ORDER (Per V.V.S.Rao, J.) The two civil miscellaneous appeals and civil revision petition are filed against the common order dated 06.2.2001 in o.p. Nos.382 and 459 of 1994. The work of construction of building for library was entrusted by asmania University (OU) to Sri K.Niranjan (hereafter called, Contractor) The disputes arose out of the contract works and the matter was referred to a sole arbitrator who passed reasoned award on 15.6.1994. The contractor filed a petition under Section 17 of Arbitration Act 1940 (the Act, for brevity), to make award rule of the Court and au filed another petition under Sections 30 and 33 of the Act to set aside the award. By impugned judgment, the Court below confirmed the award except claim No.2, and therefore, au as well as the contractor are in appeal before this Court. The details are as follows. Sl. O.P. Number CMA/CRP No. Appellant/Petitioner No. 1. O.P.No.372 of 1994 CMA No.53 of 2002 K. Niranjan 2. O.P.No.459 of 1994 CMA No.854 of 2008 The Vice Chancellor, Osmania University and another 3. O.P.No.459 of 1994 CRP No.2437 of 2004 K.Niranjan 2. OU entered into agreement dated 06.10.1978 for awarding the contract at an estimated cost of Rs.26,74,116/- for construction of library building at au campus. The site was handed over on 19.11.1978. The work is to be completed within nine months after handing over of the site. Under the agreement, au agreed to supply cement for the works. Both the parties blamed each other for slow progress. OU granted extension of time in two spells upto 31.1.1990 and upto 21.8.1990 and allowed the contractor to complete the work. The work was completed on 31.5.1990 and building was handed over on 31.7.1990. The Earnest Money Deposit and security deposit were returned and the final bill was allegedly paid. During the course of execution, disputes arose and the contractor after unsuccessfully requesting au for appointment of arbitrator, filed O.P.No.165 of 1992. A retired Chief Engineer was appointed as arbitrator by V Additional Judge, City Civil Court, Hyderabad. The arbitrator entered reference on 18.10.1993 and issued notice to parties. After receiving notice, the contractor raised six claims. The same was opposed by OU by filing rebuttal statements. On consideration of the rival positions, the arbitrator passed award partly allowing claim Nos. 1, 2 and 3 and rejecting claim Nos.4, 5 and 6. 3. The arbitrator entered reference on 18.10.1993 and issued notice to parties. After receiving notice, the contractor raised six claims. The same was opposed by OU by filing rebuttal statements. On consideration of the rival positions, the arbitrator passed award partly allowing claim Nos. 1, 2 and 3 and rejecting claim Nos.4, 5 and 6. 3. The OU filed O.P.No.372 of 1994 to set aside the arbitral award dated 15.6.1994 and contractor filed O.P.No.459 of 1994 to make the award rule of the Court. Be it made clear, the contractor did not file any petition to set aside the award insofar as the same rejected claims 4, 5 and 6. As noticed supra, the Court below partly allowed contractors O.P. making the award rule of the court to the extent of claims 1, 2, 3 and 6. The details of claims, arbitral award thereon and relief granted by the Court below are shown in the table below. Claim Claim for Amount Amount Civil Court No. claimed awarded by decree Arbitrator No.1 Payment of Rs.2,55,475 Rs.1,83,465+ Affirmed escalation of steel Interest of Rs.88,477 No.2 Increase in wages, Rs.1,35,000 Rs.1,05,688 Set aside the materials etc., award during extension period No.3 Interest for eight Rs.34,200 Rs.23,123 Affirmed months at 18% per annum No.4 Interest on Rs.18,953 Rejected Affirmed EMD as on September 1991 No.5 Interest on FCD Rs.28,200 Rejected Affirmed Amount No.6 Arbitration costs Rs.5,000 Rs.5,000 Affirmed 4. Insofar as claims 1, 2, 3 and 6 are concerned, au has not filed CRP. The contractor filed CRP and CMA aggrieved by the judgment of civil Court in rejecting the claim No.2 and setting aside the award to that extent. The OU filed CMA No.854 of 2008 against O.P.No.459 of 1994 (which was filed by the contractor to make the award rule of the Court). Having regard to the provisions of Section 17 of the Act, an appeal would not lie against the order of Court making the award rule of the Court. Therefore, in these matters essential question is with regard to the judgment of the Court below setting aside the award of the arbitrator insofar as the claim No.2, which is concerned with escalation charges during the extension period. Indeed learned Counsel for contractor and learned Standing Counsel for au made elaborate submissions touching upon the said question though incidentally other factual disputes are also adverted to. Indeed learned Counsel for contractor and learned Standing Counsel for au made elaborate submissions touching upon the said question though incidentally other factual disputes are also adverted to. In the background of this case as above, we are required to consider the question whether arbitral award is vitiated for the reason that learned arbitrator travelled beyond the scope of contract and awarded escalation charges during extension period. 5. In his claim petition, the contractor made claim No.2, which reads as under. Claim No.2:- Increase in wages, material cost and transportation charges etc., during the extended period of work: . The contractor has to incur additional expenses for the balance of 50% work valuing 13.5 lakhs done during the extended period. On account of the respondents delay there was more than 10% increase in the wages, material cost, transportation charges etc. As such a sum of Rs.1,35,000/- is due and payable with interest on this account. 6. In their rebuttal statement, au opposed claim No.2, which reads as under. Objection with regard to claim No.2: The contractor/ claimant had claimed an amount of Rs.1,35,000/- stated to have been incurred by him additionally on the work during the extended period on account of increase in wages, costs of materials and transportation charges etc. In this regard, it is submitted that the claim of the claimant is not justified in view of the clause 59 of PS to APSS (B-17) and also as per clause 3.27 of the agreement any claims due to variation in the prices of any materials or articles including petrol, diesel, grease, etc., or due to any other accounts will not be entertained. Hence this claim is not tenable. In fact the claimant did not produce any evidence as such about any excavation in the price of any commodity. The effect of escalation in prices if any is clearly on account of delay and negligence on the part of contractor/claimant. 