JUDGMENT R. K. PATRA, J. — This appeal (M.A. No. 356/2001) under Section 39 of the Indian Arbitration Act, 1940 is directed against the judgment dated 28.3.2001 and decree dated 11.4.2001 passed by the learned Civil Judge (Senior Division), Bhubaneswar in T.S. No. 387 of 1999 making the award of the umpire the rule of the Court. Simultaneously the appellant has filed Civil Revi¬sion No. 125 of 2001 against the aforesaid decision of the learned Civil Judge perhaps apprehending that the appeal might not be maintainable. Since both the matters are directed against the self-same decision of the learned Civil Judge, they were heard together and are disposed of by this common order. For the sake of convenience, the parties to the litigation are hereinafter referred as the employer (appellant) and claimant (respondent). 2. The appellant invited tender for construction of work “Asphaltic over-lay on approach road I and II” inside the com¬pound of PPL Township at Paradeep as per the advertisement dated 19.8.1998. Six contractors including the respondent submitted their tenders. The tender of the respondent being lowest was accepted and the work in question was awarded in his favour by letter of intent dated 30.1.1989 (Ext.3). He started work on 13.2.1989 and completed the same on 30.3.1990. The second phase of work of about 0.66 KMs. relating to the left-over work was again awarded to the respondent by separate letter of intent dated 14.8.1990. This second phase of work was based at the repeat order dated 14.8.1990. The second phase of work was start¬ed on 13.11.1990 and was completed by the respondent on 15.2.1991. Difference between the parties cropped up in the matter of escalation of price of certain materials, rise in wages paid to the labourers and enlarged and modified scope of work etc. As they could not be amicably settled between them, the appellant appointed Justice V. Gopalaswamy, former Judge of this Court and the claimant appointed N.K. Misra, former Chief Engi¬neer, as arbitrators. The arbitrators after hearing the parties agreed that the respondent is entitled to extra claim made by him in respect of item No. E-4, E-5, E-7, E-8, E-9, and E-10. The respondent had given up his claim in respect of item nos. E-3 and E-6. The learned arbitrators, howev¬er, differed in respect of four items, namely, item Nos. The arbitrators after hearing the parties agreed that the respondent is entitled to extra claim made by him in respect of item No. E-4, E-5, E-7, E-8, E-9, and E-10. The respondent had given up his claim in respect of item nos. E-3 and E-6. The learned arbitrators, howev¬er, differed in respect of four items, namely, item Nos. E-1, E-2, E-11 and E-12 necessitating appointment of Justice J.M. Moha¬patra, a former Judge of this Court, as the umpire. The umpire in his award dated 21.6.1999, inter alia, awarded as follows : Item No. Main Repeat Order E-1 Rs. 3,17,087.67 Rs. 41,292.71 E-2 Rs. 3,01,253.03 Rs. 39,632.14 E-11 Rs. 54,707.19 Rs. 3,20,562.05 E-12 Rs. 2,10,365.20 Rs. 27,676.00 He has also awarded interest at the rate of 18% per annum on the awarded amount. The aforesaid award, as indicated, was sought to be set aside by the appellant but the learned Civil Judge by the impugned order refused to accede to the prayer. 3. Shri Ganeswar Rath, learned counsel appearing for the appellant, submitted that the umpire having travelled beyond the scope of the contract, the award rendered by him is liable to be set aside. He also submitted that non-application of mind by the umpire amounts to legal mis-conduct and since in the present case the umpire has failed to apply his mind, the impugned award relating to the aforesaid items of claim is vitiated. Shri R.K. Rath, learned counsel appearing for the respondent, on the other hand, submitted that Court does not sit in appeal over the find¬ings recorded by the umpire. According to him, the award is based on appreciation of evidence and as such it does not call for interference and the learned Civil Judge has rightly refused to set aside the award. Counsel for both sides cited a number of decisions in sup¬port of their contentions. I nned not burden this judgment with those citations because there is no dispute with regard to the following legal positions. The arbitrator’s adjudication is normally held binding between the parties because he is a Tribunal selected by them and the power of the Court to set aside, the award is restricted to the grounds set out in Section 30 of the Arbitration Act, 1940. The Court in dealing with an application to set aside an award is not to consider whether the view of the arbitrator on evidence is justified. The Court in dealing with an application to set aside an award is not to consider whether the view of the arbitrator on evidence is justified. In a case where the arbitrator has given reasons in support of the findings, the Court can interfere with such find¬ings if there is error of law apparent on the face of the record. The arbitrator cannot act arbitrarily or independently of the contract. He is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled out-side the limits of the con¬tract, the Court can set aside the award on the ground that he has acted without jurisdiction. But if he has remained within the limitations of the contract and has construed the provisions of the contract, the award cannot be interfere with unless it dis¬closes an error apparent on the face of it. 4. Keeping the aforesaid legal position in view, let me proceed to examine the award item wise. Claim item Nos. E-1 and E-2 : As both the claims in respect of the original contract as well as the repeat order are based on the same ground advanced by the respondent, they are dealt with analogously. As regards item No. E-1 the respondent claimed that he should be paid extra for preparation of surface and laying of tack coat in respect of BOQ-2. Similarly in respect of item No. E-2 