Judgment :- 1. This Original Petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the Award dated 29.12.2008 passed by the second respondent/Arbitrator. 2. The case of the first respondent as claimant before the second respondent Arbitrator is as follows: The petitioner herein is a Public Limited Company incorporated under the Companies Act . The petitioner is carrying on business in the line of manufacturing and marketing of Sugar. The first respondent is a Nodal Agency of Government of India for procuring and supply of agricultural commodities all over India. It is registered under the Multi State Co-operative Societies Act and it is essentially a Farmers Co-operative Society carrying on business of procuring and arranging for exports, imports and distribution of agricultural and allied products in India. 3. In August 2004, the petitioner approached the first respondent to facilitate the import of 40,000 M.Tons of Raw Sugar from Australia, South Africa, Brazil and the said proposal was accepted by the first respondent. A Memorandum of Understanding was entered into between the petitioner and the first respondent on 11.8.2004. As per the Memorandum of Understanding, the petitioner agreed to identify the suppliers through the first respondent for import of Raw Sugar from one of the foreign countries and agreed to finalize the contract with a foreign supplier who was identified by the first respondent. In terms of the Memorandum of Understanding, the first respondent also agreed to furnish an Irrevocable Letter of Credit in favour of the foreign supplier identified by the petitioner for the value of the import. The usuance period for the Letter of Credit would be 360 days. It was further agreed that after finalisation of the contract, the first respondent in turn, would enter into High Seas Sale Agreement for the imported goods with the petitioner to enable him to take delivery of the goods, to process and sell and to realise the sale proceeds. As per the Memorandum of Understanding dated 11.8.2004, to the services rendered by the first respondent, the petitioner agreed to pay service charges of 1% of the import value of the goods. 4. In terms of the Memorandum of Understanding, the supplier for import of Raw Sugar was identified as Cargil International S.A., Switzerland. As per the Memorandum of Understanding dated 11.8.2004, to the services rendered by the first respondent, the petitioner agreed to pay service charges of 1% of the import value of the goods. 4. In terms of the Memorandum of Understanding, the supplier for import of Raw Sugar was identified as Cargil International S.A., Switzerland. As per the Memorandum of Understanding, the petitioner furnished a Bank Guarantee for 10% of the Letter of Credit dated 2.9.2004 for US Dollars 87,14,000 for the import of 40,000 M.Tons of Sugar. The usuance period for the said Letter of Credit though agreed to be 360 days under the Memorandum of Understanding, due to the reluctance of the Bank to furnish a Letter of Credit for the said period, the usuance period was restricted to 180 days in consultation with the petitioner. This is the claim of the first respondent that the usuance period was restricted to 180 days which was also agreed to by the petitioner. However, as per the petitioner, it was not at all agreed to and therefore, the usuance period continued to be 360 days as per the original Memorandum of Understanding. Therefore, the High Seas Sale Agreement dated 23.9.2004 was entered into between the petitioner and the first respondent. The first respondent furnished a Letter of Credit for the value of the consignment, through its bankers, namely the Allahabad Bank and the bank agreed for the usuance period of 180 days only instead of 360 days. The goods were duly imported and delivered to the petitioner and as per the Memorandum of Understanding, it was the obligation on the part of the petitioner to arrange for storage of goods in the Godowns owned by the CWC/SWC. Thereafter, the petitioner had to take delivery, process and to sell the cargo and realise the proceeds within 180 days to meet the Letter of Credit’s commitments on the 180th day. After taking delivery, the petitioner requested the first respondent to role over the Letter of Credit to 360 days. The first respondent took up the issue of role over of the Letter of Credit through its bankers and in spite of the best efforts put in by the first respondent, the bankers declined the petitioner’s request for role over. After taking delivery, the petitioner requested the first respondent to role over the Letter of Credit to 360 days. The first respondent took up the issue of role over of the Letter of Credit through its bankers and in spite of the best efforts put in by the first respondent, the bankers declined the petitioner’s request for role over. Thereafter, the petitioner requested the first respondent to make an investment for the amount of short fall in the payment of the Letter of Credit and the said short fall would carry an interest @ 6% per annum. The petitioner however requested the first respondent to reduce the