Judgement PATNAIK, J. :- In this appeal, the appellants have challenged the judgment and order dated 9-6-98 of the learned single Judge in Civil Rule No. 660/97 allowing the writ petition filed by the respondent and directing the appellant-authorities to refund the amount of Rs. 8,06,000/- to the respondent within a period of two months with interest. 2. The facts briefly are that by a notice dated 7-4-97, the appellants invited tenders for appointment of transport contractor for transportation of food grains/sugar/allied materials from Railhead/SFD, Dharmanagar to Godown complex, Agartala on regular basis. In the said tender notice, it was inter alia stipulated that the last date for receipt of tender was 7-5-97 up to 1.00 p.m. and that the tender was to remain open for acceptance up to and inclusive of 22-6-97. It was further stipulated in the said tender notice that the Senior Regional Manager, Food Corporation of India, North East Frontier Region, Shillong might at his discretion extend that day by a fortnight and such extension would be binding on the tenderer. The tender notice further stipulated that the tender form must be accompanied by an earnest money of Rs. 8,06,000/- and that the earnest money would be liable to forfeiture if the tenderers after submitting their tenders resiled from or modified their offer and/or the terms and conditions in any manner. In response to the said tender notice dated 7-4-97, the respondent submitted his tender on 7-5-97 along with a call deposit of Rs. 8,06,000/- only drawn on United Bank of India, Agartala as earnest money. On 20-6-97, the Senior Regional Manager sent a telegram to the tenderers extending the validity of the tender by another 15 days up to 7-7-97. But before 7-7-97, the respondent sent a letter dated 5-7-97 to the District Manager, Food Corporation of India which was to the following effect : "To The District Manager FCI Ltd. Tripura,Agartala (AA Road, Banamalipur) Re.: Tender vide No. F.9 (NEFR/HTC/DMR-AGT/97 dated 7-4-97 - Tender Filed on 7-5-97 at Shillong. Relating to Transportation of FCI grains, sugar, allied materials from FSD, DMR to godown complex, Agartala Dear Sir, Your kind attention is invited to the above Tender. On 7-5-97 I have filed my tender with observing EMD, and other papers as usual. Relating to Transportation of FCI grains, sugar, allied materials from FSD, DMR to godown complex, Agartala Dear Sir, Your kind attention is invited to the above Tender. On 7-5-97 I have filed my tender with observing EMD, and other papers as usual. On opening of the tender on the same 7-5-97 I have observed that through oversight my rates were written on your APPENDIX-VIII of the tender in Clause Serial 2.(iii), instead of Clause Serial 2.(i). On the next day i.e. on 8-5-97 I have verbally consulted the matter with the R.M. FCI, at Shillong as the SRM, FCI was not present in the Station H.Q. verbally and he has given verbal consent not to give any further intimation of this oversight mistake due to tension of journey by Transport from Agartala to Shillong. In the premises, kindly treat my tendered rate by treating the same as quoted rate in Cl. 2 (i) and by withdrawing the rate from Sl. 2 (iii) which was quoted due to oversight and treat the rate as above in percentage which will be found quite suitable as per present market rate prevailing in the country. As such I request you to kindly accept the tender as it was lowest and by noting the rate in Appendix-VIII in Sl. 2 (i) i.e. above percentage quoted rate by waiving of the rate which was done (through) oversight in Sl. 2 (iii) And for this act of your kindness, I shall remain ever grateful to your honour. Yours faithfully, Sd/- (Sujit Roy)" Thereafter, in August, 1997 the respondent sent a Fax to the General Manager, Food Corporation of India, Zonal Office at Guwahati that after expiry of the validity period of 60 days he was not willing or agreeable to keep his tender valid or open for further period and requested him to release his earnest money as no decision was taken within 60 days validity period. By a letter dated 26-11-97, however, the respondent was informed by the Senior Regional Manager that the earnest money of Rupees 8,06,000/- furnished by the respondent along with the tender stood forfeited by the competent authority in accordance with Clause 4 of the terms and conditions of the tender. The respondent then served a notice dated 3-12-97 to the Senior Regional Manager, Regional Office, Food Corporation of India, NEF Region, Shillong to refund the said sum of Rs. The respondent then served a notice dated 3-12-97 to the Senior Regional Manager, Regional Office, Food Corporation of India, NEF Region, Shillong to refund the said sum of Rs. 8,06,000/- along with interest @ 18% per annum failing which he would take recourse in a competent Court of law. When the amount was not refunded, the respondent filed Civil Rule No. 660/97 and the learned single Judge after hearing the parties allowed the writ petition and directed refund of the said amount of Rs. 8,06,000/- with interest. Aggrieved by the said judgment and order of the learned single Judge, the appellants have preferred this writ appeal. 