S. MURALIDHAR J.:—

1. The Petitioner Bharat Sanchar Nigam Limited (‘BSNL’) has in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) challenged an Award dated 1st June 2006 passed by the learned sole Arbitrator in the dispute between it and the Respondent Himachal Futuristic Communications Limited (‘HFCL’), formerly known as Himachal Telematics Limited (‘HTL’), arising out of a Purchase Order (‘PO’) dated 22nd February 1996 for supply of 148 numbers of 4/36 MARR systems in UHF range along with accessories. By the impugned Award the sole Arbitrator held that HFCL was entitled to be paid the differential amount subject to deduction of 5% Liquidated Damages (‘LD’) for supplies made during the extended delivery period as claimed by HFCL together with simple interest at 6% per annum from the date when payment became due till the actual date of payment. HFCL was also held entitled to the return of the Performance Bank Guarantee (‘PBG’) dated 11th December 1995 for a sum of Rs.42 lakhs.

Background Facts

2. A tender was invited for procurement of 1125 systems each of 2/15 and 4/36 analog MARR system of UHF band along with accessories by the BSNL. T