service charges from 1% to 0.5% in view of the reduced usuance period of the Letter of Credit. The said proposal was accepted by the petitioner and the petitioner invested a sum of Rs. 37,44,12,685/- at the time of retirement of the Letter of Credit on the expiry of the 180th day to make good the total value of the Letter of Credit. At the request of the petitioner, the first respondent arranged for foreign exchange covered to meet the shortfall for retirement of the Letter of Credit of 180 days. The petitioner instead of paying Rs. 1,07,05,000/- towards the 6% interest for the amount funded by the first respondent and a sum of Rs. 18,71,000/- towards the.5% service charges, totalling a sum of Rs. 1,25,76,000/-, paid only a sum of Rs. 37,42,000/- towards the 1% service charge as per the earlier agreement which was subsequently modified in view of the change in the circumstances of the contract. 5 . The first respondent further incurred a sum of Rs. 1,78,670/- towards the Stock Management Charges on account of the petitioner not providing storage of stocks in CWC/SWC Godowns and further incurred a sum of Rs. 27,842/- towards the Tax Deducted at Source (TDS) by the State Bank of India on account of the Fixed Deposits on the Sale Proceeds made by the first respondent on behalf of the petitioner. Therefore, according to the first respondent as claimant, the petitioner is liable to pay a sum of Rs. 92,48,403/- towards the amount invested, service charges and the tax incurred over and above the sums already paid by the petitioner. Therefore, according to the first respondent as claimant, the petitioner is liable to pay a sum of Rs. 92,48,403/- towards the amount invested, service charges and the tax incurred over and above the sums already paid by the petitioner. The first respondent demanded the said amount by issuing a Notice dated 29.6.2006, to which, the petitioner sent a reply on 2.8.2006, denying the first respondent’s claim. Therefore, the arbitration clause was invoked by the first respondent and the second respondent was appointed as the Arbitrator. 6. The case of the petitioner before the second respondent/Arbitrator is as follows: The petitioner accepted the Memorandum of Understanding entered into between the parties on 11.8.2004. As per the MOU, the petitioner had to furnish a Bank Guarantee to the first respondent for the amount equivalent to the 10% of the Letter of Credit value of the Raw Sugar to be imported. It is further stated by the petitioner that, they would not dispute the quality, quantity, etc., and all the terms and conditions of the import shall be binding upon the petitioner and opening up an Irrevocable Letter of Credit of 360 days of usuance period in favour of the overseas suppliers. According to the petitioner, the agreed period for the payment of the sale value is 360 days from the date of invoice. As per the MOU, the petitioner gave a Bank Guarantee to the first respondent in respect of the sale consideration and the term of the Bank Gurantee was for one year. The MOU clearly established that the relationship between the petitioner and the first respondent was that of the Seller-buyer and not that of lender and Borrower. The MOU did not contemplate any financing and the status of the parties is that of Seller-Buyer only. After the execution of the MOU, the first respondent contacted the petitioner and informed that the bank was reluctant to open an Irrevocable Letter of Credit for 360 days at one go and they could open a Letter of Credit initially for a period of 180 days and would renew the same for a like period thereafter. After the execution of the MOU, the first respondent contacted the petitioner and informed that the bank was reluctant to open an Irrevocable Letter of Credit for 360 days at one go and they could open a Letter of Credit initially for a period of 180 days and would renew the same for a like period thereafter. The petitioner did not want to leave a room for doubt and therefore, sent a letter dated 25.8.2004 to the first respondent inviting their attention to the assurances on the usuance period of Letter of Credit wherein the petitioner stated they would be careful, if instructions are issued for opening the Letter of Credit for 180 days with the understanding that the same could be rolled over for another 180 days. The petitioner secured a Bank Guarantee and forwarded the same to the first respondent. The first respondent opened a Letter of Credit for a period of 180 days and the petitioner was not at all comfortable with the said Letter of Credit. The petitioner therefore sent a letter dated 14.9.2004 to the first respondent wherein they have referred to the specific term of the contract providing 360 days usuance period of Letter of Credit in favour of the Overseas suppliers and also referred to exchange of letters over the issue among them. The petitioner insisted that 360 days was required for payment of money on import of raw sugar, as such a period could be consumed in discharging and transporting the consignment to the factory, process the sugar and then to sell the stocks both in India