A.K. Menon, J.

1. By this common order we dispose five appeals. The appellants in all appeals are manufacturers of LPG Cylinders, that are supplied to Hindustan Petroleum Corporation Ltd.(“HPCL”) - respondent under the contracts which are in the nature of purchase orders. The appellants in Appeal Nos.365/2011 and 366/2011 are the same. The two appeals impugn two orders passed under section 34 arising out of purchase orders of different dates. The respondent is common in all appeals viz. HPCL. In Appeal Nos.246/2011, 247/2011, 365/2011 and 366/2011, the impugned order is dated 10th February, 2011. By the said order, four awards were set aside. While doing so reasons have been recorded in Arbitration Petition No.265 of 2006 forming subject matter of Appeal No.246 of 2011. The impugned orders passed in Arbitration Petition Nos.281 of 2006, 305 of 2006, 265 of 2006 and 298 of 2006 all adopt the reasons given in the order in Arbitration Petition No.265 of 2006.

2. In Appeal No.38 of 2007 the order impugned is dated 13th September, 2005 whereby Arbitration Petition No.259 of 2005 came to be dismissed finding that there was no reason to interfere with the award. The award forming subject matter of four appeals viz. 246/2011, 247/2011, 365/2011 and 366/2011 granted relief to the petitioners, directing the respondent to refund the amount recovered from their invoices, permitting certain escalation to be adjusted for a specified period and directing the respondent to pay simple interest at 7% per annum from the date of recoveries and/or adjustment made by the respondent till date of payment. In some cases, the respondents were directed to refund the amount of bank guarantees encashed. These awards were set aside by the orders passed in four arbitration petitions. The arbitrator in those four references was common but in the fifth reference viz. subject matter of Appeal no. 38 of 2007, the arbitrator was different and this award was against the appellants inasmuch as all claims came to be dismissed and recoveries made by the respondent corporation were held to be valid. The appellants are aggrieved by virtue of the fact that no relief was granted. For purpose of considering the challenge in these appeals, it will be appropriate that we consider the facts in Arbitration Petition No.265 of 2006 wherein the learned Single Judge has passed a reasoned order and which reasons have been adopted in the three other Arbitration Petitions of this group. As per the fifth appeal is concerned, there is a separate order.

3. The facts which led to the reference are as follows: Disputes arose between parties in relation to purchase order No.M-0530/LPG/LPG-722-GM dated 21st June, 1999 and M-1027/LPG/LPG-GM dated 27th April, 2000 issued by the respondent to M/s.Lite Containers Pvt. Ltd. for supply of 14.2 Kgs. capacity LPG cylinders as detailed in the attachments to purchase orders. The purchase order was a formal document. All terms and conditions for supply were listed in its annexures. The annexures contained provisions for :

(i) Price,

(ii) Yield/MT

(iii) Stockyard

(iv) Escalation/De-escalation

(v) Quantity

(vi) Excise duty

(vii) Sales Tax on LPG cylinders

4. Attachment no.II to the purchase order are general terms and conditions applicable for “Total Supply Basis” and “Fabricated Basis”. The conditions specify that the price of the cylinder was provisional inasmuch the price was in the process of being reviewed and a final price was to be advised subsequently, based upon the decision of an “Industry Task Force”. While the cylinders were to be manufactured out of LPG Grade Steel purchased from SAIL, TISCO, ESSAR or LLYODS, they would be subject to a new pricing formula which had been approved by the Ministry and Oil Industry and effective from 1st April, 1994. The new pricing formula was to govern price of cylinders supplied against the said purchase order and to arrive at cylinder price with effect from 1st April, 1999. As per new pricing formula the appellants were requested to submit the Steel price applicable at the nominated stockyard with break up showing Excise duty, Freight, SDF, Distribution Charges etc. separately.

5. Pending confirmation of price effective from 1st April, 1999, the appellants were to charge the respondent at provisional rates which were determined as per steel price prevailing on 1st March, 1999. The purchase orders are largely similar with slight variations in provisional rates. The reason for such minor difference is not explained. The purchase order in case of M/s.Prathima Industries Pvt. Ltd. in Appeal No.365 of 2011 and 366 of 2011 also contain similar provisions as to price. The prices of steel are specified as prevailing on 1st March, 1999. In the case of M/s.Prathima Industries Pvt. Ltd. also there is minor difference in price. Thus, the purchase orders specify minor price variation, despite the reference point being the same. The price being provisional, the appellants sent 17 bills for payment.

