PRADEEP NANDRAJOG, J

1. Pertaining to supply of cables the respondent was bound by the General Conditions of Contract and vide condition No.4, under the caption ‘Performance Security’, was obliged to furnish ‘The Performance Security Bond’ in the form of a bank guarantee issued by a Scheduled Bank as per proforma provided in Section IX of the bid documents.

2. The proforma of the Security Bond, relevant part, reads as under:

‘In consideration of the President of India (hereinafter called the Government) having agreed to exempt ____ (hereinafter called the contractor) from the demand under the terms and conditions of an agreement/(Purchase Order) No._______________ dated _______ made between ______ and _________ for _________ for the supply of ______ (hereinafter called the said agreement) of security deposit for the due fulfillment by the said contractor of the terms and conditions contained in the said agreement on production of a bank guarantee for ___ we, (name of the Bank)______ (hereinafter referred to as the Bank) at the request of ______ (contractor), do hereby undertake to pay to the Government an amount not exceeding ______ against any loss or damage caused to or su