M. K. SHARMA ( 1 ) THE petitioner herein was awarded a Contract for development of land at Vasant Kunj, Sector A. The aforesaid Contract contained an Arbitration Clause, namely. Clause 25. In respect of the aforesaid Contract, disputes arose between the parties and accordingly in terms of the provisions of Clause 25 of the Contract, the Engineer Member D. D. A. , appointed respondent No. 2 as the Sole Arbitrator to adjudicate the disputes between the parties. ( 2 ) THE Arbitrator after receiving evidence produced by the parties and after hearing them made an award, which has been filed in this Court, in pursuance of a petition filed by the petitioner under Section 14 and 17 of the Arbitration Act, registered as Suit No. 391/1994. As against the aforesaid award made by the Arbitrator and filed in this Court, the respondent No. 1 filed an objection. The respondent No. l, the Contractor also filed a petition under Section 14 of the Arbitration Act, which was registered as Suit No. 292/1994. ( 3 ) I have heard the learned counsel appearing for the parties in respect of the aforesaid objection filed by the Contractor and by this order, I propose to dispose of the objection as well as the two suits filed in this Court. ( 4 ) THE objection of the Contractor is in respect of Claim No. 2, in which the Contractor claimed a sum of Rs. 7,500. 00 on account of security deposit. The Arbitrator disallowed the aforesaid claim on account of forfeiture of security deposit by the respondents on the ground that the said forfeiture was as per the terms and conditions of the Agreement after due process of law which is an excepted matter under Clause 25. The counsel appearing for the petitioner/contractor submitted before me that the power and jurisdiction of the respondents to forfeit the security deposit is provided for under Clause 3 of the Agreement, wherein it has been provided that if the Contractor has made himself liable for action under any of the Clauses, the Engineer-in-Charge on behalf of Delhi Development Authority would have powers to determine or rescind the Contract of which termination or rescission notice in writing to the Contractor under the hand of Engineer-in-Charge would be conclusive evidence. It is further provided that upon such determination or rescission, the security deposit of the Contractor would be liable to be forfeited and would be absolutely at the disposal of the Delhi Development Authority. ( 5 ) IN the present case, it is submitted that upon termination of the Contract, the respondents forfeited the security deposit, which action was challenged before the Arbitrator. It is submitted that the Arbitrator committed an error apparent on the face of the records in holding that the aforesaid forfeiture of security deposit by the respondent is an excepted, matter under Clause 25. ( 6 ) ON the aforesaid proposition, I also heard the learned counsel appearing for the respondents. On careful consideration of the provisions referred to above, namely, Sub- Clause (v) of Clause 3, I find that, although power and jurisdiction to forfeit the security deposit is vested with the respondents, but, the same cannot be said to be an excepted matter in view of the fact that the aforesaid provisions, nowhere mentions that the decision of the respondents is final and binding. In that view of the matter and on careful consideration of the said Clause, I am of the considered opinion, that the parties never intended that the aforesaid provision of vesting power with the respondents to forfeit the security deposit would be an excepted matter under Clause 25. ( 7 ) THE learned counsel appearing for the petitioner, further submitted that the action of the respondents in forfeiting the security deposit of the petitioner was in the nature of penalty and, therefore, the provisions of Section 74 of the Contract Act applies. He further submitted that where under the terms of the Contract, the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid as security for guaranteeing due performance of the Contract to the party complaining of the breach of the Contract, the undertaking is of the nature of a penalty. He further submitted that since in the present case, loss in terms of money could be determined, the party claiming compensation has to prove the loss suffered by it and in absence of such proof of loss and/or damage suffered by the respondents, the Arbitrator could not have disallowed the claim of the petitioner. He further submitted that since in the present case, loss in terms of money could be determined, the party claiming compensation has to prove the loss suffered by it and in absence of such proof of loss and/or damage suffered by the respondents, the Arbitrator could not have disallowed the claim of the petitioner. ( 8 ) ON careful perusal of the award passed by the Arbitrator, I find that since he held that the condition of forfeiture of security deposit by the respondents is an excepted matter under Clause 25, he had no occasion to consider whether any damage or loss was required to be proved by the respondents and if so, whether in fact, such damage or loss was suffered by the respondents or not. The conclusion of the Arbitrator that the forfeiture of security deposit by the respondents is an excepted matter under Clause 25 is apparently an error apparent on the face of the records and, therefore, I set aside the said part of the award passed by the Arbitrator and remit back the same to the Arbitrator for re-consideration of the claim in accordance with law. ( 9 ) THE next objection raised by the petitioner in respect of the award passed by the Arbitrator with regard to counter claim No. 1 of the respondents was in respect of levy of compensation of Rs. 23,428. 00 under Clause 2. The aforesaid counter claim is based on levy of compensation by virtue of operation of Clause 2 by the competent authority in terms of the Contract. The Arbitrator allowed a sum of Rs. 23,428. 00 in respect of the aforesaid claim in favour of the respondents for due deduction from the claim of the claimants from the final bill. ( 10 ) THE learned counsel appearing for the petitioner submitted before me that Clause 2 is an excepted matter under Clause 25 and, therefore, the Arbitrator had no jurisdiction to decide the aforesaid claim. I have heard the learned counsel appearing for the respondents. The counsel admits that the provisions of Clause 2 are excepted matter under Clause 25 and, therefore, outside the jurisdiction of the Arbitrator. Thus, the Arbitrator committed an error apparent on the face of the records in allowing the claim of the respondents to the tune of Rs. 23,428. I have heard the learned counsel appearing for the respondents. The counsel admits that the provisions of Clause 2 are excepted matter under Clause 25 and, therefore, outside the jurisdiction of the Arbitrator. Thus, the Arbitrator committed an error apparent on the face of the records in allowing the claim of the respondents to the tune of Rs. 23,428. 00, in favour of the respondents for due deduction from the claims of the claimants from the final bill as levy of compensation, although the same is an excepted matter under Clause 25 and outside the jurisdiction of the Arbitrator. Since the arbitrator has committed an error apparent on the face of the records in giving the aforesaid award, the said award is set aside holding the same to be an excepted matter and not within the jurisdiction of the Arbitrator to try and decide the same. ( 11 ) THE objection filed by the petitioner stands allowed to the extent indicated above. Both the suits and the objections stand disposed of in the aforesaid terms. Since by this order I am remitting back claim No. 2 of the petitioner to the Arbitrator for re-consideration, let the Arbitrator decide the same claim as expeditiously as possible, preferably within a period of four months from the date of receipt of a copy of this order and after issuing notice to the parties. There shall be no order as to costs.