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With the win, Royal Challengers now have 12 points with two more matches in hand. Super Kings remain at the second position with 13 points.
Winning the toss and deciding to bat, Chennai were bundled out for lowly 129 in 19.4 overs with Matthew Hayden (60) doing bulk of the scoring. Challengers skipper Anil Kumble (2-12) led a disciplined bowling attack to restrict Royal Challengers.
Bangalore survived a top-order collapsed through Ross Taylor (46) and Virat Kohli (38) before Praveen Kumar (12 not out) and Vinay Kumar (6 not out) bailed them out in tense last two overs.
With five runs required in last over, Bangalore reached the target with two balls to spare.
Bangalore were off to a disastrous start, losing Jacques Kallis for a duck in the second ball of the match when he was trapped in front by Albie Morkel. They were reduced to 12 for two in the next over when Morkel struck again, the batsman this time being Rahul Dravid. Robin Uthappa's departure in the fifth over left Bangalore tottering for 30-3.
But Kohli and Taylor joined forces for 56-run partnership and brought Bangalore back in the match.
Super Kings sensed an opening with the departure of Kohli in the 15th over and Mark Boucher's dismissal in the successive over of Muttiah Muralitharan.
However, Taylor kept scoring at one end and looked well settled to close the match but he misread a Jacob Oram (2-12) delivery to be caught behind by Dhoni.
They needed 17 runs from 12 balls when Praveen hit a six off Balaji with 12 runs coming in the 19th over.
Taylor was out to Oram's first ball in the final over but Vinay saw the team through.
Bangalore Royal Challengers took wickets at regular intervals to put pressure on the Super Kings. The one man, however, they failed to tame was Orange Cup holder Hayden.
Hayden hammered yet another impressive knock of 60 off 38 balls which included five fours and three sixes.