JUDGMENT

Vibhu Bakhru, J. - The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the 'A&C Act') impugning an arbitral award dated 31.05.2019 (hereafter the 'impugned award') rendered by an Arbitral Tribunal comprising of a Sole Arbitrator (hereafter the 'Arbitral Tribunal').

2. On 17.07.2008, the petitioner floated a tender bearing no. U.II.708(A)/2008-09-PROC-(NDRF) inviting bids for supply of 288 numbers of Boat Assault Universal Type (hereafter 'BAUT') and 288 numbers of 50 HP Out Board Motor (hereafter 'OBM'). In response to the same, the respondent submitted its bid and was declared as the lowest bidder.

3. Subsequently, on 17.07.2009, the parties entered into an agreement bearing number U.II.708(A)/2008-09-PROC-(NDRF)-II for supply of 288 numbers of BAUTs and 288 numbers of OBMs (hereafter the 'Agreement') at a consideration of ?16,87,79,520/-. The respondent was liable to pay inspection charges quantified at 2% of the said contract value along with applicable service tax as levied by the Inspecting Agency under the Directorate General Quality Assurance, Ministry of Defence (hereafter 'CQAE').

4. In terms of the Agreement, the respondent was required to submit two pilot samples of the BAUTs and OBMs within a period of two months from the date of the supply order, that is, by 15.09.2009. However, the respondent was unable to comply with the deadline due to various reasons, which it stated were beyond its control. By its letter dated 03.09.2009, it sought extension of one month to submit the two pilot samples. The petitioner accepted the same and by its letter dated 15.09.2009, extended the time till 15.10.2009. On 08.10.2009, the pilot samples were delivered and was received by the CQAE on 12.10.2009.

5. Thereafter, by its letter dated 21.10.2009, the CQAE raised concerns in respect of the pilot samples delivered by the respondent on the ground that the same was submitted after the expiry of the stipulated delivery period. However, in response to the said letter, the respondent informed the CQAE that the petitioner had already extended the time period for delivery of the pilot samples and further, requested the petitioner to issue a formal delivery period extension to the CQAE. The respondent informed the CQAE that it had provided the raw material test specimen and further assured it, that a delivery inspection would be submitted within a period of ten days.

6. The CQAE rejected the pilot samples submitted by the respondent due to certain discrepancies in some materials and informed the same to the respondent by its letter dated 15.03.2010. The respondent requested the CQAE to re-test the pilot samples and the said request was accepted by the CQAE on 15.04.2010. On 28.04.2010, the respondent also provided fresh samples, however, it was found that the same did not conform to the specifications.

7. On 21.12.2010, the respondent submitted fresh samples for evaluation by the CQAE and the pilot samples were finally approved by the CQAE on 24.03.2011. Accordingly, the respondent received clearance for bulk production. The CQAE, by its letter dated 24.03.2011, informed the petitioner to issue re-fixation of the bulk delivery period till 24.09.2011 in terms of Clause 9(ii) of the Agreement. On 04.04.2011, the respondent, once again, requested the petitioner to