6. The individual references filed by the parties, namely, M/s.Lite Containers (P) and M/s.GDR Cylinders Pvt. Ltd. being similar in nature, both parties agreed that they be heard simultaneously. Common issues were involved in both cases and arguments of M/s.GDR Cylinders Pvt. Ltd. were agreed to be considered as submissions on behalf of M/s.Lite Containers Pvt. Ltd. as well. The award considered the appellants' claim for payment of the differential amount, being the amount deducted from the bills raised pursuant to the purchase orders. The appellants' claim that the respondent was not entitled to vary or reduce the rate of Rs.685.49 and Rs.698.07 per 14.2 kg. cylinder and that the respondents were not entitled to apply any other formula suggested by the Industry Task Force with the aid of M/s.Price Waterhouse Coopers as their consultant.

7. According to them the said pricing formula was not approved by the Ministry of Petroleum and Natural Gas, Union of India (“the Ministry”). They sought refund of the amount of Rs.50.09,433/- withheld from 22 bills in case of Appeal No.246 of 2011, Rs.43,89,359/- withheld from 37 bills in Appeal No.247 of 2011 and similar deductions of Rs.41,26,255/- and Rs.26,54,026/- were made during the year 2000-01 and 2001-02 in Appeal No.366 of 2011. In case of Appeal No.365 of 2011 deductions were made of Rs.1,10,90,228/-. Disputes having arisen, refund of the amounts deducted were sought. In some cases, bank guarantees have been encashed and the amount recovered from bank guarantees were directed to be paid back to the petitioner. In case of M/s.Suburban Industries Ltd. the appellant in Appeal No.38 of 2007, no relief was granted by the Arbitral Tribunal and for that reason, the appellant had challenged the award but the award was upheld by the learned Single Judge.

8. In the Arbitration Petitions forming subject matter of first four Appeal Nos.246/2011, 247/2011, 365/2011 and 366/2011 the petitioner was HPCL and the respondents were manufacturers. Being aggrieved by the award and their challenge before the Single Judge, it was submitted that the award in all references were liable to be set aside on the basis of the judgment dated 17th December, 2009 passed in Arbitration Petition Nos.138 of 2006 and 223 of 2006.

9. Per contra, it was submitted by the petitioner's therein that the judgment dated 17th December, 2009 would not apply. The Court proceeded to hold that even assuming that the judgment dated 17th December, 2009 did not apply, the award was still liable to be set aside. Reference was made to the purchase order and attachment thereto, the particulars of which have already been narrated above. The impugned order records that on 21st June, 1999 the respondent which was the co-ordinator for pricing on behalf of the petroleum companies had informed all cylinder manufacturers that the industry had decided that price of cylinders shall be kept provisional from 1st July, 1999 onwards and firm prices would be advised on completion of review by the Industry Task force. The circular in question apparently stated that the pricing of cylinders was fixed till that time, based on the Ministry approved escalation formula which had been arrived at after a study by the Industry Task Force, but which needed to be reviewed on account of various factors. The purchase order dated 21st June, 1999 was later modified by a change order which provided that while pricing of LPG cylinders was based on the escalation formula as approved by the Ministry and that the industry is reviewing the escalation formula and therefore the price of LPG cylinders was kept provisional from 1st July, 1999 onwards. Firm prices were to be advised on completion of the review by the Industry Task Force. The arbitrator had apparently noted that a change order had been accepted by the respondent thereby affecting the prices. All other terms and conditions of the purchase order remained unchanged other than those relating to the price.

10. Reference was made to the two purchase orders which were dated 21st June, 1999 and 27th April, 2000. The price under the second purchase order was also stated to be provisional but it was stated that a new pricing formula had been approved by the Ministry applicable and effective from 1st April, 1994. The Court recorded that both purchase orders expressly stipulated that the prices were only provisional and that the same was being reviewed and the final price will be advised subsequently based on the decision of the Industry Task Force. The Court found that the Arbitrator had passed an award contrary to an express provision in the purchase order regarding the price. Reference was being made to paragraph 15(e) of the award in which the Arbitrator observed that all terms and conditions of the original order remained unchanged, the provision under the “Price” term also remain unchanged. The Court found that an error had been committed on account of the fact that the Arbitrator proceeded on the basis that all terms and conditions of the purchase order remain unchanged whereas what the change order had contemplated was that except for the price all other terms and conditions of original order remain unchanged.

