SANJAY KISHAN KAUL, J.

( 1 ) (1)THE plaintiff is a private limited company incorporated and registered under the Companies Act, 1956 and is engaged in the business of sales and purchase of computers and network products. The defendant no. 1 is a limited company dealing in supplying computers and network products.

( 2 ) THE plaintiff approached defendant no. 1 with a request for supply of computers and placed an order dated 02. 07. 1996 for supply of 33 computers of pentium 100 with Intel CPU at the rate of Rs 45,662 for each computer totalling to a value of Rs 15,06,850/ -. The plaintiff paid a sum of Rs 10 lakhs as advance towards the execution of the said order with the condition that defendant no. 1 would secure the said amount by way of a bank guarantee. The purchase order was signed both by the plaintiff and defendant no. 1 incorporating the terms and conditions between the parties.

( 3 ) IN view of the arrangement arrived at between the plaintiff and defendant no. 1, the defendant no. 1 requested defendant no. 2 to issue a bank guarantee in favour of the plaintiff to secure the advance deposit. The defendant no. 2 thus issued a bank guarantee bearing no. 25/35 dated 10-07-