7. The contractor submits that notwithstanding clause 59 of Preliminary Specifications (PS) in the Andhra Pradesh Detailed Standard Specifications (APDSS) (marked as EX.B17 before the arbitrator) and also as per clause 3.27 of the agreement, the contractor is entitled towards increase in wages, material costs and transportation charges during the extended period. This is refuted by learned Standing Counsel for OU. 8. This is refuted by learned Standing Counsel for OU. 8. There is no dispute that the contractor procured the work under agreement No.270/ 1988-89, dated 06.10.1988 at an estimated cost of Rs.26,74,1l6/-. The period of completion of work is three months from the date of handing over of the site. Clause 2.01 of the agreement provided that, "all the quoted rates will hold good till completion of the work even if extension of contract period granted by University Engineer subject to clause 3.11". Further clause 3.27 is to the following effect. "claims due to variation in prices of any material or articles including the petrol, diesel, grease, etc., or due to any other account will not be entertained." 9. As per the contract, work is to be I completed by August 1989. It was not done. On 01.4.1989, contractor addressed a letter giving the following reasons for delay in progress of the work. (i) In 25 column pits hard rock is met with and Deputy Commissioner of Police permitted to do blasting work only between 4.00 am to 6.00 am and because of the time restriction, it took two months to complete excavation work. (ii) Due to power cu t by the Government, material could not be provided for RCC work in time. (iii) There was abnormal increase in prices of steel. (iv) There were restrictions imposed by Traffic police on movement of vehicles. 10. The au granted extension of time vide letter of Deputy Executive Engineer dated 08.3.1989 but the work was not completed again. The said officer also addressed letters on 18.3.1989, 05.4.1989, 08.6.1989, 04.8.1989 pointing out that only 50% value of the work was completed by the end of July and entire work was to be completed by 18.8.1989. On 12.2.1990 yet another letter was sent by the contractor alleging delay on the part of au in giving mark out for toilets, giving colour choice for entire building, not making cement available from 05.2.1990 and that doors and window shutters costing about Rs.2,00,000/were kept aside for non-payment of advance. The au sent letter refuting these allegations on 20.3.1990. Ultimately the work was completed by July 1990 about one year after due date. The contractor then sent notice raising claims, in vain. The au sent letter refuting these allegations on 20.3.1990. Ultimately the work was completed by July 1990 about one year after due date. The contractor then sent notice raising claims, in vain. He filed O.P.No.165 of 1992 for appointment of sole arbitrator and the same was allowed by Court of V Additional Judge on 12.8.1993 appointing a retired Chief Engineer of R&B Department, as arbitrator. As noticed supra, arbitral tribunal allowed claim No.2 to a tune of Rs.1,05,678/- being 10% of the value of the work done beyond the agreement. While allowing the claims, the arbitrator observed that au committed breach of contract in many ways and that there is no clause in the agreement disentitling the contractor for escalation in prices. 11. Whether the arbitral tribunal exceeded jurisdiction and travelled beyond the contract and whether interpretation of clause 3.27 of agreement read with clause 59 of APDSS by arbitral tribunal• is erroneous. 12. Be it noted that as per clause 3.02 of Conditions of Contract, the contract work will be carried out in accordance with APDSS. Therefore clause 59 of APDSS becomes relevant and it reads as under. P.S.59. Delays and extension of time : No claim for compensation on account of delays or hindrances to the work from any cause whatever shall lie, except, as hereinafter defined. Reasonable extension of time will be allowed by the Executive Engineer or by the officer competent to sanction the extension for unavoidable delays, such as may result from causes, which, in the opinion of the Executive Engineer, the undoubtedly beyond the control of the contractor. The Executive Engineer shall assess the period of delay or hindrance caused by any written instructions issued by him, at twenty five per cent in excess of the actual working period so lost. In the event of the Executive Engineer failing to issue necessary instructions and thereby causing delay and hindrance to the contractor, the latter shall have the right to claim an assessment of such delay by the Superintending Engineer of the Circle whose decision will be final and binding. The contractor shall lodge in writing with the Executive Engineer a statement of claim for any delay or hindrance referred to above, within fourteen days from its commencement, otherwise no extension of time will be allowed. The contractor shall lodge in writing with the Executive Engineer a statement of claim for any delay or hindrance referred to above, within fourteen days from its commencement, otherwise no extension of time will be allowed. Whenever authorized alterations or additions made during the progress of the work are of such a nature in the opinion of the Executive Engineer as to justify an extension of time in consequence thereof, such extension will be granted in writing by the Executive Engineer or other competent authority when ordering such alterations or additions. (Emphasis supplied) 13. The above clause is self-explanatory and does not require analysis. Ascribing ordinary meaning to the terminology used in clause 59, it becomes clear that whenever reasonable extension of time is granted, the contractor shall have no claim for compensation on account of delays or hindrances to work from any cause. It cannot be ignored that, "delay or hindrance to the work from any cause whatever" should be given broad meaning