JUDGMENT :

ROHIT B. DEO, J.

1. Heard Mr. W.T. Mathew, the learned counsel for the appellant and Mrs. Pranita Choube h/f. Mrs. Anjali Joshi, the learned counsel for the respondent. The short question involved in this appeal under section 37 of the Arbitration and Conciliation Act, 1996 (“Act” for short) is whether the Principal District Judge, (“PDJ”) Nagpur erred in setting aside the Arbitral Award dated 30.9.2004 on the premise that the arbitrator ignored the contractual terms and conditions and that the Arbitral Award falls foul of the substantive law of the land.

2. Only those facts which are absolutely necessary to decide the issue involved, need be stated.

3. The Defence Estates Officer (“DEO”) representing Ministry of Defence, Government of India, is the claimant, who sought the relief of forfeiture of security deposit and imposition of penalty from the arbitrator.

4. The genesis of the arbitration is Tender Notice dated 1.12.2000, issued by the claimant, inviting offers for grant of licence for removal of sand from the Kanhan River Bed, within the jurisdiction of Kamptee Cont