11. According to the learned single Judge, the arbitrator failed to notice the fact that only other terms and conditions, save and except price were to remain unchanged whereas the prices was subject to revision as aforesaid. Therefore, the Court found that the arbitrator had proceeded on an erroneous basis and the price has not been finalised and that the arbitrator could at best fix the price which he had failed to do. The impugned order proceeded to consider submissions on behalf of the appellants that the price specified in the purchase order could not be subjected to upward or downward variation as contemplated in the judgment of the Supreme Court in Bhupendra Singh Bhatia vs. State of Madhya Pradesh 2006 (13) SCC 700. The Single Judge found that the Supreme Court in that case had observed that when a sale of any commodity was made, the seller and purchaser both must know the price at the time of or before the sale. If a purchase price has to be fixed later, it was always open to the purchaser to reduce the purchase price to a negligible amount. Similarly if sale price is to be fixed subsequently, the seller could demand an exorbitant amount. That such coercive action is not expected of the State which would be treated arbitrary and unreasonable.

12. The Court, however, found that the petition at hand was under section 34 of the Arbitration and Conciliation Act. This aspect was not urged before the arbitrator nor had the arbitrator dealt with the disputes between the parties on that basis. The appellant/petitioner was denied an opportunity of dealing with the same and conduct of the parties was to the contrary. There were fluctuation in the rates and the appellant had given benefit of fluctuation in the rates to the respondents. Moreover, the arbitrator had not held the clause to be void. The judgment was therefore found to be of no assistance. No other contentions were considered by the learned Single Judge.

13. On behalf of the appellants, the arguments were led by Ms.Godse, who submitted that the period of claim for which the appellant – M/s.Prathima Industries Pvt. Ltd. had for supply of LPG cylinders was from 1st July, 1999 to 31st May, 2001 under purchase orders dated 21st June, 1999 and 27th April, 2000 as well as the change orders issued thereunder. That on 16th August, 1999 and 30th September, 1999 change orders placed under purchase order dated 21st June, 1999 which provides for charging of a provisional price and the final price had to be approved by the Ministry. Change orders dated 23rd October, 2000, 27th March, 2001 and 12th April, 2001 placed under purchase order dated 27th April, 2000 provided for charging of a provisional price. The final price was to be approved by the Ministry but all other terms and conditions would apply. Ms.Godse submitted that between 18th November, 1998 and 1st March, 1999 the firm price was fixed at Rs.663.76 as per clause 11.18 of the written submissions filed by the appellants in Appeal Nos.365/2011 and 366/2011. This submission was supported by making reference to rejoinder filed in reply to the counter claim filed by Hindustan Petroleum Corporation Ltd. That in accordance with clause 11.16 of written submissions with effect from 1st April, 1999 the price paid was Rs.692.27. Whereas the provisional price paid with effect from 1st August, 1999 was Rs.692.02 per cylinder and at the rate of Rs.687.15 with effect from 16th August, 1999.

14. Ms.Godse further submitted that on 1st November, 2000 the respondent had informed the appellants that the provisional basic price of cylinder was reduced to Rs.645/- with effect from 1st July, 1999 on the basis of draft report of M/s.Price Waterhouse Coopers ('PWC') and on 15th November, 2000, the respondent issued a circular and claimed refund on account of revise provisional basic price of Rs.645/-. This was disputed and a reference came to be made on 29th May, 2003, when the appellants filed the Statement of claim, sought fixation of the price as per the Ministry's formula and sought payment of the differential amount. All details were sought to be provided. The respondent contended that fixation of firm prices was as per PWC report and relied upon correspondence in support. Thereafter both parties filed written submissions and an award was passed holding that the final price would be as per the Ministry's approved formula. It rejected the claim of the appellants, holding that final price should not be fixed since it was beyond the scope of arbitral proceedings. That the appellants had meanwhile filed Arbitration Petition No.84 of 2005 in this Court challenging the judgment and award dated 9th November, 2004. The petition came to be disposed on 21st April, 2005 and the award was set aside. It was referred back to the same arbitrator to be decided afresh. The parties were permitted to file additional pleadings and permitted to lead oral and documentary evidence. The arbitrator partly allowed the claim directing the respondent to refund the entire amount recovered against the purchase order dated 27th April, 2000 and directed the respondents to adjust escalation amount, if paid, and that is how the award was impugned in Arbitration Petition Nos.281 of 2006 and 305 of 2006. Ms.Godse submitted that clause 2 of the purchase order provided that price applicable in accordance with directives of the Ministry and provided pursuant to an approved formula which was followed by the Indian Oil Corporation Ltd. (“IOCL”) for payment of supplies made earlier. Clause 3 of the purchase order provided for specific terms and conditions for escalation and de-escalation whereas clause 8 deals with validity.