and the contractor who willingly accepts to do the work cannot be allowed to turn around and plead anything contrary to clause 59. This is made clear by clause 60, which is to the effect that the time shall be considered as essence of the• contract, and it is always open to the Executive Engineer to advise the contractor in writing to adhere to rate of progress and demand compliance. If the contractor neglects to comply with such demand, it shall be lawful for Executive Engineer even to determine the contract. Therefore, the contractor cannot ignore the advice given by the Executive Engineer under clause 60 and complete the work beyond stipulated time and claim compensation on the ground that there are abundant causes for delay in the work. 14. The question whether a building contractor can seek extension of time and claim compensation by way of escalation during the period of extension has been subject matter of various decisions of this Court as well as Supreme Court. These primarily deal with the effect and purpose of clause 59 and there are also decisions, which deal with other clauses similar to clause 59. We will deal with these decisions one after the other. 15. These primarily deal with the effect and purpose of clause 59 and there are also decisions, which deal with other clauses similar to clause 59. We will deal with these decisions one after the other. 15. In Alopi Parshad and Sons Ltd. v. Union of India (1) AIR 1960 SC 588 = 1960 (2) SCR 793 , appellant was awarded contract for purchasing ghee required for the use of Army personnel. Under clause 12 of the agreement, Government agreed to pay the rates specified but during World War-II, there was enormous increase in the demand by Government. The original agreement regarding remuneration was revised. Thereafter, agents demanded enhanced remuneration, establishment and contingency charges. The Government terminated the agreement. To resolve the dispute, arbitration was initiated. Four claims were raised. The arbitrators did not agree on the decision and the matter went to Umpire, who came to the view that the agreement was valid and that claim No.1 is untenable, claims 2 and 3 did not arise out of agreement, and claim No.4 was outside the scope of the agreement. The award was filed in the Court of Subordinate Judge, Delhi. The suppliers prayed to set aside the award on the ground that the umpire was guilty of misconduct. The Subordinate Judge held that umpire was in error in not considering claims 3 and 4. He also held that award was vitiated on account of misconduct, in that, suppliers were not allowed sufficient opportunity. The matter went before the High Court of East Punjab, which confirmed the order passed by the Court of Subordinate Judge. Letters Patent Appeal was also dismissed. In the meanwhile, the suppliers requested Government of India for fresh arbitration. Accordingly the matter was again referred to arbitration. An award was passed for an amount of about Rs.13,00,000/- with future interest. The application of Government of India under Sections 30 and 33 of Arbitration Act was rejected. The High Court reversed the order passed by the Subordinate Judge and set aside the award, observing that the arbitrator cannot decide the disputes outside the scope of the agreement. Referring to Hirji Muljiv. Cheong Yue Steamship Co. Ltd. (2) (1926) AC 497, Constantine Steamship Line Ltd v. Imperial Smelting Corporation Ltd. (3) (1942) AC 154 and British Movietonews Ld. v. London and District Cinemas Ld. (4) (1952) AC 166, it is held thus. Referring to Hirji Muljiv. Cheong Yue Steamship Co. Ltd. (2) (1926) AC 497, Constantine Steamship Line Ltd v. Imperial Smelting Corporation Ltd. (3) (1942) AC 154 and British Movietonews Ld. v. London and District Cinemas Ld. (4) (1952) AC 166, it is held thus. The Indian 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 events 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. Yet, this does not in itself affect the bargain they have made. If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing when it was made, shows that they never agreed to be bound in a fundamentally different situation which has now unexpectedly emerged, the contract ceases to bind at that point - not because the court in its discretion thinks it just and reasonable to qualify the terms of the contract, but because on its true sonstruction it does not apply in that situation. When it is said that in such circumstances the court reaches a conclusion which is just and reasonable or one which justice demands, this result is arrived at by putting a just construction upon the contract in accordance with an implication ... from the presumed common intention of the parties." (Emphasis supplied) 16. In Continental Construction Co. Ltd. v State of M.P. (5) (1988) 3 SCC 82 = AIR 1988 SC 1166 , the contract for construction of bund of masonary dam of Tawa project was entrusted to Continental. The contract could not be completed within stipulated time. An unforeseen expenditure of about Rs.5,00,000/- was incurred. When approached, Superintending Engineer refused to refer the matter to arbitration. The District Court appointed a retired Chief Engineer as arbitrator. An award was passed partly allowing the claim. The District Judge made the award rule of the Court, aggrieved by which, appeal was filed. An unforeseen expenditure of about Rs.5,00,000/- was incurred. When approached, Superintending Engineer refused to refer the matter to arbitration. The District Court appointed a retired Chief Engineer as arbitrator. An award was passed partly allowing the claim. The District Judge made the award rule of the Court, aggrieved by which, appeal was filed. The High Court of Madhya Pradesh allowed the appeal and remanded the matter to District Court, who set aside the award. High Court dismissed appeal mainly on the ground that clause 3.3.15 disentitles the contractor to any compensation and that even if there is extension of time for completion of contract, no compensation can be claimed. The relevant clause read that, "under no circumstances whatever shall the contractor be entitled to any compensation from government on any account unless the contractor shall have submitted claim in writing to the Engineer-in -Charge within one month of the cause of such claim occurring." In appeal, the apex Court while holding that the contractor was not entitled to claim extra costs towards rise in prices of material and labour in the extended period observed thus. If no specific question of law is referred, 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. 