JUDGMENT : Abdul Rehim, J. The respondent in O.P (Arb) No.589/2008 on the files of the District Court, Ernakulam is the appellant in this appeal, which is instituted under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short). The respondent herein is the petitioner before the court below. By the impugned order, the District Court had partly interfered with the Award of the Arbitrator and set aside the direction issued to the respondent herein to make payment of an amount of Rs.12,87,361/- towards the 'price escalation' and a sum of Rs.7,54,444/- towards the 'refund of tax deducted in excess'. The appellant is challenging the decision of the District Court on various grounds. 2. A brief narration of the dispute will be beneficial. The appellant was the contractor for installation of the false ceiling and insulation works at the terminal of Cochin International Airport. On awarding the work, the respondent had executed the agreement on 6.12.1997. The period stipulated for completion of the work was on or before 17.8.1998. The work was actually completed on 30.9.1999. The period for completion of the work was extended without imposing any penalty on the appellant. The Final bill with respect to the contract was prepared on 20.3.2000, based on which payments were effected on 20.6.2000. Thereafter the appellant submitted a claim demanding further payments, on 5.11.2001, on three counts; (i) refund of balance security deposit (ii) repayment of excess sales tax deducted and (iii) payment of cost escalation based on provisions contained in the contract on the premise that the period of work was extended beyond 12 months. Interest was also claimed on these amounts. Since the respondent had refused to oblige the request, the appellant invoked the remedy of arbitration. A sole Arbitrator was appointed by this court in a petition filed by the appellant, under Section 11 of the Act. The sole Arbitrator had adjudicated the dispute and passed the Award on 26.12.2007, holding that the appellant is entitled to get, (i) refund of security deposit of Rs.3,71,716/- along with interest of Rs.64,056/-, (ii) Rs.7,54,444/- towards refund of alleged excess sales tax deducted and (iii) an amount of Rs.12,87,361/- towards price escalation. The sole Arbitrator had adjudicated the dispute and passed the Award on 26.12.2007, holding that the appellant is entitled to get, (i) refund of security deposit of Rs.3,71,716/- along with interest of Rs.64,056/-, (ii) Rs.7,54,444/- towards refund of alleged excess sales tax deducted and (iii) an amount of Rs.12,87,361/- towards price escalation. A counter claim filed by the respondent herein seeking damages on account of an alleged defect in the work and a consequential collapse of the false ceiling at the portion of one of the external domes, was rejected by the Arbitrator, on the finding that the alleged fault was occurred beyond the defect liability period. 3. The respondent herein had invoked Section 34 of the Act by approaching the court below seeking to set aside the award. While disposing the Original Petition the court below found that, the claim allowed by the Arbitrator with respect to refund of excess recovery of tax is not sustainable, because the deduction at the higher rate was only in accordance with the provisions contained in the Kerala General Sales Tax Act ('K.G.S.T Act', for short). It was found that the findings of the Arbitrator in this regard is opposed to provisions of the substantive law governing the issue and hence it is patently illegal. With respect to the claim for payment of price escalation, the court below found that the claim remained barred under clause 52.1 of the agreement, because the appellant was precluded from raising such a claim after submission of the final bill. However, the District Court upheld the Award to the extent it directed payment of the balance amount of security deposit along with interest. The court below had also upheld the findings of the Arbitrator in negativing the counter claim of the respondent, with respect to the defect liability. It is aggrieved by the findings of the court below in setting aside the award to the extent as mentioned above, the present appeal is instituted. 4. Heard; counsel appearing on either side. Learned Counsel for the appellant contended that, the deduction of sales tax over and above 2%, was illegal and opposed to Clause 12 of the special conditions in the agreement, which stipulate that;- “deductions will be made from the bills towards the sale tax as per the KGST Act. 4. Heard; counsel appearing on either side. Learned Counsel for the appellant contended that, the deduction of sales tax over and above 2%, was illegal and opposed to Clause 12 of the special conditions in the agreement, which stipulate that;- “deductions will be made from the bills towards the sale tax as per the KGST Act. As per the existing provisions 2% will be deducted on civil contract.” Evidently, the respondent had deducted tax @ 5.75% from the bill amount. It is submitted by the learned counsel appearing for the appellant, that deductions were made even upto 9%. On the contrary, counsel for the respondent contended