3. Mr. S. Deb, learned senior counsel appearing for the appellants, contended that the writ petition filed by the respondent was not maintainable as the rights of the parties were in relation to a contract. He placed reliance on the decision of the Supreme Court in Har Shankar v. Dy. Excise and Taxation Commr., (1975) 1 SCC 737 : ( AIR 1975 SC 1121 ), in which it was held that the writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligations voluntarily incurred. He submitted that since under Clause 4 of the tender notice, the respondent as a prudent businessman keeping all his eyes open agreed to furnish earnest money of Rs. 8,06,000/- which was liable to be forfeited if he resiled from or modified his offer and the terms and conditions thereof in any manner, he could not now approach this Court under Art. 226 of the Constitution against the decision of the appellants to forfeit his earnest money for modifying his offer by letter dated 5-7-97. Mr. Deb also cited the decision of the Supreme Court in Radhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496 , for the proposition that a writ petition was not maintainable in matters relating to contract. Mr. Deb also cited the decision of the Supreme Court in Radhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496 , for the proposition that a writ petition was not maintainable in matters relating to contract. He explained that in LIC v. Escorts Ltd., (1986) 1 SCC 264 : ( AIR 1986 SC 1370 ), the Supreme Court held that if the action of the State was related to contractual obligations, the Court might not ordinarily examine it unless the action had some public law character attached to it and this proposition of law in LIC v. Escorts Ltd. (supra) was quoted and reiterated by the Supreme Court in LIC of India v. Consumer Education and Research Centre, (1995) 5 SCC 482 : ( AIR 1995 SC 1811 ). According to Mr. Deb, there was a distinction between private law and public law remedy and since matters arising out of a contract were in the field of private law, the public law remedy under Art. 226 of the Constitution was not available and that the writ petition filed by the respondent was liable to be dismissed on this ground alone, and yet the learned single Judge allowed the same and directed refund of the earnest money of Rs. 8,06,000/- with interest to the respondent. 4. In reply to the aforesaid contentions, Mr. A. M. Lodh, learned senior counsel appearing for the respondent, cited a Division Bench judgment of this Court in East India Publication Ltd. v. Assam Industrial Development Corporation Ltd., (1998) 2 Gauhati LR 123, wherein it has been held that in the realm of contract, the interference by a writ Court would not be proper unless the element of unfairness or arbitrariness was palpable. According to Mr. Lodh, since there was palpable unfairness and arbitrariness in the present case on the part of the appellant-authorities in forfeiting the earnest money of Rs. 8,06,000/- of the respondent, the Court could always entertain the writ petition under Art. 226 of the Constitution and examine the decision-making process of the authorities in exercise of its power of judicial review as per the law laid down by the Division Bench in the said case. 8,06,000/- of the respondent, the Court could always entertain the writ petition under Art. 226 of the Constitution and examine the decision-making process of the authorities in exercise of its power of judicial review as per the law laid down by the Division Bench in the said case. He pointed out that the case of the respondent as indicated in para 16 of the writ petition was that the appellants had acted unfairly and against the principles of natural justice and therefore the decision-making process itself was not fair and the decision of the appellants to forfeit the earnest money of Rs. 8,06,000/- was liable to be set aside. 5. The contention of Mr. Deb, learned counsel for the appellants, that the High Court in exercise of its power under Art. 226 of the Constitution could not entertain the present writ petition is based on the assumption that there was a concluded contract between the appellants and the respondent. This assumption is misconceived. By notice dated 7-4-97, the appellants had only invited tenders for appointment of transport contractor and by his tender dated 7-5-97 the respondent had only submitted an offer and so long as the said offer was not accepted by the appellants no concluded contract arose between the appellants and the respondent and the rights and obligations of the appellants and the respondent were not governed by any contract between them. In the case of Har Shankar, ( AIR 1975 SC 1121 ) (supra), the Supreme Court noted in para 7 of the said judgment as reported in (1975) 1 SCC 737 : ( AIR 1975 SC 1121 ) that in an auction for granting the right to sell country liquor, the appellants in that case had given their bids and "those bids were duly accepted by the first respondent" and on these facts the Supreme Court held in para 21 of the said judgment that a concluded contract must be held to have come into existence between the parties and that the writ jurisdiction of the High Court under Art. 226 of the Constitution was not intended to facilitate avoidance of obligations voluntarily incurred. In Radha Krishna Agarwal, ( AIR 1977 SC 1496 ) (supra) similarly the Supreme Court found that there was a written contract between the appellants and the respondents in that case whereunder the appellants