15. According to Ms.Godse, all purchase orders are governed by the Ministry approved pricing formula and on the basis of a general circular dated 28th June, 1999 which did not have reference to any agreement and which cannot be relied upon to review price retrospectively. That all purchase orders refer to terms and conditions of supply agreement and the Ministry approved pricing formula and therefore, prices could not be fixed on the basis of the PWC report since it was not part of any of the terms and conditions of the supply agreements.

16. Ms.Godse further submitted that if it was found that the recovery made by the respondent corporation pending fixation of final price was bad in law, the appellant would be entitled to refund of the entire amount with interest and that the learned Single Judge ought to have confirmed that part of the award which was in favour of the appellant. According to the learned counsel the appellant was entitled to make entire claim since the arbitrator has recorded a specific finding that revised provisional price based on PWC report was not covered under any of the terms and conditions of Supply Agreement and therefore, the same was not in accordance with the price clause which mentions the Ministry's formula and which the learned arbitrator had approved. Ms.Godse further submitted that since the learned Single Judge has proceeded on the basis that deductions made and amount withheld by the respondent pursuant to the circular and letters of demand were unjustified, the only dispute to be decided was that of fixation of a firm price. Ms.Godse also submitted that the learned Single Judge did not take into consideration the finding specifically recorded by the arbitrator and the terms and conditions which were agreed between the parties and did not provide for adjustment and previous bills amounts on account of deescalation in price. The mere fact that the appellant had issued invoices after supplies was not an act of acquiescence on the part of the appellant and the respondent had no right to reopen the contract once payment has been made. She submitted that the learned Single Judge committed an error in not confirming the part of award whereby the arbitrator allowed the claim because the Single Judge accepted the finding of the arbitrator that the Ministry had not granted any approval about the final price. That the Single Judge should have remanded the proceedings to the arbitrator to decide the claim and fixed a price but had merely held that deductions made were unjustified. Having taken a view that deductions were unjustified, the price was required to be fixed and therefore the matter should have been remanded especially in view of the finding that no documentary evidence was produced to establish approval of the pricing formula by the respondent corporation.

17. Alternative submissions then made on behalf of the appellants included a request to adjourn the matter and remand the proceedings in order to do justice to the parties and prevent delay under section 34 (4) of the Act should have been read with section 34(1) and 34(2) under which the Court not only has vast powers to quash the award but at the material time also had the power to remand the matter. Furthermore, she submitted that the Court should have applied the principle of severability of the award and passed appropriate directions by allowing part of the claim. In this respect she relied upon the decision of R.S. Jiwani vs. Ircon International Ltd. 2010 (1) Bom.C.R.529. In this manner Ms.Godse submitted that the appeals are liable to be allowed.

18. In Appeal No.38 of 2007, the award of the sole arbitrator rejects all the claims of the appellant and the recoveries made by the respondent corporation under both purchase orders and held that set off made by HPCL as legal and valid and as per the contract between the parties and usage of the trade applicable to the transactions. Mr.Singh learned counsel on behalf of the appellant submitted that the dispute between the parties is basically about the interpretation of price fixation mandated by the Ministry. The basic facts are similar to other appeals, inasmuch as two purchase orders in question were dated 21st June, 1999 and 27th April, 2000. It is the case of the appellants that they had received payment for supplies of LPG cylinders as per prevailing formula under the purchase order dated 21st June, 1999. On 1st November, 2000 HPCL issued a letter relying upon the report by PWC that the revised price per cylinder would be Rs.645/- with retrospective effect from 1st July, 1999. It is contended on behalf of the appellant that retrospective action of revising the price of cylinders would have the effect of altering the rights of the parties after the purchase order was fully performed and the appellant shall stand discharged.