that, the deduction was made only in accordance with Section 7B of the K.G.S.T. Act and the amount deducted were already remitted to the Government. It is pointed out that, it is for the appellant to move before the Government seeking refund of the tax, as provided under Section 44 of the K.G.S.T. Act. The court below had analysed the relevant provisions of the K.G.S.T. Act and observed that, the work carried out by the appellant will fall under entry 12 in the 4th schedule of that Act, which is 'supply and fixing of furniture and fixtures, partition counters, wall paneling including interior decoration and false ceiling'. Entry No.19 therein is 'civil works like construction of buildings, bridges, roads etc'. The rate of deduction to be made by the awarder of the work is stipulated under Section 7B. The respondents have produced Ext.R(d) which is a Circular issued by the authorities of the Sales Tax Department, in which it is pointed out that, with respect to works other than civil works the deduction need to be made is at 5% (5.5% by virtue of a subsequent revision). The court below found that, the respondent had deducted the tax only in accordance with the provisions of the K.G.S.T. Act. It was found that, the special conditions incorporated in the agreement under clause 12 will not stand in the way of the awarder of the work complying with the statutory provisions. It was also found that, the appellant cannot claim estopel against any statutory provisions. Relying on a decision of the hon'ble Supreme Court in ONGC Ltd. Vs. Saw Pipes Ltd., (2003) 5 SCC 705 it was held that, such violation is in public good and in public interest. It was also found that, the appellant cannot claim estopel against any statutory provisions. Relying on a decision of the hon'ble Supreme Court in ONGC Ltd. Vs. Saw Pipes Ltd., (2003) 5 SCC 705 it was held that, such violation is in public good and in public interest. Therefore it was held that the award which is against provisions of the substantive law is patently illegal. 5. On a close scrutiny of clause 12 of the special conditions in the agreement, it can be noted that, the stipulation is that deductions will be made from the bills towards sales tax as per K.G.S.T Act (emphasis supplied). Then it is stated that, as per the existing provisions 2% will be deducted on civil contract. The understanding reflected is that, the parties have agreed to deduct tax as per the K.G.S.T Act. What is mentioned is only that, the existing rate with respect to civil contract is 2%. But going by the statutory provisions it is evident that the nature of the work undertaken was not a 'civil contract'. Therefore, whatever rates prescribed in the statute with respect to 'other works' will apply. Hence it cannot be said that the respondent had gone contrary to the provisions of the agreement. In fact, Clause 12 cannot be construed in any manner as against the provisions in the statute. Even assuming that the said clause is in any manner repugnant to the relevant provisions in the KGST Act, the statutory provisions has to prevail. The Arbitrator had failed to consider these aspects and the decision of the Arbitrator in this regard will be against provisions of the substantive law on the subject. Therefore, interference made by the District Court in this regard need to be sustained. 6. Next contention is with respect to the price escalation claimed based on clause 53.2 of the agreement. It provides that, if an extension of time is granted by the respondent without imposition of any penalty, then the respondent shall agree to the price adjustments with respect to the work done during the extended period, provided the actual period of the contract including the original contract period exceeds 12 months. There is no dispute on the fact that, original period of the contract was extended without imposing any penalty or liquidated damages on the appellant. There is no dispute on the fact that, original period of the contract was extended without imposing any penalty or liquidated damages on the appellant. Therefore, going by the terms of the agreement, the respondent is liable for payment of price adjustments, with respect to works executed during the extended period. Provisions contained in clause 53.3 introduces a formula, which would enable the computation with respect to the rate of the price escalation. It is on the basis of the said conditions, that the Arbitrator held that the appellant is entitled for price escalation, based on the fact that the contract period was extended without imposing any penalty, beyond 12 months. But the District Court had set aside the said finding by accepting the contention of the respondent based on clause 52.1 of the agreement, which extinguishes the right of the contractor to put up any further claim after submission of the final bill. As already observed in the foregoing paragraphs, the final bill was drawn on 20-03-2000. It is evident from the documents that the appellant had made an endorsement in acceptance of the measurements contained therein. It is also evident that payment on the basis of the final bill was made on 20-06-2000. Admittedly the claim for the price escalation was put up for the first time, only on 05-11-2001. Therefore the contention of the respondent is that, the right if any vested with the appellant had extinguished after submission of the final bill, as contemplated under clause 52.1 of the agreement. 