17. In State of Andhra Pradesh v. M/s. Associated Engineering Enterprises, Hyderabad (6) AIR 1990 AP 294 , a Division Bench of this Court consisting Honble Jeevan Reddy and Neeladri Rao, JJ, (as their Lordships then were) considered clause 59 of APDSS and its binding nature on arbitrator. 17. In State of Andhra Pradesh v. M/s. Associated Engineering Enterprises, Hyderabad (6) AIR 1990 AP 294 , a Division Bench of this Court consisting Honble Jeevan Reddy and Neeladri Rao, JJ, (as their Lordships then were) considered clause 59 of APDSS and its binding nature on arbitrator. Referring to Section 55 of Indian Contract Act, 1972, the Division Bench held that in view of the bar created by clause 59, arbitrator had no power to award compensation for the delay in handing over of site to the contractor. Reliance was placed on an unreported judgment dated 19.4.1992 in AAO No.677 of 1991 and CRP No.385 of 1992 wherein it is laid down as under. We find it difficult, therefore, to say that clause 59 has no application to the present case. The words "from any cause whatever", occurring in clause 59, are wide enough to take in delays and hindrances of all types, caused by the department, or arising from other reasons, as the case may be. Thus, by virtue of clause 59, the contractor is precluded from claiming any compensation on account of delays or hindrances arising from any cause whatever, including those arising on account of the acts or omissions of the departmental authorities....... (Emphasis supplied) 18. The Division Bench then referred to decision of Privy Council in Champsey Bhara and Co., v Jivraj Balloo Spinning and Weaving Co. Ltd. (7) AIR 1923 PC 66 and laid down as below. Applying the principle of the above decision to the facts of the case before us, it must be held that clause 59 bars a claim for compensation on account of any delays or hindrances caused by the department. In such a case, the contractor is entitled only to extension of the period of contract. Indeed, such an extension was asked for, and granted on more than one occasion. (The penalty levied for completing the work beyond the extended period of contract has been waived in this case). The contract was not avoided by the contractor, but he chose to complete the work within the extended time. In such a case, the claim for compensation is clearly barred by clause 59 -of the APDSS which is admittedly, a term of the agreement between the parties. (Emphasis supplied) 19. In Associated Engineering Co. The contract was not avoided by the contractor, but he chose to complete the work within the extended time. In such a case, the claim for compensation is clearly barred by clause 59 -of the APDSS which is admittedly, a term of the agreement between the parties. (Emphasis supplied) 19. In Associated Engineering Co. v. Government of Andhra Pradesh (8) (1991) 4 SCC 93 = AIR 1992 SC 232 in the execution of contract for cement concrete lining in connection with Nagarjuna Sagar dam disputes arose between the contractor and company. Fifteen claims were raised including escalation, extra expenditure and extra lead for water. The arbitrator passed award in respect of claim No. III dealing with escalation of cost of material, payment of extra lead for water and extra expenditure for flattening canal slopes. The award was made rule of the Court. This Court however set aside decree in respect of claims 3, 6 and 9. A contention was raised before the Supreme Court that the arbitrator exceeded the terms of the contract and travelled beyond the same. There was no clause in the contract for payment of any amount towards escalation. In this background, Supreme Court came to the conclusion that the arbitrator travelled beyond the terms of the contract and thereby acted arbitrarily, irrationally and capriciously. The relevant observations in the judgment are as follows. The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function 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 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. ... ... ... 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 & Boyds Commercial Arbitration, Second Edition, p.641). He commits misconduct if by his award he decides matters excluded by the agreement (see Halsburys Laws of England, Volume II, Fourth Edition, Para 622). He commits misconduct if by his award he decides matters excluded by the agreement (see Halsburys Laws of England, Volume II, Fourth Edition, Para 622). A deliberate departure from contract amounts to not only manifest disregard 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. (Emphasis supplied) 20. In New India Civil Erectors (P) Ltd., v. Oil and Natural Gas Corpn. (9) (1997) 11 SCC 75 = AIR 1997 SC 980 = 1997 (2) ALT 20 (DN), ONGC employed contractor for construction of 304 pre fabricated houses. The work was not completed within the extended period. The contract was terminated, which lead to disputes being referred to joint arbitrators. They passed award holding that the contractor is entitled to about Rs.1,00,00,000/- and that ONCC is entitled to about Rs.41,00,000/-. There were petitions in the Civil Court to set aside award and to make the award rule of the Court. The award was made rule of the Court. But before the Civil Court, ONCC partly succeeded. Claim No.6 was in relation to the dispute with regard to method of measuring the constructed area. According to ONCC, area covered by balconies cannot be reckoned with. This plea was rejected by the arbitrator but upheld by the High Court. Before the Supreme Court, the question was whether the arbitrators correctly construed the relevant stipulation in the tender notice with regard to exclusion of balconies for the periods of payment. While holding that, "it is axiomatic. that the arbitrator being a creature of the agreement, must operate within the four corners of the agreement and cannot travel beyond it. More particularly, he cannot award any amount which is ruled out or prohibited by the terms of the