( 1 ) THIS appeal under Section 39 of the Arbitration Act is directed against the refusal to set aside an award and also against the decree which was passed in terms of the award by the Additional District Judge, Balaghat.

( 2 ) RIGHTS to collect and propagate lac in Patwari Circles No. 42 and 2 of Waraseoni tahsil were auctioned for a period of three years on the 3rd October and the 4th october, 1951, respectively. The highest bids of Pannalal (hereinafter called the contractor) for Rs. 21000/- and Rs. 20000/-respectively were accepted. Pannalal deposited Rs. 500/- as earnest money for each contract. He also deposited Rs. 5500/- on the 15th October, and Rs. 661/-on the 21st November, on account of the first; and Rs. 6667/- on the 21st November on account of the second. However, the contractor did not work the contract. The case for the contractor is that the department did not enter into a written agreement as required by Article 299 of the Constitution, so that he rescinded it and asked for the refund of the deposited amount. The case for the department was that the contractor was not willing to execute an agreement and work the contract. Eventually the matter was