JUDGMENT 1. - The appeal challenges the order dated 21.2.2006, passed by the District Judge, Jaipur, whereby the learned Judge has rejected most of the objections filled by the appellant against the arbitral award dated 9.4.2003. 2. The brief facts of the case are that the appellant had issued a Notice Inviting Tenders for the construction of Jaipur Bypass Zone-C (22KM). The work was to be completed within a period of two years, i.e. from 10.4.1995 to 9.4.1997. The estimated cost was Rs. 3,25,000/-. However, subsequently, a corrigendum was issued by the appellant whereby the period for completion was reduced to 15 months and the cost of work was also reduced from Rs. 3,25,000/- to Rs. 2,35,000/-. The length of the construction was also reduced from 22 Kms to 18 Kms. Initially, the tender of M/s. Jagdish Prasad Agrawal was accepted. According to the contract entered into between the appellant and M/s. Jagdish Prasad Agrawal, the escalation price was payable to the contractor by the appellant. The escalation price was to be calculated on the basis of the base price of labor and material as on 24.7.1995. After M/s. Jagdish Prasad completed its project of 18 Kms., the appellant proposed to M/s. Jagdish Prasad to take up the construction of the remaining 4 kms. out of the original 22 Kms. However, M/s. Jagdish Prasad refused to take up the said work. Therefore, the said work was offered to the present respondent, Ravindra Kumar Agrawal on the rates and conditions as approved in favour of M/s. Jagdish Prasad. This offer was made on 22.5.1996. However, after the completion of the project by the respondent, certain dispute with regard to the escalation price arose between the parties. Therefore, the respondent requested for appertaining a Sole Arbitrator in pursuance of the Arbitration Agreement. Consequently, Mr. S.N. Duggar, Retired Secretary and Chief Engineer, The State of Rajasthan was appointed as the Sole Arbitrator. 3. The respondent submitted four claims before the learned Sole Arbitrator. The respondent claimed a compensation of Rs. 11,11,255/- along with 18% interest. The appellant, in turn, submitted a detailed reply and also submitted a counter claim before the learned Sole Arbitrator. After hearing both the parties and after going through the evidence, vide award dated 9.4.2003, the learned Sole Arbitrator granted a compensation of Rs. 9,74,781/- along with an interest @ 12% per annum w.e.f. 9.4.2003. 4. 11,11,255/- along with 18% interest. The appellant, in turn, submitted a detailed reply and also submitted a counter claim before the learned Sole Arbitrator. After hearing both the parties and after going through the evidence, vide award dated 9.4.2003, the learned Sole Arbitrator granted a compensation of Rs. 9,74,781/- along with an interest @ 12% per annum w.e.f. 9.4.2003. 4. The appellant filed an application under Section 34 of the Arbitration and Conciliation Act (henceforth to be referred as the Act) before the learned Judge raising certain objections against and award dated 9.4.2003. The main thrust of the objections was that there was no condition with regard to the grant of escalation price to the claimant. Without realizing, absence of such a condition, but while considering intra-departmental correspondence, the learned Sole Arbitrator has granted a compensation of Rs. 6,06,381/- in favour of the claimant- respondent under the category of escalation of price. Secondly, that the interest rate paid by the learned Sole Arbitrator is extremely high. The respondent filed his reply to the said objections. After hearing both the parties, vide order dated 21.2.2006 the learned Judge has rejected the objection with regard to the escalation price, but has accepted the objection with regard to the interest rate and has reduced the interest rate from 12% to 6% per annum. Since the appellant is aggrieved by the rejection of the objection with regard to the escalation price, it has submitted the present appeal before this court. 5. Mr. V.P. Mathur, the learned counsel for the appellant, has vehemently argued that since there was no stipulation with regard to the grant of escalation price to the respondent, the same could not be granted to the respondent by the learned Sole Arbitrator. However, he did concede, and fairly so, that the appellant had agreed to give the contract to the respondent on same terms and conditions as was given to M/s. Jagdish Prasad, the earlier contractor. According to the said contract entered between the appellant and M/s. Jagdish Prasad, a condition with regard to the payment of escalation price did exist. 6. On. the other hand Mr. According to the said contract entered between the appellant and M/s. Jagdish Prasad, a condition with regard to the payment of escalation price did exist. 