agreement", the Supreme Court rejected the contention of contractor observing as under: The above stipulation clearly says that total built-up area of a floor shall include the staircase and the common corridor but shall exclude balconies. It expressly provides that "work should be measured on the built-up area excluding balcony area". It is undisputed that in the plan of flats attached to the Tender Notice, balconies are provided. ... ... ... It expressly provides that "work should be measured on the built-up area excluding balcony area". It is undisputed that in the plan of flats attached to the Tender Notice, balconies are provided. ... ... ... The appellant could not have constructed flats except in accordance with the plans attached to the Tender Notice, unless of course there was a mutually agreed modified plan later - and there is none in this case. We cannot, therefore, entertain the contention at this stage that there are no balconies at all in the flats constructed and that, therefore, the aforesaid stipulation has no relevance. We must proceed on the assumption that the plans attached to the Tender Notice are the agreed plans and that construction has been made according to them and that in the light of the agreed stipulation referred to above, the areas covered by balconies should be excluded. In this view of the matter we agree with the Division Bench that the arbitrators overstepped their authority by including the area of the balconies in the measurement of the built-up area. 21. In Rajasthan State Mines and Minerals Ltd. v. Eastern Engg. Enterprises (10) (1999) 9 SCC 283 = AIR 1999 SC 3627 = 2000 (2) ALT 4.2 (DNSC), respondent was awarded turnkey project for excavation, removal, transportation of over-burden in the mining of rock phosphate ore, for a period of three years at a fixed rate of Rs.35.80 ps for cubic c meter. In September 1983, Eastern Engineering raised dispute for additional payment and/or compensation on account of escalation of cost of work and breach of contract by RSMML. The claim was denied. The CMD of Bihar State Mineral Development Corporation Ltd was appointed as sole arbitrator, "to decide all claims raised by the contractor". The final award was passed in February 1986 awarding Rs.1.07 crare to contractor, which included increase in rates for excavation, use of high explosives, loss due to non-availability of explosives, additional costs for mining etc. In the challenge of award before the District Judge, the core question was whether arbitrator correctly construed clauses 17 and 18 of the agreement. These clauses provide for blasting operations and remuneration for works under the contract. In the challenge of award before the District Judge, the core question was whether arbitrator correctly construed clauses 17 and 18 of the agreement. These clauses provide for blasting operations and remuneration for works under the contract. According to the said contract, the rates fixed shall remain firm, fixed and binding during the period of agreement till the issue of final certificate irrespective of any fall or rise in the cost of mining operations of the work covered by this contract. The learned District Judge made the award rule of the Court. The order of District Judge was confirmed by the High Court of Rajasthan. The Supreme Court came to the conclusion that there is no question of interpretation of clauses 17 and 18 as they are clearly unambiguous and that the contractor is not entitled or justified in raising any claim because of increase of costs and expenses and that the arbitrator traveled beyond the jurisdiction in allowing the increased rates. The relevant observations are as follows. It is both, in positive and negative terms by providing that the contractor shall be paid rates as fixed and that he shall not be entitled to extra payment or further payment for any ground whatsoever except as mentioned therein. The rates agreed were firm, fixed and binding irrespective of any fall or rise in the cost of the work covered by the contract or for any other reason or any ground whatsoever. It is specifically agreed that the contractor will not be entitled or justified in raising any claim or dispute because of increase in cost of expenses on any ground whatsoever. By ignoring the said terms, the arbitrator has travelled beyond his jurisdiction as his existence depends upon the agreement and his function is to act within the limits of the said agreement. This deliberate departure from the contract amounts not only to milnifest disregard of the authority or misconduct on his part but II may tantamount to mala fide action. ... ... ... It is settled law that the arbitrator is the creature of the contract between the parties and hence if he ignores the specific terms of the contract, it would be a question of jurisdictional error which could be corrected by the court and for that limited purpose agreement is required to be considered. (Emphasis supplied) 22. ... ... ... It is settled law that the arbitrator is the creature of the contract between the parties and hence if he ignores the specific terms of the contract, it would be a question of jurisdictional error which could be corrected by the court and for that limited purpose agreement is required to be considered. (Emphasis supplied) 22. The Supreme Court also laid down the following principles that should govern the case to set aside the arbitration award. (a) It is not open to the court to speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. (b) It is not open to the court to admit to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award. (c) If the arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the court cannot interfere. (d) If no specific question of law is referred, 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. In a case where a specific question of law touching upon the jurisdiction of the arbitrator was referred for the decision of the arbitrator by the parties, then the finding of the arbitrator on the said question between the parties may be binding. (e) In a case of a non-speaking award, the jurisdiction of the court is limited. The award can be set aside if the arbitrator acts beyond his jurisdiction. (f) To find out whether the arbitrator has travelled beyond his jurisdiction, it