JUDGMENT

Mrs. Sujata V. Manohar, J.-The appellant, Rajasthan Co-operative Dairy Federation Ltd., issued an advertisement inviting applications for selling agents for its various products for the territories of Rajasthan, Punjab, Haryana, Himachal Pradesh and Delhi, on or about 19th of November, 1988. Seventy applications were received by the appellant. Ultimately, on 1st June, 1990, a Letter of Intent was issued by the appellant in favour of respondent No. 1 for appointing respondent No. 1 as the selling agent of the appellant for marketing of Saras Brand Dairy Products, inter alia, on the following terms :

"(1) that you will sign an agreement on non-judicial stamp paper of Rs. 5 with RCDF and this arrangement will be enforceable from the date legally executed contract has come into being.

(2) ........

(3) .........The goods will be issued to you against irrevocable bank guarantee on furnishing from schedule bank on 15 days credit basis....(sic).

You are requested to submit irrevocable bank guarantee for an amount of Rs. 15 lacs in favour of RCDF, Jaipur.

This letter duly signed by you must reach GM(M&P) by 5th of June, 1990 and call on us for execution of the agreement on 12.6.1990 (sic