6. On. the other hand Mr. Suresh Goyal, the learned counsel for the respondent-claimant has argued that besides the contract between the appellant and M/s. Jagdish Prasad, other documentary evidence was produced before the learned Sole Arbitrator to prove that the appellant had agreed to pay the escalation price to the respondent. According to the note-sheet dated 25.5.1996, it was clearly mentioned that "on persuasion. M/s. Ravindra Kumar has agreed to work on the rates offered by Shri Jagdish Prasad Agrawal along with the dated of completion as 14.4.1997 including escalation to be paid as per Jagdish Prasad Agrawal from the date of his tender quoted on 24.7.1995". Subsequently, the C.P.M. & C.M.D. approved the said offer. Lastly, the learned counsel has argued that the scope of judicial review of an arbitral award is extremely limited. If two views are possible, then the court is not permitted to substitute its view for the view of the learned Sole Arbitrator. Hence, he has supported the impugned order. 7. We have heard both the learned counsel and perused the impugned order. 8. The scope of judicial review of the arbitral award is a narrow one. In order to escape the agony of a protracted trial, in order to save time and expenses, arbitration was developed as an alternate dispute resolution forum. In the commercial, world, where time is of essence and large amount of money is involved, the parties prefer to go for arbitration rather than for civil suit. The long gestation period of a civil suit, which meanders through a labyrinth of procedures and, at times, climbs the judicial pyramid, has persuaded the parties to place an arbitration clause in the contract. The scope and ambit of judicial review over an award passed by an arbitrator are now well settled. The arbitrator is a Judge appointed by both the parties after reaching a consensus, or a Court appoints him under the provisions of the Act. Since the Arbitrator is a Judge appointed by the parties, the parties are bound by his decision even if the award is wrong either on law or on facts. Even an error of law on the face of the award cannot nullify the award. Since the Arbitrator is a Judge appointed by the parties, the parties are bound by his decision even if the award is wrong either on law or on facts. Even an error of law on the face of the award cannot nullify the award. Thus, his decision is final unless the reasons given by him are totally perverse or the award is based on wrong proposition of law. But once it is found that the view of the Arbitrator is a plausible one, the Court cannot reverse it by interfering with the award. Moreover, the interpretation of a contract is a matter solely within the domain of the arbitrator. Therefore, the Court should be very weary of interpreting the contract. Similarly, the courts are precluded from reappraising the evidence produced before the arbitrator. The court does not sit in an appeal over the verdict of an arbitrator by reexamining and reappraising the materials placed before him. In case two views are possible, the Court is not justified in interfering with the award by adopting its own interpretation. Even if it could be proved that the arbitrator has committed some mistake while arriving at his conclusion, such a proof would not invalidate the award. Moreover, it is not "misconduct" on the part of the arbitrator to give a reasoned decision, where his error is one of the fact or of law. Furthermore, even if there is an error of construction of the agreement by the arbitrator, the same is not amenable to correction. Lastly the reasonableness of an award is not a matter for the Court to consider unless the award is preposterous or absurd. [(Ref. to M/s. Engineers Syndicate v. State of Bihar & Ors. (2007 AIR SCW 985) , Maharashtra State Electricity Board v. 'Sterlite Industries (India) & Anr. Lastly the reasonableness of an award is not a matter for the Court to consider unless the award is preposterous or absurd. [(Ref. to M/s. Engineers Syndicate v. State of Bihar & Ors. (2007 AIR SCW 985) , Maharashtra State Electricity Board v. 'Sterlite Industries (India) & Anr. ( 2001(8) SCC 482 ) , Bharat Coking Coal Ltd. v. L.K. Ahuja ( 2004(5) SCC 109 ) , 2004(2) WLC (SC) Civil 400 : Rajasthan State Electricity Board v. M/s. Gammon India Ltd. (1998 DNJ (Raj.) 680) , Indu Engineering & Textiles Ltd. v. Delhi Development Authority ( AIR 2001 SC 2668 ) , State of U.P. v. Allied Constructions (2003(2) WLC (SC) Civil 568 : ( 2003(7) SCC 396 ) , Rajasthan State Mines & Minerals Ltd. v. Eastern Engineering Enterprises ( 1999(9) SCC 283 ) and D.D. Sharma v. Union of India ( 2004(5) SCC 325 )] . Section 34 of the Act is as under : "34. Application for setting aside arbitral award- (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the court only if, - (a) the party making the application furnish that,- (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or failing any indication thereon, under the law for the time being in force; or (iii) the part making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration. Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. Explanation : Without prejudice to the generality of sub-clause (ii) of clause (b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal : Provided that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award." 9. Even according to the said provision, the scope for judicial review is rather limited. Even according to the said provision, the scope for judicial review is rather limited. Of course, in the case of Oil and Natural Gas Corporation Ltd. v. SAW Pipes Ltd. 2003(1) WLC (SC) Civil 709 : ( AIR 2003 SC 2629 ) , the Hon'ble Supreme Court has extensively dealt with the scope of Section 4(2)(v)(b)(ii) of the Act. According to the Apex Court, an arbitral award can e set aside if the court finds that the arbitral award is in conflict with the public policy of India". The term "public policy of India" has been interpreted by the Hon'ble Court to mean, any award which is contrary to- (a) fundamental policy of India law; (b) the interest of India; (c) justice or morality, or (d) in addition, if it is patently illegal. Illegality must go to the route of the matter and if the illegality is of trivial nature it cannot be held that the award is against the public policy. The award could also be set aside if it is so unfair and unreasonable that it shocks the conscious of the court. (e) if it is against the substantive law of India. 10. The Hon'ble Supreme Court has reiterated the same view in the case of Hindustan Zinc Ltd. v. Friends Coal Carbonisation 2006(1) WLC SC) Civil 772 : (2006) 4 SCC 445 . But in the present case it is not the appellant's case that the award is against the "public policy of India". Hence, so far as the present case is concerned, the scope of judicial review would continue to be a limited one. 11. The only issue before this court is whether the learned Sole Arbitrator was justified in granting the escalation price to the respondent on he basis of intra-department correspondence and on the basis of the conduct entered between the appellant and the previous contractor, M/s. Jagdish Prasad Agarwal or not? 12. Every action of the State is legally required to be just, fair and reasonable. This is true not only in the administrative actions, but also in the arena of contract entered by the State in the contractual matter, the State cannot adopt a different yardstick for its actions. Thus, even in contractual natter, the State is legally bound to be just, fair and reasonable. This is true not only in the administrative actions, but also in the arena of contract entered by the State in the contractual matter, the State cannot adopt a different yardstick for its actions. Thus, even in contractual natter, the State is legally bound to be just, fair and reasonable. In the present case, the appellant had requested the respondent to complete the ,remaining part of the bypass on the same terms and conditions as were applicable to the previous contractor, M/s. Jagdish Prasad Agarwal. Admittedly, the said contract contained a clause with regard to the escalation price. Thus, the appellant was bound to adhere to the said clause even with regard to the present respondent. It is also an admitted fact that while accepting the offer of the appellant, the respondent had also insisted that the escalation price should be granted to it as was applicable to M/s. Jagdish Prasad Agrawal. The appellant accepted the same counter offer. According to the note-sheet of the Department, once the Department has accepted the offer made by the respondent, the respondent being an instrumentality of the State cannot be permitted to wriggle out of its contractual obligations. Thus, the learned Sole Arbitrator had validly directed the escalation amount to be paid to the respondent. 13. It is, indeed, a settled proposition of law that interpretation of contract even if erroneously done by the Sole Arbitrator cannot disturbed by the court. Moreover, where two interpretations are possible, the court is not permitted to substitute its interpretation in place of the Sole Arbitrator. Therefore, this court would refrain from disturbing the decision of the learned Sole Arbitrator on the point of payment of escalation price. Since the learned Judge has legally and validly upheld the award, this court is not inclined to Interfere with the same. 14. In the result, there is no merit in the appeal. It is hereby dismissed.Appeal dismissed. *******