and abroad. The petitioner also pointed out the disbursement in the said letter, wherein it is stated that the Letter of Credit is for 180 days. The petitioner in the very same letter gave a different proposal stating that the first respondent could finance any shortfall not exceeding Rs. 30 Crores and such financing would be repaid in the next 180 days together with interest @ 6% and that the first respondent should reduce their service charges from 1% to 0.5%. In case, it is not agreeable to the first respondent for the above said proposal of the petitioner, the first respondent should take up the responsibility for role over of the Letter of Credit. The petitioner requested the first respondent to express their willingness or otherwise to the alternative proposal suggested by them. In case, it is not agreeable to the first respondent for the above said proposal of the petitioner, the first respondent should take up the responsibility for role over of the Letter of Credit. The petitioner requested the first respondent to express their willingness or otherwise to the alternative proposal suggested by them. According to the petitioner, the first respondent did not agree for the alternative proposal and thus the MOU stood unmodified. 7. The petitioner stated that as the offer made in the letter dated 14.9.2004 was not accepted by the first respondent and therefore, the entire claim of the first respondent before the second respondent Arbitrator on the basis of such a letter is clearly unsustainable. Further, the High Seas Sale Agreement dated 23.9.2004 makes it clear that the jural relationship between the petitioner and the first respondent is that of the Seller and Buyer. The said agreement also prescribes 360 days of the date of the Bill of Lading as the time for payment. The agreement contemplates passing off the total and High Seas and all payments and clearances of cargo, central excise taxes are all on the account of the petitioner’s buyer. According to the petitioner they honoured all their commitments in accordance with the agreement, but, the first respondent made a claim which is unsustainable and therefore, a suitable reply was sent to their notice. 8. Before the arbitrator, the following two issues were framed: 1. Whether the first respondent herein/the petitioner before the Arbitrator is entitled to the claim amount? and 2. Whether the parties have mutually agreed for reduction of the usuance period from 360 days to 180 days and what would be the consequences? 9. By a consent of both the parties, Exhibits P-1 to P-34 were marked on the side of the first respondent/claimant and Exhibits R-1 to R-5 were marked on the side of the petitioner herein/respondent. Both the parties agreed that they are not letting in any oral evidence and only argued the matter. 10 . The learned Arbitrator after adducing the entire documentary evidence, came to the conclusion that the petitioner agreed to an altered condition. However, the petitioner requested the first respondent to finance the shortfall, if any, which shall not be more than Rs. 30 crores. 10 . The learned Arbitrator after adducing the entire documentary evidence, came to the conclusion that the petitioner agreed to an altered condition. However, the petitioner requested the first respondent to finance the shortfall, if any, which shall not be more than Rs. 30 crores. The Arbitrator held that the petitioner undertook to repay the amount so funded by the first respondent over the remaining six months period along with 6% interest. Therefore, according to the second respondent/Arbitrator, the petitioner is liable to pay as demanded by the first respondent. 11 . Aggrieved by the award dated 29.12.2008, the above petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996. 12. Heard the learned counsel for the petitioner and the learned counsel for the first respondent. I have also gone through the entire documents available on record including the impugned award. The above Original Petition was reserved for orders earlier. But due to want of time, the judgment could not be delivered. Therefore the Original Petition was posted again before the Court for further arguments and after hearing both the learned counsel appearing on either side in detail, the orders are being passed to dispose of this O.P. 13. The learned counsel for the petitioner vehemently contended that the award passed by the second respondent Arbitrator is contrary to the contract entered into between the parties, as the learned Arbitrator based on no evidence at all came to the conclusion that the contract originally entered into between the parties was altered and amended, which, according to the learned counsel for the petitioner is absolutely incorrect and therefore, the award passed by the second respondent/Arbitrator is liable to be set aside. 14. The learned counsel further pointed out that if relevant documents are considered carefully and together, it would obviously establish that the first respondent did not come forward to accept the alternative proposal submitted by the petitioner and as such, the original contract stood un-amended and unaltered and in such circumstances, the learned Arbitrators finding that there was an offer and acceptance in so far as the alternative proposal was concerned, is perverse and that too based on no evidence at all. 15 . 