were collecting sal seeds from forest area on payment of royalty and the said contract provided for revision of the rate of royalty every three years and the Conservator of Forest sought to enhance the royalty and then cancelled the contract and in those facts, the Supreme Court held that the remedy under Article 226 of the Constitution in a case of breach of a non-statutory contract by the State was not available under Article 226 of the Constitution. The decision of the Supreme Court in Radhakrishna Agarwal, AIR 1977 SC 1496 therefore does not apply to the facts of the present case in which there was no concluded contract between the appellants and the respondent for transportation of food grains/sugar/allied materials. In LIC v. Escorts Ltd. (supra), the Supreme Court held in para 102 of the said judgment as reported in (1986) 1 SCC 264 : ( AIR 1986 SC 1370 ) thus : "...........If the action of the State is related to contractual obligations or obligations arising out of the tort, the Court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances........." Thus, it was also held in the said case that if the action of the State was related to contractual obligations, the Court might not ordinarily examine it unless the action had some public law character attached to it. The Court further observed that the Court would examine the actions of the State if they pertained to the public law domain and refrain from examining them if they pertained to the private law field and the difficulty would lie in demarcating the frontier between the public law domain and the private law field. The Supreme Court further noted in the aforesaid decision that it was impossible to draw the line with precision between the public law domain and private law field and that the question must be decided in each case with reference to the particular action. In the later case of LIC of India v. Consumer Education and Research Centre, the Supreme Court quoted the aforesaid observations of the constitution Bench in LIC v. Escorts Ltd. (supra) and observed in para 29 of the judgment as reported in (1995) 5 SCC 482 : ( AIR 1995 SC 1811 ) thus : "............While exercising the power under Article 226 the Court would be circumspect to adjudicate the disputes arising out of the contract depending on the facts and circumstances in a given case. The distinction between the public law remedy and private law field cannot be demarcated with precision. Each case has to be examined on its own facts and circumstances to find out the nature of the activity or scope and nature of the controversy. The distinction between public law and private law remedy is now narrowed down............" Thus, in the aforesaid case of LIC of India v. Consumer Education and Research Centre also the Supreme Court made the aforesaid observations in the context of adjudication of a dispute arising out of contract. In the instant case, the dispute between the appellants and the respondent did not arise out of a contract as no contract between the appellants and the respondent was concluded for transportation of food-grains/sugar/allied materials. The contention of Mr. Deb, learned counsel for the appellants, therefore, that the writ petition under Article 226 of the Constitution for a direction on the appellants to refund the earnest money of Rs. 8,06,000/- could not be entertained, has no merit. 6. It was next submitted by Mr. The contention of Mr. Deb, learned counsel for the appellants, therefore, that the writ petition under Article 226 of the Constitution for a direction on the appellants to refund the earnest money of Rs. 8,06,000/- could not be entertained, has no merit. 6. It was next submitted by Mr. Deb, learned counsel for the appellants that by the impugned judgment and order, the learned single Judge has held that the respondents letter dated 5-7-97 did not amount to modification of his offer and that the power under Clause 4 of the tender documents could not be exercised by the authorities. Mr. Deb vehemently contended that a bare perusal of the letter dated 5-7-97 would show that the respondent had modified his offer submitted on 7-5-97 and thus the finding of the learned single Judge that he had not modified his offer by the said letter dated 5-7-97 was incorrect. Mr. Deb further contended that since the respondent No. 1 modified his offer by his letter dated 5-7-97 before the expiry of 15 days period of extension up to 7-7-97 intimated by the Senior Regional Manager, Food Corporation of India in his telegram dated 20-6-97, the appellant-authorities were fully entitled to forfeit the earnest money of Rs. 8,06,000/- furnished by the respondent. According to Mr. Deb, therefore, this was not a fit case in which the learned single Judge should have allowed the writ petition and directed the authorities to refund the earnest money of Rs. 8,06,000/- to the respondent and should have awarded interest on the said amount on the ground that the power was exercised in a most arbitrary, whimsical and capricious manner and the money was withheld in a most wrongful manner. 