1. This is a suit for damages for breach of contract. The plaintiffs is a company registered under the Companies Act, 1956 and is a Government of India undertaking. The principal business of the plaintiffs is to act as Canalising Agent for import and supply of foreign cotton to Indian Textile Mills. A Circular dated 12th March 1977 was issued by the plaintiffs to all textile mills in India including the defendants, inviting offers for purchase of Global Cotton proposed to be imported by the plaintiffs of the varieties and at the rate mentioned in the said Circular. In response to the said circular, the defendants-a company registered under the Companies Act who owns Textile Mill at Rajaji Nagar, Bangalore, by its letter dated 22nd March 1977 furnished their requirement of global cotton of 300 bales of Orleans/Texas Cotton and 300 bales of Sudan Acala Cotton R.G.. Besides sending the said letter, the defendants had sent Telex dated 22nd March 1977 requesting the plaintiffs to register their aforesaid requirement of cotton. The defendants by the said letter requested the plaintiffs to confirm the said booking. It is the case of the plaintiffs that pursuant to the said re