Commentary
Manjushree is the Bodhisattva who holds the flaming sword [Skt. Khadga] of enlightenment, by his left hand in a warning( Tarjani) hand gesture ( Mudra) in his left hand representing his realization of wisdom to cut through ignorance & wrong view. His right hand depicted in teaching (Jnana Mudra) holds the stem of a Blue Lotus (Utpala) flower upon which rests the Book (Pustaka) of Perfection of Transcendental Wisdom. The blue lotus is a symbol of the victory of the spirit over the senses and signifies the wisdom of knowledge. This represents the lotus that he obtained from the middle of the lake in the Kathmandu Valley out of which grew a lotus bearing a Blue Flame which represents wisdom. Manjushree sits upon a moon disc upon a lotus with an elongated stem arising from a lake. He wears a gold diadem fitted with precious jewels. He wears a silk scarf fastened at the waist and over this, a softly glowing green scarf decorated with golden motifs. His head is silhouetted against a nimbus. The lotus he is sitting on has an elongated stem and arises from a lake representing his recovery of the blue flame of transcendent wisdom and the teaching he originated. The white sash is the attire of the Vajrayana school of Buddhism.

According to legend, Manjushree founded the Nepalese civilization. In ancient times, way before Buddha Shakyamuni the Kathmandu Valley was a vast lake. The Buddha Vipashyin came to Nepal to meditate on the hill above the lake. Wishing to give the rough mountain people an object of worship, Vipashyin threw a lotus seed into the lake. When this lotus bloomed, a blue flame of wisdom light shone from the center of its thousand petals. This light was called the Swayambhunath Dharmadhatu, the Self-Sprung Infinite Field of Light, and the flame of the enlightened mind of the primal Buddha, Vajradhara burned at its center. The light of Vajradhara also emanated in the colors of the rainbow and in each of the five colors appeared one of the Five Buddhas - Vairochana, Akshobhya, Ratnasambhava, Amitabha, and Amoghasiddhi. Then Manjushri went to Nagarkot Peak on the edge of the lake, and after having pondered in Samadhi how best the lake may be drained, with his keen-edged sword of wisdom he cut three Gorges. After the lake had been drained and the Valley bottom made suitable for cultivation Manjushree founded the city of Patan which was originally called Manjupattan. He taught the people many things. Manjushree manifests himself in the form of Yamantaka, known also as Vajrabhairava in order to overcome the lord of Death, Yama.
The Book (Pustaka) represents Transcendent Wisdom which came to be embodied by the Dyani {Pancha} Buddha Families. The book symbolically contains Buddhist teaching that had been lost to mankind & which was revealed to Manjushree. The book is commonly mistaken for the Prajna Paramita which was written by many hands between 100 & 200 CE realizing the Boddhisattva Principle. The book of Manjushree alludes to Wisdom and the emanation of the Five Transcendent Buddha Families. These are Vairochana, Akshobhya, Ratnasambhava, Amitabha & Amoghasiddhi. Wisdom Energy is a power that can extinguish the Five Negative afflictions. Each family heads wisdom and energy to overcome these Five hindrances to enlightenment which are greed, hatred, delusion, jealousy & pride.