15 . Per contra, the learned counsel for the first respondent contends that a reasoned award has been passed by the second respondent/Arbitrator after going through the entire documents filed before him. She further submits that it is not for the High Court under Section 34 of the A & C Act to re-evaluate the evidence and come to a different conclusion even if the same is possible. Hence, she prays for dismissing the O.P. And in support of her submissions, she relies on the following decisions: 1. Vinitha Associates Limited, rep. by its Director, Chennai and Another v. Lakshna Holdings Pvt. Ltd., rep. by its Director, Chennai and Others (2007) 4 MLJ 872 2. Sree Kamatchi Amman Constructions rep. by its Partner cum Power of Attorney Holder Mr. K. Venkatapathy, No. 26, T.N. Nagar, Palanipet, Arakkonam-631002 and Another v. Divisional Railway Manager-Works, Palghat Division, Southern Railway, Palghat, Kerala and Others 2007 (5) CTC 17 : (2007) 5 MLJ 257 3. Brick Steel Enterprises, a registered Partnership Firm, rep. by its Managing Director, Mr. Leo Charles, Swamy Arul House, 369-B, Midland Nagar, Suramangalam P.O., Salem-636005 v. Superintending Engineer, Public Works Department, Special Building Circle, Salem-636007 2006 (5) CTC 519 : (2006) 2 MLJ 769 16. I have considered the rival submissions carefully with regard to facts and citations. 17. It is not in dispute that the parties entered into a MOU on 11.8.2004 which was marked as Exhibit P-1. Exhibit P-1 makes it very clear that the parties agreed to establish a 360 days usuance period, but, the same was sought to be modified to 180 days only by the first respondent as the bankers did not agree to. The first respondent informed the same to the petitioner and on coming to know about that, the petitioner wrote a letter to the first respondent on 14.9.2004 which was marked as Exhibit P-2. In Exhibit P-2, the petitioner expressed their dismay for the reduction of the period from 360 days to 180 days, but, they proposed an alternative arrangement. 18. It is the case of the first respondent that the alternative proposal was accepted and acted upon and in such circumstances, it is not open to the petitioner to go back on this issue and to contend that the initiated proposal was not accepted and therefore, the contract was unamended. 18. It is the case of the first respondent that the alternative proposal was accepted and acted upon and in such circumstances, it is not open to the petitioner to go back on this issue and to contend that the initiated proposal was not accepted and therefore, the contract was unamended. Therefore, the main issue before the learned Arbitrator was whether the parties have mutually agreed for reduction of the usuance period from 360 days to 180 days and what would be the consequences. 19. The learned Arbitrator after going through the MOU dated 11.8.2004 i.e. Exhibit P1, found that it provides for establishment of 360 days usuance period. Before the Arbitrator, it was submitted that the first respondent accepted the proposal made by the petitioner in the letter dated 14.9.2004 i.e. Exhibit P-2 and therefore, their claim is legal and the same is as per the modified contract. However, the petitioner was consistent in their stand by stating that in Exhibit P-2 they made only an offer which was never accepted by the first respondent and therefore, the original MOU i.e. Exhibit P-1 stood unaltererd and unamended. In such circumstances, the petitioner meticulously followed the clauses and conditions contained in the MOU and therefore, the claim of the first respondent which was based on the so-called modified and amended contract is illegal and therefore, the same could not be maintained before the Arbitrator. After hearing both the arguments and after going through the documents filed before him, the learned Arbitrator held that a perusal of the Exhibit P-2 would disclose that the petitioner had agreed for 180 days usuance period and in case they are not able to pay the amount within the said period, they have requested the first respondent to finance the shortfall, if any and agreed and undertook to repay the said amount so funded by the first respondent for the remaining six months period along with interest @ 6%. That apart, it was held by the learned Arbitrator that the petitioner also requested the first respondent to reduce their fee from 1% to.5% of the Letter of Credit value. That apart, it was held by the learned Arbitrator that the petitioner also requested the first respondent to reduce their fee from 1% to.5% of the Letter of Credit value. Thus, the learned Arbitrator was of the view that according to the letter of the petitioner dated 14.9.2004 i.e. Exhibit P-2, the first respondent sent their acceptance by letter dated 11.10.2005 i.e. Exhibit P-9 wherein in part 3, it is stated that with the concurrence of the petitioner the above revised contract was finalised and the Letter of Credit opened for 180 days was also accepted by the petitioner vide letter dated 6.9.2004 which is not in dispute. So according to the learned Arbitrator, it is made clear in Exhibit P-9 about the modified contract and also the liability of the petitioner. Therefore, the learned Arbitrator came to the conclusion that the contract originally entered into between the parties stood modified and as per the altered condition, the petitioner is liable to pay the amount as claimed by the first respondent. 