would be necessary to consider the agreement between the parties containing the arbitration clause. The arbitrator acting beyond his jurisdiction is a different ground from the error apparent on the face of the award. (g) In order to determine whether the arbitrator has acted in excess of his jurisdiction what has to be seen is whether the claimant could raise a particular claim before the arbitrator. The arbitrator acting beyond his jurisdiction is a different ground from the error apparent on the face of the award. (g) In order to determine whether the arbitrator has acted in excess of his jurisdiction what has to be seen is whether the claimant could raise a particular claim before the arbitrator. If there is a specific term in the contract or the law which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or there is a specific bar in the contract to the raising of the particular claim then the award passed by the arbitrator in respect thereof would be in excess of jurisdiction. (h) The award made by the arbitrator disregarding the terms of the reference or the arbitration agreement or the terms of the contract would be a jurisdictional error which requires ultimately to be decided by the court. He cannot award an amount which is ruled out or prohibited by the terms of the agreement. Because of a specific bar stipulated by the parties in the agreement, that claim could not be raised. Even if it is raised and referred to arbitration because of a wider arbitration clause such claim amount cannot be awarded as the agreement is binding between the parties and the arbitrator has to adjudicate as per the agreement. (i) The arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract. A deliberate departure or conscious disregard of the contract not only manifests the disregard of his authority or misconduct on his part but it may tantamount to mala fide action. (j) The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and reasonable; the arbitrator is a tribunal selected by the parties to decide the disputes according to law. 23. In Ch. Ramalinga Reddy v. Superintending Engineer (11) (1999) 9 SCC 610 , clause 59 of APDSS fell for consideration. In that case, disputes arose in relation to contract for excavation of irrigational canal disputes arose. The matter was referred to arbitration before whom the contractor raised 14 claims. An award was passed for an amount of Rs.50,89,342/-. The same was made rule of the Court. In that case, disputes arose in relation to contract for excavation of irrigational canal disputes arose. The matter was referred to arbitration before whom the contractor raised 14 claims. An award was passed for an amount of Rs.50,89,342/-. The same was made rule of the Court. The High Court however set aside the award in respect of claims 2, 3, 7, 8 and 12 and modified award in respect of claims 5, 6, 13 and 14. Before the Supreme Court, it was contended that the award was vitiated with regard to certain claims, in• that arbitrator did not allow extra rate for excavation of rocks, did not allow claim for payment of idle labour charges and also did not allow claim for loss sustained due to arranging of wagons. The contractor relied on P.M.Paul v. Union of India (12) 1989 Supp (1) SCC 368 in support of the contention that contractor would be entitled for compensation and extra costs during the extended period of the contract. Distinguishing the same, Supreme Court, confirmed High Court. The relevant observations are as follows. Clause 59 of the A.P. Standard Specifications, which applied to the contract between the parties, stated that no claim for compensation on account of delays or hindrances to the work from any cause would lie except as therein defined. The claim falls outside the defined exceptions. When extensions of time were granted to the appellant to complete the work, the respondents made it clear that no claim for compensation would lie. On both counts, therefore, Claim 8 was impermissible and the High Court was right in so holding. Learned counsel for the appellant drew our attention to the judgment of this Court in P.M. Paul v. Union of India, 1989 Supp (1) SCC 368. The disputes that were there referred to the arbitrator were: who was responsible for the delay in completion of the building contracted for, what were the repercussions of such delay and how the consequences of the responsibility were to be apportioned. The disputes that were there referred to the arbitrator were: who was responsible for the delay in completion of the building contracted for, what were the repercussions of such delay and how the consequences of the responsibility were to be apportioned. After discussing the evidence and the submissions of the parties, the arbitrator found that there was escalation and that it was, therefore, reasonable to allow compensation on account of losses under the first claim, which was "on account of losses caused due to increase in prices of materials and cost of labour and transport during the extended period of contract....” In this context, this Court said that once it was found that the arbitrator had jurisdiction to hold that there was delay in the execution of the contract due to the conduct of the respondent, the respondent was liable for the consequences of the delay, namely, increase in prices. There was in P.M. Paul case (supra) no clause in the contract, which provided that the respondent would not be liable to pay compensation on account of delay in the work from any cause nor was it stipulated, when extension of time was granted to the appellant to complete the work, that no claim for compensation would lie. (Emphasis supplied) 24. In Steel Authority of India Ltd. v. J.C. Budharaja, Govt. and Mining Contractor (13) (1999) 8 SCC 122 = AIR 1999 SC 3275 , respondent obtained a contract for construction of tailing-cum-storage reservoir at iron ore project of the appellant. The contract has to be completed within a period of two years. Clause 5 (vi) of General Conditions of Contract (GCC) provided as follows: "Failure or delay by the Corporation to hand over to the Contractor possession of the lands necessary for the execution of the work, or to give the necessary drawings, instructions or any other delay by the Corporation which due to any other cause whatsoever shall