7. Contention of the appellant on the above aspect is that, the final bill was not submitted by them; but it was prepared only by the respondent. However, it is evident that the appellant had accepted the measurements contained therein and also received payments on the basis of it in accordance with the calculations contained therein. Therefore, prima facie, it is evident that the claim for the escalated price was made only after submission of the final bill. 8. But, the question to be considered is as to whether clause 52.1 of the agreement will become invalid in view of provisions contained in Section 28(b) of the Indian Contract Act, 1872. Therefore, prima facie, it is evident that the claim for the escalated price was made only after submission of the final bill. 8. But, the question to be considered is as to whether clause 52.1 of the agreement will become invalid in view of provisions contained in Section 28(b) of the Indian Contract Act, 1872. It provides that, every agreement which extinguishes the rights of any party thereto or discharges any parties thereto from any liability under or in respect of any contract, on the expiry of a specified period, so as to restrict any party from enforcing his rights, is void to that extent. The court below had relied on a decision of the hon'ble Supreme Court in Union of India and others Vs. Onkar Nath Bhalla and sons, (2009) 7 SCC 350 . It is held therein, when there is a clause saying that no further claim shall be made by the contractor after submission of the final bill, then the rights deemed to have been waived and extinguished. Signing and receiving of the final bill without any protest or reservation by the contractor, would waive his right as per the condition of the contract. But it is pertinent to note that, the scope of Section 28(b), as it stood amended was not considered in the said decision. While considering the contention that clause 52.1 of the agreement is against provisions of Section 28(b) of the Indian Contract Act, we may refer to a decision of this court in Union of India and another Vs. K.A. Jose (judgment in Arb. Appeal No.30/2011, dated 21-07-2011). In the said judgment it was held that, a clause in the agreement restricting a time limit for making the reference as 90 days, from the date of receiving intimation that final bill was ready for payment, is violative of Section 28(b) of the Indian Contract Act. The learned District Judge had distinguished the said ruling by observing that, it relates only to a period of limitation for making reference for the arbitration. It was observed that, in the case at hand the question is not relatable to any period of limitation, but on the other hand clause 52.1 only extinguishes the right of the petitioner to raise the claim after submission of the final bill. 9. It was observed that, in the case at hand the question is not relatable to any period of limitation, but on the other hand clause 52.1 only extinguishes the right of the petitioner to raise the claim after submission of the final bill. 9. Learned counsel appearing for the appellant had cited a decision of the hon'ble Supreme Court in Grasim Industries Ltd. Vs. State of Kerala (Order in Civil Appeal No.3180/2007, dated 19-04-2017. Referring to provisions contained in Section 28 (b) of the Contract Act, it is held that, the provision unequivocally provides that an agreement which extinguishes the right of a party on the expiry of the specified period would be void. There also the restricted period stipulated in the contract was with respect to raising of an arbitral dispute. It was held that, the clause contained in the contract which restricted such period has to be treated as void. It was held that, the limitation for reference of the claim would have to be determined only under provisions of Article 137 of the Limitation Act. In this regard, we are of the considered opinion that, sub section (a) & (b) of Section 28 of the Indian Contract Act need to be considered as applicable to distinct circumstances. Under sub-section (a) the legislature postulates a situation where the contract become void by virtue of the parties thereto restricts absolutely from enforcing any rights under the contract through usual legal proceedings in the ordinary tribunals or a situation where they limits the time within which any party may enforce his rights. With respect to that, an exception is provided as 'Exception (1)' appended to Section 28 itself, where the parties have agreed for referring any dispute arising out the contract for arbitration. But in sub-section (b), the specific provision contained therein makes an agreement void, if it extinguishes the right of any party thereto in respect of any contract on the expiry of any specified period, so as to restrict the parties from enforcing such rights. The scope and intention of the legislature in introducing the