7. In reply to the aforesaid submission, Mr. A. M. Lodh, learned counsel for the respondent, contended that under Section 5 of the Contract Act, 1872, a proposal could be revoked at any time before the communication of its acceptance was complete as against the proposer and hence the respondent was fully within his right to revoke his offer before its acceptance by the appellants. In support of this submission, Mr. Lodh cited the decision of the Delhi High Court in M/s. Suraj Besan and Rice Mills v. Food Corpn. In support of this submission, Mr. Lodh cited the decision of the Delhi High Court in M/s. Suraj Besan and Rice Mills v. Food Corpn. of India, AIR 1988 Delhi 224, in which a learned single Judge has held that a person can withdraw or modify his offer or tender before communication of the acceptance is complete as against him and that the Government by merely providing a clause to the contrary in the tender notice could not take away the legal rights of such person. He also relied on the decision of a Division Bench of this Court in Abdus Salam Choudhury v. State of Assam, AIR 1991 Gauhati 9, in which it has been held that under the provisions of Section 5 of Indian Contract Act, a proposal may be revoked at any time before communication of its acceptance is complete as against the proposer and that such a statutory right under the provisions of the Contract Act cannot be overridden or taken away by the provision of the local Rules framed by the State Government regulating the settlement/sale of Mahal/Coupe to the forest Contractors. Mr. Lodh further submitted that in any case the letter dated 5-7-97 of the respondent to the appellants did not amount to modification of his offer and, therefore, the earnest money furnished by the respondent was not liable to be forfeited under Clause 4 of the tender documents. He argued that before taking the decision to forfeit the earnest money of the respondent in the impugned communication dated 26-11-97, the appellants should have observed the principles of natural justice. Relying on the decision of the Supreme Court in Braj Kishore Thakur v. Union of India, 1997 (3) SLJ 73 : ( AIR 1997 SC 1157 ), Mr. Lodh contended that since in the aforesaid communication dated 26-11-97 no reason for forfeiting the earnest money furnished by the respondent was given by the appellants, the impugned decision was liable to be quashed and the respondent was entitled to a direction from this Court for refund of the earnest money of Rs. 8,06,000/-. Lodh contended that since in the aforesaid communication dated 26-11-97 no reason for forfeiting the earnest money furnished by the respondent was given by the appellants, the impugned decision was liable to be quashed and the respondent was entitled to a direction from this Court for refund of the earnest money of Rs. 8,06,000/-. He placed reliance on the decision of a Division Bench of the Allahabad High Court in M/s. Shyam Biri Works Pvt. Ltd. v. UP Forest Corporation, AIR 1990 Allahabad 205 in which the Court directed refund of the earnest money amount with interest @ 15% furnished by a tenderer pursuant to invitation of tenders. 8. Clause 4 of the tender documents on which reliance has been placed by Mr. Deb, learned counsel for the appellants for forfeiting the earnest money of Rs. 8,06,000/- of the respondent by the impugned communication dated 26-11-97 is extracted hereinbelow : "4. EARNEST MONEY : Tender form must be accompanied by an Earnest Money of Rs. 8,06,000/- (Rupees Eight lakhs Six thousand) only in the form of a Crossed A/c Payee (not negotiable Demand Draft/Pay Order/Bankers Cheque/Deposit-at-call Receipt issued by the State Bank of India or a Scheduled Bank in favour of Sr. Regional Manager, Food Corporation of India, Shillong. Tenders not accompanied by Earnest Money in the form prescribed above shall be summarily rejected. The earnest money shall be liable to forfeiture if the tenderer after submitting his tender resiles from or modifies his offer and/or the terms and conditions thereof in any manner. It being understood that the tender documents have been made available to him and he is being permitted to tender in consideration of his agreement to this stipulation. The earnest money is also liable to be forfeited in the event of the Tenderers failure, after the acceptance of his tender, to furnish the requisite security deposit by the due date without prejudice to any other rights and remedies of Corporation under the Contract of Law. The earnest money will be returned to all unsuccessful tenderers, as soon as practicable after decision on tenders and to a successful tenderer, after he has furnished a security deposit, if the successful tenderer does not desire the same to be adjusted towards the security deposit. The earnest money will be returned to all unsuccessful tenderers, as soon as practicable after decision on tenders and to a successful tenderer, after he has furnished a security deposit, if the successful tenderer does not desire the same to be adjusted towards the security deposit. No interest shall be payable on the amount of earnest money, in any case." The aforesaid Clause 4 of the tender documents would show that the tender form was to be accompanied by an earnest money of Rs. 8,06,000/- and the earnest money was liable to forfeiture if the tenderer after submitting his tender resiled from or modified his offer and/or the terms and conditions thereof in any manner. Under the aforesaid Clause 4 of the tender documents, it is not as if the right of the tenderer to revoke his proposal before the communication of its acceptance under Section 5 of the Indian Contract Act was taken away. The said Clause 4 of the tender documents only provided that in case the tenderer exercised his aforesaid right to resile from or modify his offer and/or the terms and conditions of his offer in any manner, the earnest money deposited by him was liable to be forfeited. Thus, if the tenderer resiled from or modified his offer and/or the terms and conditions of his offer in any manner, his offer thereafter could not be accepted by the acceptor and no contract could be concluded between the tenderer and the acceptor. In the absence of such a contract between the tenderer and the acceptor the tenderer would not be liable for any loss suffered by the acceptor on account of breach of contract. 