in no way affect or vitiate the contract or alter the character therefor entitle the Con tractor to damage or compensation therefor provided that the Corporation may extend the time for completion of the work by such period as it may consider necessary and proper." Clause 32 was to the following effect: "Site for execution of work will be available as soon as the work is awarded. In case it is not possible for the Corporation to make the entire site available on the award of work the Contractor will have to arrange his working programme accordingly. No claim whatsoever for not giving the entire site on award of work and for giving the site gradually will be tenable." The contractor after contract period, raised a claim of about Rs.18,00,000/- as damages for delay in handing over work sites. On reference, the arbitrators gave award with modification with regard to interest. SAIL was unsuccessful before High Court. Before the Supreme Court, it was contended that the award is without jurisdiction. Accepting the plea of SAIL, the apex Court relied on clause 32 of the contract and clause 5 (vi) of GCC and observed as under. Clause 32 of the agreement specifically stipulates that no claim whatsoever for not giving the entire site on award of work and for giving the site gradually will be tenable and the Contractor is required to arrange his working programme accordingly. Clause 39 further stipulates that no failure or omission to carry out the provisions of the contract shall give 1f rise to any claim by the Corporation and the Contractor, one against the other, if such failure or omission arises from compliance with any statute or regulation of the Government or other reasons beyond the control of either the Corporation or the Contractor. Obtaining permission from the Forest Department to carry out the work in the wildlife sanctuary depends on statutory regulations. Clause (vi) of the general conditions of the contract also provides that failure or delay by the Corporation to hand over to the Contractor possession of the lands necessary for the execution of the work or any other delay by the Corporation due to any other cause whatsoever would not entitle the Contractor to damage .or compensation thereof; in such cases, the only duty of the Corporation was to extend the time for completion of the work by such period as it may think necessary and proper. These conditions specifically prohibit granting claim for damages for the breaches mentioned therein. It was not open to the arbitrator to ignore the said conditions which are binding on the contracting parties. By ignoring the same, he has acted beyond the jurisdiction conferred upon him. These conditions specifically prohibit granting claim for damages for the breaches mentioned therein. It was not open to the arbitrator to ignore the said conditions which are binding on the contracting parties. By ignoring the same, he has acted beyond the jurisdiction conferred upon him. It is settled law that the arbitrator derives the authority from the contract and if he acts in manifest disregard of the contract, the award given by him would be an arbitrary one. This deliberate departure from the contract amounts not only to manifest disregard of the authority or misconduct on his part, but it may tantamount to mala fide action. (Emphasis supplied) 25. In Ramachandra Reddy and Co. v. State of A.P. (14) (2001) 4 SCC 241 = AIR 2001 SC 1523 , the Supreme Court reiterated that grant of extension of time for completion of the contract will not in any way make the contractor eligible for any extra claim due to escalation in rates and materials or due to any other reasons under any circumstances. In the said case, the contractor claimed separate rate for extra excavation of hard rock in the excavation work of approach canal of Sri sail am Project, in spite of the fact that the Government made payment in terms of clause 25 of Schedule-C of Section 2 of the agreement. The arbitrator did not allow the claim but the civil Court allowed such claim, which was set aside by this Court referring to clause 59 of APDSS. The Supreme Court referred to Ch. Ramalillga Reddy (11 supra) and reiterated as follows. Then again the question of granting a higher rate for any extra quantity of work executed by the contractor would at all arise only when the contract provides for such escalated rate either expressly or by implication as in the case of S. Harcharan Singh, (1990) 4 SCC 647 , where the competent authority had agreed for the same by correspondence. But in the case in hand, when there is no such acceptance by the competent authority, and there is no provision in the contract, permitting such escalated rate for the additional quantity of excavation made and in view of our rejecting the contention raised on the basis of clause 63, the conclusion is irresistible that the contractor will not be entitled to a higher rate for the additional excavation work and as such the High Court was fully justified in setting aside the direction of the trial Judge, remitting Claim Item 1 for reconsideration and we see no infirmity with the said direction of the High Court to be interfered with. We also find sufficient force in the submission of Ms Amareswari, relying upon the letters of the competent authority, specifically intimating that the grant of extension of time will not in any way make the contractor eligible far any extra claim due to. Escalation in rates of labour and materials or due to any other reasons under any circumstances and the decision of this Court in Ramalinga Reddy, (1999) 9 SCC 610 , supports the aforesaid contention. 