amended provisions of Section 28 has been elaborately discussed in the decision of the hon'ble Supreme Court in Union of India and another Vs. Indus Ind Bank Ltd., (2016) 9 SCC 720 . The scope and intention of the legislature in introducing the amended provisions of Section 28 has been elaborately discussed in the decision of the hon'ble Supreme Court in Union of India and another Vs. Indus Ind Bank Ltd., (2016) 9 SCC 720 . While considering the unamended provisions, the Law Commission in its 97th report of March 1984 observed that, the section does not invalidates an agreement which provides that, at the end of the specified period if the right thereunder are not enforced, the right shall cease to exist. It is found that, this position had created serious anomalies and hardships apart from leading to unnecessary litigations. Therefore it was opined that the section which stood is in need of reform on this point. Therefore the Law Commission has recommended for amendment of Section 28 of the Contract Act. The statement of objects and reasons of amendment incorporated would provide that, the courts has been holding that, Section 28 shall invalidate only a clause in any agreement which restricts any party thereto from enforcing his rights absolutely or which limits the time within which he may enforce his rights. On the other hand, it was held that, the said Section shall not come into operation when the contractual term spells out an extinction of the right of a party to sue or spells out the discharge of the parties from all liability in respect of the claim. Therefore it was found that, the existing provision of Section 28 will hit only an agreement relinquishing the remedy; i.e. whether the time limit prescribed in agreement is shorter than the period of limitation provided by law. A distinction was assumed to be existing between the remedy and right and this distinction is the basis for the present position, under which a clause barring a remedy is void, but a clause extinguishing the right is valid. It is stated that such an approach in practice causes serious hardship and might even be abused. Therefore it was felt that Section 28 should be amended and the Bill introduced seeks to achieve such an object. It is stated that such an approach in practice causes serious hardship and might even be abused. Therefore it was felt that Section 28 should be amended and the Bill introduced seeks to achieve such an object. It is held by the hon'ble Supreme court in Indus Ind Bank's case (supra) that the amendment therefore seeks to set aside the distinction made in the case law upto date, between agreements which limit the time limit within which remedies can be availed and agreements which do away with the rights altogether so limiting the time. These are obeviously a substantive change in the law which are remedial in nature and cannot have any retrospective effect. In the case at hand, the agreement in question was entered after the amended provisions were introduced to the statute of the Indian Contract Act. Therefore it is to be held that clause 52.1 contained in the agreement will be hit by provisions of Section 28 (b) of the Indian Contract Act, 1872 and as a consequence the said clause will become void. 10. A further contention raised by the learned counsel appearing for the appellant is that, going by the terms of clause 53.3 of the agreement, the price escalation promised therein is basically in the nature of 'contract amount', which the respondent is liable to pay based on the approved final bill. Therefore it is pointed out that, the request for payment of escalated price cannot be termed as a further claim. On the other hand, the amount in this regard is only a deficit in the final bill prepared, which need to the rectified for payment in accordance with the terms of the clause 53.3, is the contention. Therefore, the contention is that, even assuming that clause 52.1 is valid, the right in this regard cannot be denied. We also find force in the above said contention. 11. In view of the discussions made herein above, we are of the opinion that the court below went erred in discarding the contentions of the appellant based on Section 28 of the Indian Contract Act. Consequently we are persuaded to hold that, reversal of the Award by allowing the claim with respect to the escalated price, is legally unsustainable. It is to be held that the appellant is entitled for the amounts awarded by the Arbitrator on this count. 12. Consequently we are persuaded to hold that, reversal of the Award by allowing the claim with respect to the escalated price, is legally unsustainable. It is to be held that the appellant is entitled for the amounts awarded by the Arbitrator on this count. 12. In the result, the above arbitration appeal is allowed in part, to the extent of reversing the impugned judgment of the District Court which negatived the findings of the Arbitrator to the extent it allowed the claim with respect to the 'escalated price'. The award of the sole Arbitrator dated 26-12-2007 is upheld on all other heads, except the claim of Rs.7,54,444/- and interest due thereon, allowed under claim No.III.