9. But the aforesaid Clause 4 of the tender documents makes it clear that if the tenderer resiles from or modifies his offer and/or the terms and conditions thereof in any manner, he does it at the risk of his earnest money being liable to be forfeited. This is because of the understanding mentioned in the aforesaid Clause 4 of the tender documents that the tender documents have been made available to him and he is being permitted to tender in consideration of the aforesaid stipulation that the earnest money deposited by him would be liable for forfeiture if he resiles from or modifies his offer and/or the terms and conditions thereof in any manner after submitting the same. The liability for forfeiture of the earnest money of the tenderer arose not out of a contract between the tenderer and the acceptor on acceptance of his tender but on account of a pre-contract understanding between the tenderer and the acceptor that the offer submitted by the tenderer would not be withdrawn or modified in any manner during the period within which the acceptor was to take a decision on the offer. The object of including such an understanding in Clause 4 of the tender documents obviously was to ensure that the offer of the tenderer remained firm during the period within which the acceptor was to take a decision on the offer. 10. The next question is as to whether in every case in which the tenderer after submitting his tender resiled or modified his offer and/or the terms and conditions thereof in any manner, the earnest money furnished by him was to be automatically forfeited. Clause 4 of the tender documents only says that the earnest money "shall be liable to forfeiture" if the tenderer after submitting his tender resiles from or modifies his offer and/or the terms and conditions thereof in any manner. Further the last limb of Clause 4 of the tender documents states that the earnest money will be returned to all unsuccessful tenderers as soon as practicable after decision on tenders. It is thus clear from the express language used in Clause 4 of the tender documents that where the tenderer resiled from or modified his offer in any manner after having submitted the tender, the earnest money furnished by him could not be straightway and automatically forfeited by the accepting authority. In our considered opinion, where a tenderer after submitting his tender resiles from or modifies his offer in any manner during the period within which the offer is to remain valid and the authority is to take a decision on the offer, the authority can forfeit the earnest money of the tenderer only if it finds that such withdrawal or modification of his offer has resulted in loss to the acceptor on account of the withdrawal or modification of the offer. This is because in the absence of any concluded contract between the tenderer and the accepting authority the earnest money furnished by the tenderer was not to be forfeited for any breach of contract but to make good any loss that the accepting authority may suffer due to premature withdrawal or modification of the offer by the tenderer. Any other construction of Clause 4 of the tender documents would invest the Food Corporation of India, which is an instrumentality of State, with the arbitrary power to forfeit earnest money of a tenderer even in a case where it did not suffer any loss.The questions to be decided in this case, therefore, are whether the respondent in fact withdrew or modified his offer before the due date and as to whether such withdrawal or modification of his offer resulted in any loss to the appellants. 11. Clause C of the notice inviting tenders provided that the tender was to remain open for acceptance up to and inclusive of 22-6-97 and that the Senior Regional Manager, Food Corporation of India, NEF Region, Shillong-3 might at his discretion extend that day by a fortnight and such extension would be binding on the tenderers. As a matter of fact, the Senior Regional Manager, FCI, NEF Region, Shillong had by his telegram to the respondent extended the validity period of the tender by another 15 days up to 7th July, 1997 in accordance with the aforesaid clause in the notice inviting tenders. But before 7-7-97, the respondent submitted the letter dated 5-7-97 to the District Manager, Food Corporation of India, Tripura, Agartala, quoted above. According to the appellants, the aforesaid letter dated 5-7-97 of the respondent to the District Manager, FCI, amounted to modification of his tender submitted on 7-5-97. There appears to be some force in the aforesaid contention of