19. In view of letter dated 1st November, 2000, the differential amount of Rs.75,23,259/- was deducted in respect of cylinders supplied from 1st July, 1999 till 31st October, 2000 from the amount due under the second purchase order dated 27th April, 2000. As regards the purchase order of 27th April, 2000 the appellant has supplied cylinders but the respondent did not pay the agreed price of Rs.696.04 per cylinder and paid at the rate of Rs.645/- per cylinder despite objections raised. According to the appellant, the amount of Rs.76,92,125/- was due and payable on account of reduction of provisional price. After the reference was made, the arbitrator made award on 27th January, 2005 rejecting the claims filed by the appellant and holding that the contract between the parties and the reference would not empower the arbitrator to fix price of the cylinder. That the Arbitrator's role was limited and he was not empowered or required to fix price of the cylinder and that is how the award came to be challenged under section 34 of the Arbitration and Conciliation Act. The Arbitration Petition, however, came to be rejected vide the impugned order dated 13th September, 2005 after which the appeal was filed under section 37 of the Act which came to be rejected on the grounds of delay in filing the Appeal. A Civil Appeal was then filed in the Supreme Court which set aside the order of the High Court passed in the Notice of Motion No.3798 of 2006 in Appeal (L) No.921 of 2006, condoned the delay and remanded the matter for final adjudication. That is how the appeal came to be listed before this Court.

20. Mr.Nandakumar learned counsel for the appellants in Appeal Nos.246/2011 and 247/2011 submitted that in connected matters in the IOCL group, the Court had directed the Ministry to give a fresh hearing for fixation of price per cylinder and it would be determined by the Ministry. That order was obviously passed because the price of cylinder was never fixed by the Ministry because the same was provisional and it is in these circumstances that the IOCL has agreed for fresh hearing for fixation of the price per cylinder for the period of 1st July, 1999 till 31st March, 2001. Mr.Nandakumar submitted that the Oil “industry” consists of three respondents, namely, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. and that the price of cylinders is fixed by the Ministry after granting fresh hearing it would be applicable to entire oil industry. It was, thus, submitted that the act of the respondents in not having consented to agree to be bound by the price to be fixed by the Ministry was malafide. The submission on behalf of the appellant is that they may be permitted to join the hearing in the IOCL group of Appeals for fixation of the price per cylinder since price at all material times was shown to be provisional. In the course of submissions, it was contended that a critical letter dated 21st December, 2000 issued by the Ministry was not brought to attention of the Arbitrator and the Court and this letter was addressed by the Ministry to all oil marketing companies i.e. IOCL, HPCL, BPCL and IBP directing them to continue with existing cost plus system (formula) for procuring LPG cylinders till 31st March, 2001 and as a consequence the monies deducted would be repayable. It was submitted that non production of the letter dated 21st December, 2000 would render the award in conflict with the public policy of India, in contravention with the fundamental policy of Indian Law and in conflict with basic notions of morality or justice. That HPCL being in dominant position under the contract and suppression of the said letter dated 21st December, 2000 was the material and it hits at root of the matter. It is therefore submitted that the order of Single Judge and the award were liable to be set aside.

21. Mr.Nandakumar contended that the Single Judge had incorrectly recorded that the appellant could not have raised objections to reduction of price since reduction in price had already been objected to by their letters dated 6th February, 2001 and 3rd May, 2001. Although the order of learned Single Judge records the fact that the price was provisional it had inadvertently recorded that the provisional price was to be fixed by a “committee”. No such committee in existence but it was only that the Ministry that was to fix the price and the pricing formula was thus never fixed and for that reason there was no question of making any recoveries in respect of purchase order dated 21st June, 1999. He submitted that the Single Judge could not have set aside the award and rejected the claim but ought to have remanded the matter. The letter dated 21st December, 2000 is relied upon in this respect. Reliance was placed on the fact that the letter dated 21st December, 2000 was addressed to the Director (Marketing) IOCL by the Deputy Secretary of the Government of India and copies of which were marked to the Director (Marketing) HPCL, BPCL and IBP for necessary action. The letter clearly recorded that existing cost plus system for procurement of the cylinders would continue till 31st March, 2000 and in that sense the price is originally fixed albeit provisionally, at Rs.696.04 would apply. He therefore submitted that the appeals are therefore liable to be allowed.

