Avadh Behari Rohatgi, J.

( 1 ) THE appellant. All India Institute of Medical Sciences at New Delhi, invited tenders for "the supply and installation of air-conditioning plant, air handling units, whether makers, fan coil units, pipelines and other accessories in the main plant room, ward block, paying bed wards etc. " The respondent, M/s American Refrigeration Company Limited, submitted a tender. Their tender was accepted. On November 21, 1968, a formal agreement was executed between the parties. In their letter dated April 24, 1967, M/s American Refrigeration Company (whom I shall call the contractor because in the agreement they are so described) had written to the Institute that

"our prices are exclusive of sales tax, octroi or any other tax which shall be charged extra as applicable at the time of the delivery. "

( 2 ) IT is not in dispute that this letter formed a part of the contract. The contractor indicated separately the sales tax payable by the Institute. It was also mentioned that the rate of sales tax applicable will be 10 per cent.

( 3 ) THE work of air-conditioning was completed sometimes in 1975. But in the course of the execution of the contract disputes arose between the parties. There was an arbitration clause. The matters in dispute were REFERRED TO to the sole arbitration of Mr. G. P. Malik on March 16, 1977. The arbitrator made and published the award on May 18, 1976. The award was filed in Court. Both parties filed objections to the award.

( 4 ) THE disputes which were REFERRED TO to the arbitrator were the claims of the contractor regarding sales tax, octroi duty, excise duty etc. But there is only one point in dispute in this appeal and that is regarding the decision of the arbitrator of the claim of the contractor regarding sales tax. The contractor claimed that they were entitled to be paid Rs. 2,56,787. 50 on account of sales tax. The arbitrator rejected this claim. His award on this point was in these terms : "dispute/ciatm No. Award : Claim No. 1 : On account of Sales The claimants have not Tax etc. Rs. 2,11,834. 90 modified been able to establish this later on to Rs. 2. 56,787. 50 by member claim. secretary vide his letter of 25th Oct. 1977.

( 5 ) THE contractor challenged the award before the learned single Judge. They said that the award was bad because there was an error on the face of the award. It was contended by the contractor before the learned judge that there was an unambiguous agreement whereunder the Institute had agreed to pay sales tax to the contractor and the arbitrator was not entitled to ignore this express covenant between the parties. It was submitted that on a mere reading of the agreement between the partics it can be found that there is an error apparent on the face of the award. Counsel for the Institute submitted to the learned judge that he was not entitled to look at the contract. The learned judge repelled this submission. He said :

"i do not agree. The Court can look at the agreement between the parties as it is the basis of the award. "upon the whole his conclusion was this :

"the Court can look at the agreement. The arbitrator cannot ignore the express terms "contained in the agreement to pay sales tax. It is, therefore, held that refusal by the arbitrator to allow sales tax to the petitioner inspite of express agreement is an error apparent on the face of the award. The petitioner is entitled to sales tax. "

( 6 ) HE based his opinion on Alopi Pd, and Sons v. Union of India AIR 1960 S. G. 588 and Beant Singh v. Union of India 1977 (1) S. G. G. 220.

( 7 ) THE learned judge took the view that this bad portion of the award was severable from the rest of the award which was good. He, therefore, amended the award. He ordered that a further sum of Rs. 2,56,787. 50 shall be paid to the contractor by the Institute on account of sales tax. From the decision of the learned Judge the Institute appeals to this Court.

( 8 ) THE crucial question upon this appeal is this : Does the aw

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