26. In General Manager, Northern Railway v. Sarvesh Chopra (15) (2002) 4 SCC 45 = AIR 2002 SC 1272 = 2002 (2) ALT 1.1 (DNSC), work of construction and widening of a railway bridge was entrusted to respondent. The disputes, which arose in relation thereto with reference to six claims of contractor, were sought to be referred to arbitrator. A single Judge of Delhi High Court referred two claims to arbitration holding that four claims being "excepted matters" within the meaning of clause 63 of GCC, were not liable to be referred to arbitration. The Division Bench however disagreed and referred the matters to arbitrator. The Supreme Court speaking about the scope of clause disentitling the contractor far any compensation, as follows. Each of these clauses provides far such claims being not capable of being raised or adjudged by employing such phraseology as "shall not be payable", "no. claim whatsoever will be entertained by the Railways", or "no. claim will/shall be entertained". These are "no. claim", "no. damage", or "no. liability" clauses. The other category of claims is where the dispute or difference has to be determined by an authority of the Railways as provided in the relevant clause. claim whatsoever will be entertained by the Railways", or "no. claim will/shall be entertained". These are "no. claim", "no. damage", or "no. liability" clauses. The other category of claims is where the dispute or difference has to be determined by an authority of the Railways as provided in the relevant clause. In such other category fall such claims as were read out by the learned counsel far the respondent by way of illustration from several clauses of the can tract such as General Conditions Clause 18 and Special Conditions Clauses 2.4.2(b) and 12.1.2. The first category is an "excepted matter" because the claim as per the terms and conditions of the contract is simply not entertainable; the second category of claims falls within" excepted matters" because the claim is liable to be adjudicated upon by an authority of the Railways whose decision the parties have, under the contract, agreed to treat as final and binding and hence not arbitrable. The expression" and decision thereon shall be final and binding on the contractor" as occurring in clause 63 refers to the second category of" excepted matters". (Emphasis supplied) 27. The Supreme Court also approved the decision of Division Bench of this Court in Associated Engineering Enterprises Hyderabad (supra) and observed as under. In Ch. Ramalinga Reddy v. Superintending Engineer, (1999) 9 SCC 610 , claim was allowed by the arbitrator for "payment of extra rates for work done beyond agreement time at schedule of rate prevailing at the time of execution". Clause 59 of the A.P. Standard Specifications, which applied to the contract between the parties, stated that no claim for compensation on account of delays or hindrances to the work from any cause would lie except as therein defined. The claim was found to be outside the defined exceptions. When extensions of time were granted to the appellant to complete the work the respondents made it clear that no claim for compensation would lie. For both these reasons, this Court held that it was impermissible to award such claim because the arbitrator was required to decide the claims referred to him having regard to the contract between the parties and, therefore, his jurisdiction was limited by the terms of the contract. ... ... ... A Division Bench decision of the High Court of Andhra Pradesh in State of A.P. v. Associated Engineering Enterprises, Hyderabad, (1991) 4 SCC 93 (sic. ... ... ... A Division Bench decision of the High Court of Andhra Pradesh in State of A.P. v. Associated Engineering Enterprises, Hyderabad, (1991) 4 SCC 93 (sic. AIR 1990 A.P. 294 ), is of relevance. Jeevan Reddy, J. (as His Lordship then was), speaking for the Division Bench, held that where clause 59 of the standard terms and conditions of the contract provided that neither party to the contract shall claim compensation "on account of delays or hindrances to the work from any cause whatever", an award given by an arbitrator ignoring such express terms of the contract was bad. We find ourselves in agreement with the view so taken. (Emphasis supplied) 28. In Ramanath International Construction (P) Ltd. v. Union of India (16) (2007) 2 SCC 453 = AIR 2007 SC 509 the Government of India awarded the contract of construction of aircraft hangar, airtech hangar and connected works as well as road works to the appellant. Disputes in the execution of contract were referred to arbitrator, who passed awards. On appropriate applications, learned single Judge rejected the cases to set aside and made awards rule of the Court. Division Bench partly allowed appeals of Government, aggrieved by which, the contractor filed appeals before Supreme Court. Clause 11 (c) of the contract provided that no claim in respect of compensation or otherwise, howsoever arisen, as a result of extensions granted shall be admitted. One of the questions before Supreme Court was whether arbitrator committed legal misconduct in ignoring clause l1(c). Answering the question in the affirmative, apex Court dismissed appeals placing reliance on Ch. Ramalinga Reddy (11 supra) and Associated Engineering Enterprises (6 supra) and observing as under. Clause (C) provides that where extensions have been granted by Deputy Inspector General of : (Ghularn Moha opposed the claim in their counter statement placing reliance on condition No.3.27 of the agreement and clause 59 of APDSS, which admittedly applies in the execution of the contract works in view of condition No.3.02 (which is to the effect that work will be carried out in accordance with APDSS). When both the clauses bar the claim due to variation in the prices of material or articles and due to any other account, compensation cannot be claimed. The arbitrator certainly committed error and acted beyond terms of the contract in allowing claim No.2. When both the clauses bar the claim due to variation in the prices of material or articles and due to any other account, compensation cannot be claimed. The arbitrator certainly committed error and acted beyond terms of the contract in allowing claim No.2. The Court below was therefore correct in setting aside claim No.2 where under arbitrator awarded Rs.1,05,688/-Therefore, CRP No.2437 of 2004 and CMA No.53 of 2002 filed by contractor are devoid of any merit and are liable to be dismissed. CMA No.854 of 2008 filed by OU against the order of Court below insofar as it made the award of arbitrator in respect of claims 1, 3 and 6 is concerned, the same is not maintainable as OU has not filed any revision against that portion of the order where under Court below made the award rule of the Court, insofar as claims 1, 3 and 6 are concerned. 32. Accordingly, CMA No.53 of 2002, CRP No.2437 of 2004 and CMA No.854 of 2008 are dismissed leaving the parties to bear their own costs.