22. On behalf of HPCL Mr.Siodia, learned counsel submitted that the first purchase order dated 21st June, 1999 was provisional and pending confirmation of the price, provisional rate was agreed upon is not a price finally fixed. The very purpose of incorporating a provisional price was that the price was to be based on some formula and till review of the said formula was carried out by the Industry Task Force along with PWC. The earlier formula of 1st April, 1994 was made applicable. Mr.Siodia submitted that clause 4 of the purchase order provided for escalation and de-escalation and BPCL as co-ordinator on behalf of Oil Marketing companies had informed “All Cylinder Manufacturers” with the firm prices would be advised to them on completion of the review by the Industry Task Force. Thereafter HPCL issued a change order dated 16th August, 1999 informing all concerned that the Industry Task Force was reviewing the Escalation Formula and therefore, firm prices were kept provisional from 1st July, 1999. The firm price was to be advised on completion of the review by the Industry Task Force. He stressed upon the fact that all other terms and conditions of the original order and change orders were to remain unchanged.

23. As far as the second purchase order dated 27th April, 2000 is concerned, the price was provisional. All other clauses of first purchase order were incorporated in the second purchase order and since the price was provisional and the firm price was to be decided by the Industry Task Force, the cylinder manufacturers are estopped from contending that price of Rs.645/- was unacceptable. The appellants, he contended have also supplied the cylinder at the rate of Rs.637/-. It is further submitted that HPCL had given credit or reimbursed the amount where the provisional price was lower than Rs.645/- per cylinder. The All India cylinder Manufacturers Association had agreed and admitted that they would pay the amount after finalisation of the report. Even the appellant M/s.Suburban Industries Ltd. in Appeal No.38 of 2007 wrote to HPCL asking for withdrawal of the demand pending finalisation of the review with a view to arrive at a firm price. Thus, the appellants were very much aware that the firm price would have to be arrived at and that they would be bound by it.

24. On 31st March, 2001 BPCL had once again written to all Cylinder Manufacturers informing them that the pricing review had been completed and inviting them for a presentation. In the meeting a copy of the report was handed over to the manufacturers who were present from which it became evident that the price as recommended has to be paid. According to Mr.Siodia the appellant had supplied cylinders even at Rs.575/- per cylinder and hence the award was fully justified and the arbitrator was not required to make any determination of price.

25. In Appeal No.246 of 2011 Mr.Siodia submitted that the purchase orders were identical and the awards are also identical. All terms being same, he submitted that the Single Judge set aside the award mentioning the fact that the arbitrator failed to notice the fact that only the terms, other than those relating to the price, were to remain unchanged. The price stipulated in the purchase order dated 21st June, 1999 was altered by the change order which was admittedly accepted by the respondent and the arbitrator proceeded on erroneous basis contrary to the express terms of the Agreement. Reference was made by the Single Judge to the second sentence in paragraph 15(e) of the award which was described as a result of the arbitrator having proceeded on erroneous basis.

26. Mr.Siodia has relied upon reasoning of the arbitrator which inter alia observed that HPCL should obtain approval of the Ministry before making any change in pricing formula and the formula itself was under review. Mr.Siodia therefore submitted that the appeals do not call for any interference. Mr.Siodia further submitted that even in the purchase order dated 27th April, 2000 the price was provisional and based on escalation formula approved by the Ministry. Vide further change order dated 23rd October, 2000 the price was revised to Rs.637.73 per cylinder and yet again to Rs.637.17 by change order dated 27th March, 2001. Thereafter on 31st October, 2000 IOCL addressed a letter to all cylinder manufacturers informing them that the differential amounts towards revision in price of cylinder to Rs.645/- will be recovered from current bills. Mr.Siodia submitted that in response thereto on 1st November, 2000 All India LPG Cylinder Manufacturers Association addressed a letter to the respondent HPCL informing that they are committed to pay the recovery after finalization of the report and they requested HPCL to make recovery in phased manner. On 15th November, 2000, HPCL addressed a letter to the All LPG Cylinder Manufacturers Association that differential amounts towards revision in price will be recovered from future bills subject to final adjustment. Meanwhile in January 2001 PWC issued their report, Terms of Reference being reviewing the elements of the existing LPG cylinder pricing/escalation and de-escalation formula and recommendation of changes, if any, required.