his claim was that he should be paid extra for preparation of surface and laying of tack-coat in respect of BOQ-4. The umpire after discussing the rival contentions of the parties in paragraph-22 of the award recorded his finding as follows : “From the foregoing discussions, I would hold that all the conditions of the DTCN (Ext.47) would be deemed to have been incorporated in the agreement (Ext.44) and this would mean that the two impugned clauses would also be deemed to have been in¬cluded in Ext.44. The claimant is, therefore, entitled to sepa¬rate payments for the extra item E-1 and E-II.” The question that arises for consideration is whether this Court can interfere with the aforesaid finding recorded by the umpire. There is no dispute that the letter of intent was issued to the respondent on 30.1.1989. The claimant is, therefore, entitled to sepa¬rate payments for the extra item E-1 and E-II.” The question that arises for consideration is whether this Court can interfere with the aforesaid finding recorded by the umpire. There is no dispute that the letter of intent was issued to the respondent on 30.1.1989. Ext.3 is the letter of intent wherein it was stated as follows : “This is our Letter of Intent subject to signing of contract to award you the work of asphaltic overlay on Approach Road No.I and II as per terms and conditions of the said tender stipula¬tions on your offer no.nil date 26.9.1988 and subsequent discus¬sion dated 4.11.88.....” On 21.3.1989 the appellant sent two sets of draft contract for obtaining signature of the respondent in token of acceptance. The respondent on receipt of the same signed the draft contract and sent the same to the appellant in due time. It may be noticed that there was some negotiation between the parties relating to raising of valuation of the contract to Rs. 54,94,380.00 from Rs. 48,05,000.00. In Ext. 11 it was clearly stated that all other terms and conditions as stated in the tender and agreed to be¬tween the parties as per the LOI remained unaltered. In letter dated 7.12.1989 (Ext.15) the appellant stated that they were not inclined to incorporate the impugned clause (b) with regard to separate payment for surfacing and for providing tack coat. There is no dispute that the appellant accepted the offer of the re¬spondent given in his tender document (Ext.47) in regard to all the terms and conditions incorporated in Ext.47. Therefore, it goes without saying that separate payment for preparation of sur¬face and tack coat had also been accepted by the appellant. Had the appellant any objection to it, it could have clearly asked for deletion of the impugned two clauses in the contract. The umpire also noticed that in Ext.4 dated 2.3.1989 in which the draft contracts were sent to the respondent, there was no men¬tioned regarding deletion of the impugned clauses in the con¬tract. Having considered the above, the umpire again recorded a finding which is necessary to be extracted. The umpire also noticed that in Ext.4 dated 2.3.1989 in which the draft contracts were sent to the respondent, there was no men¬tioned regarding deletion of the impugned clauses in the con¬tract. Having considered the above, the umpire again recorded a finding which is necessary to be extracted. “.....On a careful perusal of these two pare-award docu¬ments, which were called for from the respondent during the hearing of the cases, there is nothing to indicate that the claimant had given up his claim in regard to the impugned items for extra payment son account of providing surface and tack coat.” The umpire also noticed that the draft contracts were signed by the respondent in March, 1989 but the appellant took a long time to sign the same which was done in December, 1989. The umpire held that the contract between the parties was concluded on 30.1.1989 on which date the appellant accepted the offer of the respondent by the Letter of Intent. In my opinion, signing of the contract does not alter the terms and conditions mentioned in the Letter of Intent Ext.3. The agreement is a formal deed of contract. Although there has been mention of “subject to signing of the contract”, both the parties agreed that Ext. 44 is a formal deed of contract. It is not disputed that the contract comes into being on acceptance of the offer. The Letter of Intent (Ext.3) clearly signifies the assent of the appellant to the offer made by the respondent. The umpire also addressed himself whether the offer of the respondent put-forth in his DTCN (Ext.47) when accepted by the Letter of Intent (Ext.3) concludes the contract between the parties or whether the formation of the contract was deferred till signing of the agreement by both parties. It is relevant to note here that in Ext.3, the Letter of Intent, the appellant had clearly stated that it awarded the work in question as per the terms and conditions of the tender stipulation in the offer dated 26.9.1988, and subsequent discus¬sion dated 4.11.1988. It is true that there was mention of the expression “subject to signing of the contract”. But in my opin¬ion, such statement does not change and alter the position indi¬cated in the Letter of Intent (Ext.3). The signing of the agree¬ment between the parties is a formal event which took place at a later stage. It is true that there was mention of the expression “subject to signing of the contract”. But in my opin¬ion, such statement does not change and alter the position indi¬cated in the Letter of Intent (Ext.3). The signing of the agree¬ment between the parties is a formal event which took place at a later stage. To repeat, the Letter of Intent (Ext.3) which was the basis of the contract had accepted the terms and conditions mentioned in the tender Ext.47. In Ext. 2 there is mention of discussion held on 4.11.1988. Those discussions were recorded in writing and were marked as Exts. R-1 and R-2. In neither of the document, there is any mention either expressly or by implication that the respondent had given up the two impugned clauses con¬tained in Ext. 47 with regard to his entitlement to receive payment on extra items. The umpire also took into account the correspondences which rested between parties with regard to the impugned clauses. Both the parties had held discussion on 18.4.1991 and the respondent’s objections were discussed and a memorandum was prepared (vide Ext.R-41). Ext. 24 is another document of January-February, 1992 wherein the appellant recommended for payment to the respondent a sum of Rs. 7,78,116.10 with regard to nine items of claims made by the respondent which included the first two items (E-1 and E-2). 