20. I am aware of the fact that this Court cannot re-appreciate the evidence to come to a different conclusion even if the same is possible under Section 34 of the Arbitration and Conciliation Act. At the same time, if an award is passed contrary to the provisions contained in the contract, then, this Court can definitely interfere with the award as the same is not in consonance with the contract entered into between the parties. The main dispute involved in this case is that according to the petitioner the contract was not at all modified and altered and therefore, the petitioner followed the original contract and its clauses and in such circumstance, they are not liable as claimed by the first respondent. However, the first respondent contended that the contract was later on modified and amended and as per the altered clauses, the petitioner is liable to pay the amount as claimed by them. If that being so, it is necessary to go through Exhibit P-1, P-2 and Exhibit P-9 which were relied on by the learned arbitrator to conclude that the contract was modified with mutual consent. 21. Insofar as the original contract is concerned, i.e. Exhibit P-1, there is no controversy with regard to its clauses and conditions. If that being so, it is necessary to go through Exhibit P-1, P-2 and Exhibit P-9 which were relied on by the learned arbitrator to conclude that the contract was modified with mutual consent. 21. Insofar as the original contract is concerned, i.e. Exhibit P-1, there is no controversy with regard to its clauses and conditions. Even according to the first respondent, the original MOU Exhibit P-1 stipulates a period of 360 days usuance period. Now, let me consider Exhibit P-2 which is strongly relied on by the learned arbitrator to conclude that by Exhibit P-2, Exhibit P-1 was modified and the usuance period was reduced to 180 days from 360 days. 22. Exhibit P-2 is the letter written by the Chairman and Managing Director of the petitioner Company to the Branch Manager of the first respondent. For better appreciation and clarity, Exhibit P-2 letter is extracted below: “1. As per the Memorandum of Understanding cited above, NAFED has agreed to establish a 360 days usance Letter of Credit in favour of the Overseas supplier identified by us to enable import of 40,000 Mts of Raw Sugar. Accordingly, we approached NAFED vide our letters/faxes dated 20.8.2004, 23.8.2004, 24.8.2004 and 25.8.2004 to open Letter of Credit in favour of Cargill International SA, Geneva for a value of US $ 87,14,000 for a period of 360 days. 2. However, to our surprise, the L/C was established for a tenor of 180 days only. In this connection, we would like to state the following for your attention and action. (a) We had negotiated, agreed for a tenor of 360 days considering the time involved for the import of 40,000 MTs of Raw Sugar, discharging and transporting the consignment to our factories, processing the sugar and then selling the entire stock in both domestic/exports markets and realizing the proceeds for meeting the L/C commitment. Since the cycle time involved in the various activities mentioned would be around 12 months, we were very particular to get the tenor of 360 days and accordingly, the same was agreed to by NAFED. It is only on the strength of the sanction of 360 days usance L/C facility, that we entered into a contract with Cargill for import of 40,000 MTs. It is only on the strength of the sanction of 360 days usance L/C facility, that we entered into a contract with Cargill for import of 40,000 MTs. (b) The opening of the L/C for a period of 180 days has completely upset the calculations and it will not be possible to complete the processing of the entire 40,000 MTs, sell the stock and realize the proceeds within 180 days, to meet the L/C dues on the due date. (c) Under these circumstances, we request you to consider the following: (i) We would on a best efforts basis take steps to process and sell the cargo and realize the proceeds to meet the L/C dues on the 180th day. However, we request NAFED to finance the shortfall, if any, which shall not be more than Rs. 30 crores. We undertake to repay the amount so funded by NAFED over the remaining six months period (between 7th and 12th month) along with interest @ 6%. (ii) Since the fee of 1% was agreed to for 360 days usance, we request you to kindly revise the fee pro-rata to 0.5% of the L/C value. (iii) If the above are not agreeable, you may take steps for extending the L/C for a further period of 180 days on the day of expiry of the