27. On 23rd February, 2001 the BPCL informed the Ministry enclosing copy of PWC's report, requesting the Ministry to approve the report for implementation by the industry. On 15th March, 2001 the Ministry responded by stating that oil industry may take appropriate action.

28. In our view, there is no decision on this aspect by the Ministry nor can be response dated 15th March, 2001 treated as approval of the PWC report. On 30th March, 2001 the BPCL once again addressed a letter to All India Cylinder Manufacturers regarding sharing of recommendations. Thereafter several meetings were held between the Representatives group of Cylinder Manufacturers inter alia with the Industry Task Force, BPCL and IOPCL. Finally on 24th May, 2002 a committee of functional directors of the HPCL held a meeting at which PWC report for revision of cylinder price effective from 1st July, 1999 was approved and adopted but the minutes record it was subject to industry members IOCL and BPCL also accepting the PWC report. The minutes also record that the committee had noted that if the arbitrations which were then underway not resulting in awards favourable to HPCL a suitable proposal would be put up before the Committee of Functional Directors for further directions. It is on this basis that Mr.Siodia contended that PWC report had been agreed as standard. Thereafter disputes and differences were referred to the arbitration.

29. In Appeal No.247 of 2011 the material dates are similar to the case of Appeal No.246 of 2011. Appeal No.247 of 2011 is filed by M/s.GDR Cylinders Pvt. Ltd. The purchase orders are also of the same date as in Appeal No.246 of 2011 except for date of change order numbers. The provisional pricing communicated including reliance on the report of PWC are identical in the case of Appellant in Appeal Nos.246 of 2011 and 247 of 2011. Thus, in case of Appeal No.247 of 2011 M/s.GDR Cylinders Pvt. Ltd. also ultimate decision of the HPCL is to implement PWC's report and for implementation of the same, subject to industry members IOCL and BPCL accepting the PWC report. Furthermore, the contention that if the arbitration proceedings did not result in the award in favour of the HPCL a suitable proposal was to be put up before the Functional Directors.

30. Mr.Siodia relied upon a communication dated 12th March 2013 addressed by the HPCL dated 12th March, 2013 and 16th April, 2013 addressed to M/s.GDR Cylinders Pvt. Ltd. and M/s.Prathima Industries Pvt. Ltd. respectively in response to request for reference to arbitration and nominated a sole arbitrator as on that date. The decision of Committee of Functional Directors was in place. As far as the PWC's report is concerned, Mr.Siodia relied upon recommendations in the report. The decision of the Committee of Functional Directors dated 24th May, 2002 has also been relied upon by the HPCL in case of Appeal Nos.365 of 2011 and 366 of 2011 filed by M/s.Prathima Industries Pvt. Ltd. The recommendations in PWC's report were therefore to be considered by all players.

31. We have heard learned counsel for the parties at length and have with their assistance perused the impugned orders. It is necessary to observe that the purchase orders are all similar in nature. The approach of Arbitral Tribunal in each of these cases therefore rendered all similar facts. The common factor that runs through all these matters is the fact that price was provisional and the firm price was to be decided by the Industry Task Force. Much reliance has been placed on behalf of the appellants on their contentions that all conditions of the purchase order except the price are ultimate release, once the price is declared provisional and the parties have acted upon they will have to give sufficient reasons for deviation from terms which were otherwise agreed and which were to be treated as final. In the present case the issue is therefore limited to whether the orders of learned Single Judge are liable to be interfered with.