the appellants that the letter dated 5-7-97 of the respondent to the District Manager, FCI, Agartala if strictly construed had the effect of modifying the tender submitted by the respondent on 7-5-97. But as we have held above, the Food Corporation of India being an instrumentality of the State, could forfeit the earnest money of Rs. 8,06,000/- furnished by the respondent only if some loss was suffered by it due to such premature modification of the offer by the respondent. But as we have held above, the Food Corporation of India being an instrumentality of the State, could forfeit the earnest money of Rs. 8,06,000/- furnished by the respondent only if some loss was suffered by it due to such premature modification of the offer by the respondent. In the impugned communication dated 26-11-97 of the Senior Regional Manager to the respondent forfeiting the earnest money of Rs. 8,06,000/- of the respondent, there was no mention whatsoever that the Food Corporation of India had suffered any loss on account of such modification of the offer by the respondent. In the affidavit-in-opposition filed on behalf of the respondents on 28-4-98 in Civil Rule No. 660/97 out of which this appeal arises, however, the following inconvenience suffered by the Food Corporation of India due to the modification of the offer by the respondent has been stated in paragraph 5 : "5. That the statements made in para 7 of the writ petition are disputed by me. The tender could not be finalised within the stipulated period as the petitioner being the lowest tenderer, modified his rate at the fag end. The tender was meant for transportation of essential commodities like food grains from Dharmanagar to Agartala for Public Distribution System (PDS). The matter being urgent in nature the Respondents were carrying the food-grains with the help of State Government as an interim arrangement, and as such finalisation of the contract was essential. Consequently to avoid further delay the tenderers are requested to keep the offer open beyond 7-7-97 and on the basis of such request the tenderers extended their consent and accordingly the offer was kept open till 30-9-97. The tender was finalised and awarded to the 2nd lowest tenderer after negotiation of the rate. It is thus not true that the extension up to 30-9-97 was made illegally by the Respondents." It will be clear from paragraph 5 of the affidavit-in-opposition quoted above that the tender could not be finalised within the stipulated period and that the validity period of the offer had to be extended by 15 days up to 7-7-97 and thereafter up to 30-9-97 on the consent of the tenderers and that the tender was finalised and awarded to the second lowest tenderer after negotiation of the rate. Thus, it is not as if that the tenders submitted by the parties had to be cancelled and fresh tenders had to be invited. The tender submitted by the second lowest tenderer was finalised and awarded to him after negotiation of the rate. The appellants therefore had obtained the best possible rate from the second lowest tenderer after negotiation for the contract in question and no loss was suffered by the appellants due to modification of the offer by the respondent by his letter dated 5-7-97. The appellants, however, were unable to finalise the contract at the lowest rate on account of the modification of the lowest tender submitted by the respondent. But, as has been held by us above, until the offer submitted by the respondent was accepted by the accepting authority there was no contract between the respondent and the appellants and therefore no loss on account of breach of such contract between the appellants and the respondent could be recovered from the earnest money furnished by the respondent. 12. For the reasons stated above, we hold that the forfeiture of the earnest money of Rs. 8,06,000/- furnished by the respondent along with his tender by the appellants was arbitrary and that a direction is to be issued to the Food Corporation of India to refund the said earnest money to the respondent. Clause 4 of the tender documents, however, would show that the earnest money was not to carry any interest. Moreover, the facts of this case show that the respondent himself was responsible to a large extent for retention of the earnest money by the appellants. We are therefore of the view that the direction to pay interest @ 12% p.m. on the said earnest money in the impugned judgment and order of the learned single Judge was not justified in the facts and circumstances of the case. 13. We therefore allow this appeal in part and direct that the appellants will refund the earnest money amount of Rs. 8,06,000/- to the respondent within a period of two months from the date of receipt of a certified copy of this judgment and order from the respondent. We however make it clear that no interest would be payable on the said amount by the appellants to the respondent. The impugned judgment and order of the learned single Judge is modified accordingly. We however make it clear that no interest would be payable on the said amount by the appellants to the respondent. The impugned judgment and order of the learned single Judge is modified accordingly. Considering, however, the entire facts and circumstances of the case, we leave the parties to bear their own costs. Appeal partly allowed.