5. On consideration of the submission of the counsel for parties and on perusal of the impugned award. I have no hesita¬tion to hold that the umpire has not committed any misconduct nor does the award in respect of those two items (E-1 and E-2) suffer from any error of law apparent on the face of the award. 6. Let me now proceed to consider the claim item Nos. E-11 and E-12. Claim Item No. 11 : The respondent based this claim under the heading “escala¬tion for modified and enlarged scope of work in respect of the work BOQ-2, i.e. from tendered quantity of 1200 M3 to 3076 M3 as executed under the first contract. The respondent also claimed escalation on account of rise in the cost of materials and wages etc. In this connection, he relied on Ext.2 dated 16.1.1989, the revalidation letter, in which he revalidated his rates subject to the clause that any increase in the rate of bitumen, fair wages, income tax is to be reimbursed by the appellant. The respondent also claimed escalation on account of rise in the cost of materials and wages etc. In this connection, he relied on Ext.2 dated 16.1.1989, the revalidation letter, in which he revalidated his rates subject to the clause that any increase in the rate of bitumen, fair wages, income tax is to be reimbursed by the appellant. Shri Ganeswar Rath, learned counsel appearing for the appel¬lant, relying on Ext. 44 in Article 38 (1) submitted that the claim is not tenable. The said provision says that all price rates shall be fixed for the duration of the contract and shall not be subject to escalation of any description whatsoever. It is rele¬vant to note that the umpire did not allow any escalation in regard to the initial contract period but allowed the same in respect of the extended and modified contract. In my considered opinion, these called bar contained in Ext.44 (Article 38(1) would not be applicable to the extended and modified contract period. On 1.7.1990, the State Government enhanced the minimum wages under the Minimum Wages Act. By virtue of the statutory notification, labour charges were enhanced compelling the re¬spondent to pay the wages at the enhanced rate to his labour force. In the circumstances, the respondent could not have avoid¬ed payment of wages at the enhanced rate to the labour force. Since the umpire has not allowed any escalation with regard to the initial contract but only allowed the same with regard to the extended and modified contract period, in my opinion he has no committed any misconduct. Claim Item No.E-12 : In paragraph 37 of the award, the umpire discussed this issue and while agreeing with the view expressed by co-arbitrator N.K. Misra awarded a sum of Rs.2,10,365.20. Respondent’s conten¬tion is that the rate quoted against item BOQ-4 is for spread thickness but he was given/compacted thickness of 40 mm. BOQ-4 reads as follows : “Scrapping, clearing the road and laying of 40 mm thick asphaltic concrete (by hot process) using 12 mm and downgraded trap aggregates as per I.R.C. specification and job mix formula approved by the Engineer-in-Charge including a tack coat, all complete including consolidation with P.R.R. cost of materials T and P, machineries used for such work.” The umpire on perusal of the above was of the view that the language employed therein does not cover a case of compacted thickness. As indicated earlier, there was a difference of opin¬ion between the co-arbitrators on this item. The umpire consid¬ered both the opinions and agreed with the opinion expressed by co-arbitrator N.K. Misra. The reason as to why he disagreed with the other co-arbitrator has been indicated in the award by giving the following reasons : “ I find myself unable to agree with the aforesaid compari¬son in the absence of any reference to quantity and type of mate¬rials used for premixed bitumen concrete as envisaged in Ext.44 and Ext.47 (see page 74 of Ext.47). It is stated therein that for 50 mm consolidated thickness of bitumen concrete 20 mm size stone of 0.48 csy in cum is required, whereas for 40 mm bitumen con¬crete 12 mm size stone of 0.36 is required. There is no dispute that concrete materials of smaller size is constilier than those of bigger size. Therefore, a bare comparison of rates on the basis of 50 mm and 40 mm thickness would not lead to any definite conclusion. I would, therefore, hold that the claimant is entitled to extra rate but not at @ Rs. 95/10 M2 as awarded................” From the above discussion made by the umpire it would appear that he did not read from BOQ-4 that laying of 40 mm thick asphal¬tic concrete amounted to compacted thickness. The arbitrator or umpire would be within his jurisdiction in interpreting a partic¬ular provision of the agreement/contract. By reading BOQ-4 as a case covering work of spreading thickness, the umpire has not committed any illegality. 7. For the reasons aforesaid, we do not find any merit in this appeal which is accordingly dismissed. The learned Civil Judge refused to set aside the award by the impugned judgment which is appealable under Section 39 of the Arbitration Act, 1940. Therefore, the civil revision filed by the appellant is not maintainable. The same is accordingly dismissed. Appeal and revision dismissed.