present L/C, thus taking the total tenor to 360 days.” 23. If Exhibit P-2 is carefully perused and considered, the petitioner only suggested an alternative proposal for reducing the period of usuance from 360 days to 180 days and made it very clear that if the alternative proposal was not agreeable to the first respondent, then, the first respondent should take steps for extending the Letter of Credit for a further period of 180 days on the date of expiry of the present Letter of Credit and thus taking the total tenor to 360 days. If at all Exhibit P-2 establishes something, it is the offer made by the petitioner to the first respondent for amending the contract in so far as the usuance period is concerned and it is needless to mention here that unless the same is accepted by the first respondent either explicitly or impliedly, then, it cannot be said that Exhibit P-1 has been modified and altered by Exhibit P-2. 24. 24. Now, let me consider Exhibit P-9 which was very much relied on by the learned Arbitrator to come to the conclusion that the proposals were accepted and the contract was modified. Exhibit P-9 is a letter dated 11.10.2005 written by the Branch Manager of the first respondent to the Chairman and Managing Director of the petitioner Company. As this letter i.e., Exhibit P-9 which is very much relied on by the learned Arbitrator to confirm that the conditions contained in Exhibit P-1 were modified with regard to the usuance period, the entire letter dated 11.10.2005 is also re-produced here for better re-appreciation. “Kindly refer to your letter dated 15.9.2005 in reply to our letter dated 13.9.2005 for the settlement of dues on the up sugar. We are surprised to note that every letter from Thiru Arooran Sugars Limited reiterates that all terms of the contract have been met. Our observations are submitted for your perusal: 1. Vide your letter dated 19.8.2004 it was informed that a contract for 40,000 MTs for import of Raw Sugar was finalised from a supplier located at Geneva/Switzerland at the rate of USD 223 PMT CIF Tuticorin and it was also confirmed by your subsequent letter dated 20.8.2004 that the supplier is Cargill International, Switzerland. 2. When we have informed that Bankers are reluctant to open 360 days LC you have sent us a revised Contract from the same Supplier Cargill International at the rate of USD 217.85 with a payment condition of 180 days LC which was duly signed by us for execution. 3. With your concurrence the above revised contract was finalised and LC opened for 180 days was also accepted by youvide your letter 6.9.2004. 4. However, when our LC was to be established for 180 days we have received a letter dated 14.9.2004 revising the conditions for payment in the event of opening a 180 days L.C. instead of 360 days indicated in MOU. After opening the L.C. you also agreed vide your letter dated 14.9.2004 that interest @ 6% shall be payable between 7th and 12th month with the reduced Service Charge of 0.5% on L.C. value. 5. After opening the L.C. you also agreed vide your letter dated 14.9.2004 that interest @ 6% shall be payable between 7th and 12th month with the reduced Service Charge of 0.5% on L.C. value. 5. A high-sea sales agreement was made in line with the MOU vide Clause No. IV-1 of MOU which describes only the value of Invoice to be raised on Thiru Arooran Sugars Limited while the interest payable by TASL to NAFED on NAFED’s investment is clearly spelt out in Para 7 and 8 of the MOU. 6. When a claim was made for interest vide our letter dated 13.9.2005, you have settled us only the amount payable to the Bank + 1% Service Charges without considering the interest payable to NAFED investment for six months. 7. When the payment was made after 360th day it was informed by Thiru Arooran Sugars Limited that the Interest due for the belated period of six months was included in the Purchase Bill of Cargill and Thiru Arooran Sugars Limited are not liable to pay interest. We may like to inform you here that had we opened LC for 360 days the contracted rate would have been at USD 223 PMT. On your advice, we have entered into a revised Purchase Contract @ USD 217.85 PMT with a payment condition of 180 days LC which has resulted in the benefit of INR 87.80 Lakhs to TASL at reduced Purchase Cost of USD 201880/-. 8. Vide Clause No. 4 of the MOU, raw sugar imported was to be stored in CWC/CWC managed under hypothecation of NAFED with a tri-party agreement between CWC, NAFED and TASL and vide Clause 10 of MOU, stocks shall be released on payment of cost plus service charges plus interest and any other expenses incurred by NAFED. Since the stocks were not stored in CWC or CWC managed godown we had to incur survey charges of Rs. 1,78,670/- for engaging Quality Services and Solutions (QSS) for the purpose. 