assessee. In other words, the said royalty can be said to have been received by the assessee only when it received the same in UK. Rejecting the contention it was held that the credit entry into the accounts of the assessee in the books of the Indian Company does amount to its receipt by the assessee and is accordingly taxable that is immaterial when it did actually receive it in UK. 13. Applying the above principle, it is clear that the money credited in the account books of the petitioner herein belonged to the respondent and it was held by the petitioner as a deposite. The finding of the Umpire that the amount was paid under Section 223(3) of the Income-tax Act shows that the amount lying as credited in favour of the respondent was the respondent's money and this can be only on the basis that it belonged to the respondent from 1987. This was not the case where the deduction was wrong or retention was wrong or there was an obligation to refund. In that case perhaps the petitioner would be liable to refund the sum to the respondent in US dollers but in the present case the petitioner was holding the money only as an assessee. Representative assessee cannot be asked to pay fluctuation in the value of the foreign currency between the date of deduction of payment and the date of payment inasmuch as the date of payment is irrelevant as liability relates to the period of assessment. In my opinion the findings recorded by the Umpire are totally ex facie inconsistent and self contradictory and the award made by the Umpire is clearly erroneous as regard Claim No. 9 Thus to my mind, the Umpire has committed serious error of law in awarding the alternative claim made by the respondent. 14. Mr. In my opinion the findings recorded by the Umpire are totally ex facie inconsistent and self contradictory and the award made by the Umpire is clearly erroneous as regard Claim No. 9 Thus to my mind, the Umpire has committed serious error of law in awarding the alternative claim made by the respondent. 14. Mr. Madon vehemently argued that the jurisdiction of this Court is extremely limited when this Court is called upon to decide the objections raised by the parties against the arbitration award and it has no jurisdiction to sit in appeal and examine the correctness of the award on merits. Mr. Madon argued that the Court has no jurisdiction to substitute its own evaluation of the conclusion of law or facts to come to the conclusion that the Umpire has acted contrary to the bargain between the parties. Mr. Madon referred to the celebrated case of Champsey Bhara & Company v. Jivraj Balloo Company (AIR 1923 PC 66), Wherein it is observed "an error of law on the face of award means that you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the Arbitrator stating the reasons for his judgment, some legal proposition which is the bais of the award and which you can then say is erroneous". Mr. Madon also relied upon the decision of the Supreme Court in (i) State of Rajasthan v. Puri Construction Company Ltd. ( 1994(6) SCC 485 = 1995(1) Arb. LR 1) (ii) M/s. Sudarsan Trading Company v. The Govt of Kerala ( AIR 1989 SC 890 = 1989(2) Arb. LR 6), and (iii) M/s. Hindustan Tea Company v. M/s. K. Shashikant & Company ( AIR 1987 SC 81 = 1987(1) Arb. LR 29). 15. The decided of the Privy Council in Champsey Bhara's was explained by the Supreme Court in Dr. S. Dutt v. University of Delhi ( AIR 1958 SC 1050 ). It was argued before the Supreme Court that even if the decision of the Arbitrator was erroneous but that was not enough; before it could be set aside, it had further to be shown that error appeared on the face of the award. Reliance was placed on the above quoted observation in Champsey Bhara's case. It was argued before the Supreme Court that even if the decision of the Arbitrator was erroneous but that was not enough; before it could be set aside, it had further to be shown that error appeared on the face of the award. Reliance was placed on the above quoted observation in Champsey Bhara's case. In para 13 of the judgment, the Supreme Court observed: "In our view, all that in necessary for an award to disclose an error on the face of it is that it must contain, either in itself or in some paper intended to be incorporated in it, some legal proposition which on the face of it and without more, can be said to be erroneous. This was the decision of the Judicial Committee in the Champscy Bhara & Company's case." 16. In Sudarsan Trading Company's case relied upon by Mr. Madon, the Supreme Court has clearly recognised that award may be set aside on the ground of error on the face of the award, but it is said that the award is not invalid merely because by a process of inference and argument it may be demonstrated that the Arbitrator has committed some mistake in arriving at is conclusion. 17. Even in the other decision of State of Rajasthan v. Puri Construction Company Limited, the Supreme Court observed on page 503 as under: "Where the error of finding of facts having a bearing on the award is patent and is easily demonstrable without the necessity of carefully weighing the various possible view points, the interference with award based on erroneous finding of fact is permissible. Similarly, if an award is based by applying a principle of law which is patently erroneous, and but for such erroneous application of legal principle, the award could not have been made, such award is liable to be set aside by holding that there has been a legal misconduct on the part of the Arbitrator ...." 18. In K. P. Paulose v. State of Kerala and another ( AIR 1975 SC 1259 ), the Supreme Court held that if Arbitrator has arrived at an inconsistent conclusion even on his own finding, the award suffered from a manifest error apparent ex facie and applying this ratio, I also constrained to hold that the award of the Umpire for difference in exchange rate is illegal and invalid. 19. 19. In the result, the petition is allowed partly. Impugned award of the Umpire is set aside so far as claim No. 9 is concerned and consequently the award of interest on the said claim is also set aside. 20. In view of the fact that the award is confirmed except Claim No. 9, decree is hereby passed under Rule 787 of the Original Side Rules in terms of the award except Claim No. 9 with future interest at the rate of 12% (twelve per cent) from the date of the decree till payment. Petition partly allowed.