32. We have already seen that the purchase orders made reference to the terms and conditions in the Annexures. The Annexure provided for Price, Yield/Metric Ton, Stockyard Escalation/De-escalation, Quantity, Excise duty and Sales Tax on cylinders. Attachment No.II contains general terms and conditions. The price of the cylinder was provisional. It cannot be disputed that the price was proposed to be reviewed and the final price was to be determined based upon the decision of the Industry Task Force. Although the respondent called for submission of the steel price with a break up showing all charges paid separately, all of these different elements would eventually merge into price. Since the disputes had arisen , the fact that recovery made could be from pending bills was not unanticipated. In this behalf we find considerable force in the submissions made by Mr.Siodia that HPCL had issued change order informing all concerned that the formula was reviewed and prices were provisional from 1st July, 1999. The clauses under first purchase order having been included in the second purchase order also contemplates a provisional price. It is further seen that on 31st March, 2001 the Cylinder Manufacturers' Association was informed that pricing was under review. Although there is some controversy as to whether all appellants were members of that Association this need not engage our attention at this stage. The contracting parties were put to notice that there was likely change in pricing and what is pertinent to note is that in response to communication from IOCL to the Manufacturers Association intimating that excess amount paid were recovered. The Manufacturers Association confirmed and requested the HPCL to make recovery in a phased manner. Thus, it is not possible to accept the contention that Cylinder Manufacturers were taken by surprise.

33. Perusal of the Arbitral Award in the matter of M/s.Lite Containers Pvt. Ltd. M/s.GDR Cylinders Pvt. Ltd. and M/s.Prathima Industries Pvt.Ltd as well as other parties reveal t

hat the awards are similarly structured. After considering the pleading the arbitrator has proceeded to analyse the terms and conditions of the purchase orders including provisions regarding price escalation, excise duty and payment in both the purchase orders. He observed that the contracting parties had agreed upon the price determination mechanism. The purchase orders were held to be independent and separate. After considering the change orders, the judgment was held that there was no provision in any of the change orders to the effect that the basis of finalising the price would be anything other than the new pricing formula approved by the Ministry. The Tribunal held that the recoveries made by the respondents were not valid. The Awards considered express provisions of the purchase orders as regards price and it proceeded to hold that all terms and conditions of the original order remained unchanged. One crucial factor that the arbitrator failed to notice is that all terms and conditions other than the price was to remain unchanged. Since the price was provisional the arbitrator had proceeded on an erroneous understanding of the contract. The impugned order has found that the error was fundamental and we have no hesitation in agreeing with the finding of the learned single Judge. Having come to the conclusion that the arbitrator had proceeded on this erroneous basis there was no occasion to sustain the award. 34. The award as far as M/s.Prathima Industries Pvt.Ltd. is concerned the impugned order has proceeded on the same basis. In the case of M/s.Prathima Industries Pvt. Ltd. award is differently worded in view of the fact that a reference is incorporated to the order of the High Court in the Arbitration Petition No. 84 of 2005 whereby the award was set aside and the matter was remanded to the arbitrator. Upon remand the arbitrator considered the claim on the same basis as in the case of M/s.Lite Containers Pvt. Ltd and M/s.GDR Cylinders Pvt. Ltd. and held that he could not find any change order whereby price was subject to revision and committed the same error as in the case of awards in Lite Containers Pvt. Ltd. And GDR Cylinders Pvt. Ltd. and therefore arrived at an erroneous conclusion based on incorrect interpretation of the contractual provisions as in relation to the price. 35. In the case of Suburban Industries Ltd. the Arbitral tribunal concluded that the contract did not empower the tribunal to fix the price and in this respect the tribunal found that the revision of price was contemplated by the terms of the contract and held appellant were not entitled to any refund. The finding was to the effect that purchase orders clearly mentioned the fact that the prices were provisional and in accordance with these terms. The amounts recovered from the appellants were legal and valid. In light of these facts the Arbitral tribunal rejected the claim that this was upheld by the impugned order which clearly reiterates the view that the price mentioned in the contract was provisional price and the final price was to be determined in accordance with the contract. The impugned order further holds that the conclusion of the arbitral tribunal was in consonance with the terms of the contract. We see no reason to take a different view in view of what has been set out above. The impugned orders in our view do not call for an interference and same is therefore sustained. 36. Before parting with the judgment, we wish to deal with the submission by appellants' counsel that we may refer the matter of price determination to the Ministry and direct the Ministry to fix the price. Given the fact that the bargain between the parties in this set of appeals did not provide for reference to the Ministry, unlike the group of matters pertaining to supplies made to Indian Oil Corporation Limited, we are unable to accede to the appellants request to refer the issue to the Ministry. 37. For all the above reasons we pass the following order : (i) The Appeals no. 246 of 2011, 247 of 2011, 365 of 2011, 366 of 2011 and 38 of 2007 are dismissed. (ii) There shall be no order as to costs.