By this petition filed under section 34 of the Arbitration and Conciliation Act,1996 (for short Arbitration Act, 1996), the petitioners seek to challenge award dated 19th July, 2011 made by the learned arbitrator allowing claims made by the respondents. The petitioners were original respondents before the learned arbitrator. Respondents herein were original claimants.

2. FACTUAL MATRIX:-

(a) On 7th February, 1994, Tata Finance Ltd. which stood amalgamated with the respondents herein (hereinafter referred to as the said Agreement) entered into an agreement of lease with the Gujarat Electricity Board (Predecessor of the petitioners herein) whereby the respondents agreed to lease in favour of the said Gujarat Electricity Board suit property for a period of 72 months on the terms and conditions setout therein. Under the said agreement Gujarat Electricity Board was liable to pay lease rentals every month based on an asset cost of Rs.1,000/-fixed at Rs.19.95 per month per thousand payable monthly in advance. Parties thereafter executed supplementary lease schedules in respect of the said equipments. The said Board started paying lease rentals to the respondents from April 1994 at the rate prescribed under the said agreement. Some of the relevant clauses of the said agreement which would have bearing on the subject matter of this petition are extracted as under :

Clause 2.2 That in the event of the Lessee being in arrears of such lease rentals, such arrears of lease rentals shall carry service charges at the rate of 30% per annum on the compounding basis with monthly rests from the due dates specified in supplementary lease schedules attached / to be attached till date of actual payment.

Clause 2.4 The Lessor shall be entitled to vary the lease rental charges at any time during the continuance of this Agreement in the event of a change occurring on the basis of which the lease rentals charged hereby are computed, namely variables relating to depreciation rate, permitted as per the Indian Income Tax Regulations for the time being in force on declining balances or modifications in the cost of money to the Lessor. The Lessee irrevocably agrees and declares that the lease rental charges shall be increased in co relation to increase in taxes whether sales tax or excise, and any other related or consequential charges that may be levied on or in connection with the lease of the equipment under this Agreement. At any time hereafter or any increase in the price of the equipment between the date of the order placed on the manufacturer/supplier thereof and the date of its delivery.

Clause 3.4 The Lessees shall not be liable for fair and normal wear and tear of the Equipment and the burden and depreciation resulting from any such fair wear and tear shall fall upon the Lessor who shall be entitled to claim from the Revenue all capital allowances in respect of the Equipment.

Clause 3.5 Since the Lessee is not the owner of the Equipment, the Lessee shall not claim any relief by way of any deduction, allowance or grant, available to the Lessor as owner of the Equipment under the Income Tax Act, 1961, or under any other statute, rules, regulations or guidelines issued by the Government of India or any statutory authority and not do or omit to do any act, deed or thing whereby the Lessor is deprived wholly or partly and that the Lessee shall, at the end of each financial year of the Lessor, provide to the Lessor such information as it may require to claim relief by way of any deduction allowance or grant, as the owner of the Equipment, under the Income Tax Act 961, and the Lessee undertakes to comply with and observe, at all times, the terms and conditions to be complied with or observed in respect of the use and operation of the Equipment to entitle the Lessor to obtain such relief.

Clause 14 The Lessee shall indemnify and keep indemnified the Lessor, at all times, against any loss or seizure of the Equipment under distress, execution or othe