9. The high-sea sale agreement dated 23.9.2004 is supplementary to the Invoice and its value and it does not cover anything about the interest on the investment and expenses incurred by NAFED. Merely sticking to the high sea sales agreement for settlement of payment after 360 days is simply ignoring vital clauses of the MOU governing the interest payment and expenses of NAFED. Merely sticking to the high sea sales agreement for settlement of payment after 360 days is simply ignoring vital clauses of the MOU governing the interest payment and expenses of NAFED. When the high sea sales agreement indicates about the payment in dollars after 360 days and TASL should have paid us the dollar rate prevailing as on the payment due date. Instead TASL conveniently booked Forex covers for payment at 180th day enjoying the benefits of exchange rates at reduced rates. Adding oil to the fire you have insisted us to deposit the payments made by you before the due dates in FDs and interest received from the Banks on FDs were also adjusted against the receivables towards the Invoice value. While we have adjusted the FD interest received towards cost of goods UCO Bank has deducted Rs. 27,842/- towards TDS on the interest which has resulted in loss to NAFED. From the above it may be seen that Thiru Arooran Sugars Limited has not fulfilled any contractual obligations as per MOU either in execution or repaying the amount due to NAFED, a farmers’ cooperative. Hence we request you to honour your commitment made by you letter dated 14.9.2004 to pay interest to NAFED @ 6% for the period 7-12 months and revising the service charges to ½% and also pay the survey expenses (Rs. 1,78,670/-) incurred due to your non-fulfillment of the storage of Stocks in CWC managed godowns and TDS (Rs. 27,842/-) deducted by UCO Bank on FDs made on your insistence.” 25. In the above letter, paragraph No. 4 was very much relied on by the learned Arbitrator to come to the conclusion that both the parties consented and agreed for the modified condition with regard to the usuance period. However, a careful perusal and consideration of the entire Exhibit P-9 would not support the case of the first respondent nor the findings of the learned Arbitrator that Exhibit P-9 confirms the modified condition with regard to the usuance period. As rightly pointed out by the learned counsel for the petitioner only these two exhibits i.e. Exhibit P-2 and Exhibit P-9 were very much relied on by the learned Arbitrator to come to the conclusion that both the parties have consented for the modified condition with regard to the usuance period. As rightly pointed out by the learned counsel for the petitioner only these two exhibits i.e. Exhibit P-2 and Exhibit P-9 were very much relied on by the learned Arbitrator to come to the conclusion that both the parties have consented for the modified condition with regard to the usuance period. But neither Exhibit P-2 or Exhibit P-9 would establish that there was consensus adidem between the parties insofar as the proposals submitted by the petitioner in Exhibit P-2. Therefore, I have no hesitation in holding that the findings of the arbitrator is quite contrary to the contents of Exhibit P-2 and Exhibit P-9 are perverse and in fact there was no material whatsoever that was produced before the learned Arbitrator to establish the case of the first respondent that the petitioner and the first respondent consented for the modification of Exhibit P-1 insofar as the usuance period is concerned and therefore, in so far as the claim made by the first respondent in this regard, that too, on the basis of the so-called modified condition, is liable to be set aside by this Court under Section 34 of the Arbitration and Conciliation Act, 1996. 26. The judgments relied on by the learned counsel for the first respondent stipulates the circumstances under which this Court can interfere with an award passed by the Arbitrator under Section 34 of the Act. The law laid down in those judgments are very established and I am also aware of the narrow scope of Section 34 of the Act. However, when an award is passed, which is quite contrary to the Clauses contained in the contract, then, certainly this Court can interfere with the same. As already narrated by me, Exhibit P-1, the original MOU was not at all amended or altered as contended by the first respondent and as held by the learned Arbitrator. Once it is established that Exhibit P-1 is unaltered and unamended, then Exhibit P-1 will hold the field and if any award is passed by the arbitrator which is not in consonance with Exhibit P-1, then that award is illegal and the same is liable to be set aside. 27. In the result, the award of the second respondent Arbitrator is set aside insofar as the claim of the first respondent which is based on the modified condition. 28. 27. In the result, the award of the second respondent Arbitrator is set aside insofar as the claim of the first respondent which is based on the modified condition. 28. Insofar as the storage of stocks in CWC is concerned, the first respondent claimed a sum of Rs. 1,78,670/- for engaging Quality Services and Sales (QSS) for the purpose. This Claim is not at all repudiated by the petitioner and therefore, the award of the second respondent Arbitrator insofar as this amount is concerned is upheld. 29. In the result, the Original Petition is partly allowed in the above terms. No costs.