JUDGMENT : Dr. A.K. Rath, J. By this writ petition under Article 226 of the Constitution of India, the petitioner calls in question the legality and propriety of the letter dated 24/25.1.2006 issued by the opposite party, vide Annexure-11, whereby and whereunder the Earnest Money Deposit (hereinafter referred to as “the E.M.D”) amounting to Rs.1.00 lakh was forfeited. An ancillary prayer has also been made to refund the said E.M.D. 2. Bereft of unnecessary details, the short facts of the case of the petitioner is that the opposite party issued a sale notice in the month of January, 2005 in the local daily “the Samaj” inviting offers from the intending parties for sale of the assets including the land, building and machineries of the defaulting unit M/s. Eastland Impex Ltd., Barbaria in the district of Balasore in exercise of its power under Section 29 of the State Financial Corporation Act, 1951 (in short, “the Act”). The last date of the offer was fixed to 28.1.2005 at 5 P.M. The petitioner submitted its offer along with E.M.D of Rs.1.00 lakh on 22.1.2005. The price offered by the petitioner was Rs.100.00 lakhs. The petitioner being the highest bidder was called upon for negotiation by the Default Advisory and Disposal Committee (hereinafter referred to as “the DADC”) of opposite party on 29.1.2005. After discussion, the petitioner submitted the modified offer on 29.1.2005, vide Annexure-3. On 22.2.2005, the petitioner sent a letter to get the modified offer approved by the Board of the opposite party. The opposite party in its letter dated 15.4.2005, vide Annexure-5, agreed to accept the modified offer, but imposed certain terms and conditions for such acceptance. Thereafter, the petitioner sent a letter dated 7.5.2005 to the opposite party to waive certain conditions, vide Annexure 6. But then, by letter dated 6.7.2005, vide Annexure-7, the opposite party intimated the petitioner that since the offer made by the petitioner was not acceptable, the offer of the opposite party to sell the fixed assets of the said unit was cancelled. Aggrieved by the cancellation of the offer, the petitioner filed a writ petition being WP(C) No.10423 of 2005. While the matter stood thus, the opposite party issued a public sale notice for sale of the fixed assets of the defaulting unit in August, 2005. The petitioner again participated and made the offer. Aggrieved by the cancellation of the offer, the petitioner filed a writ petition being WP(C) No.10423 of 2005. While the matter stood thus, the opposite party issued a public sale notice for sale of the fixed assets of the defaulting unit in August, 2005. The petitioner again participated and made the offer. Though the petitioner was the highest bidder, but then his tender was cancelled. Again the opposite party issued a public sale notice in December, 2005 for sale of the said defaulting unit. Pursuant to the said notice, the petitioner made his offer on 26.12.2005. The offer made by the petitioner was highest amongst all. When the petitioner came to know that the opposite party decided to settle the sale in favour of other persons, the petitioner again filed a writ petition, which was registered as WP(C) No.206 of 2006. During pendency of the said writ petition, the petitioner along with other bidders were invited by the opposite party for attending the D.A.D.C meeting held on 16.1.2006. Finally, the petitioner offered the amount of Rs.1.20 crores subject to certain terms and conditions. The same being the highest was accepted by the opposite party. Thereafter, WP(C) No.206 of 2006 was not pressed. While the matter stood thus, the opposite party vide letter no.6259 dated 24/25.01.2006, vide Annexure-11, intimated the petitioner that the E.M.D. amounting to Rs.1.00 lakh deposited for the first sale notice stood forfeited. The petitioner made a representation for reconsideration of the matter, but the same was of no avail. 3. Pursuant to issue of notice, a counter affidavit has been filed by the opposite party. The case of the opposite party is that it along with the Orissa State Financial Corporation (hereinafter referred to as “the OSFC”) and the State Bank of India had extended term loan to M/s.Orissa Leather Industries Ltd., a subsidiary company of Leather Corporation of Orissa, for setting up of a leather complex at Barbaria near Chandaneswar in the district of Balasore. But the company could not complete the project due to various reasons, as a result of which M/s. Orissa Leather Industries Ltd. was taken over by the OSFC on 4.3.1998 under Section 29 of the Act and disposed of the same in favour of M/s.Eastland Impex Ltd. on a consideration of Rs.340.00 lakhs. But the company could not complete the project due to various reasons, as a result of which M/s. Orissa Leather Industries Ltd. was taken over by the OSFC on 4.3.1998 under Section 29 of the Act and disposed of the same in favour of M/s.Eastland Impex Ltd. on a consideration of Rs.340.00 lakhs. But then, M/s.Eastland Impex Ltd. neither executed the document with the opposite party, nor paid any amount towards proportionate deferred value of the opposite party. Thereafter, the assets of M/s. Eastland Impex Ltd. were taken over by the opposite party on 6.2.2004 under Section 29 of the Act for realization of the dues. After the seizure, an advertisement was issued in February, 2004, June, 2004 and August, 2004 by the opposite party for sale of the seized assets. Due to inadequate offers, the sale of the assets could not be materialized. Again, an advertisement was issued in January, 2005 in English as well as Oriya newspapers. In response to the same, three number of offers were received including the offer of the petitioner. In the DADC meeting held on 29.1.2005, the matter was discussed. The offer made by the petitioner was Rs.100.00 lakhs. The DADC discussed with the representative of the petitioner who had expressed his inability to enhance the offer or to reduce the period of payment. The DADC decided to place the proposal before the Board. The Board decided to sale the seized assets of the defaulting unit in favour of the petitioner on a consideration of Rs.100.00 lakhs with a condition that Rs.25.00 lakhs would be paid as down payment within 30 days from the date of issue of sale letter and the balance amount would be paid in five instalments of Rs.15.00 lakhs each subject to further condition that the ownership of the assets would be transferred after receipt of full payments. Accordingly, the sale letter dated 15.4.2005 was issued in favour of the petitioner. By letter dated 7.5.2005, the petitioner intimated that it had not agreed to certain terms and conditions mentioned in the sale letter and requested for modification of the condition. The same was placed before the 196th meeting of the Board of Directors held on 10.6.2005. After discussion, the Board did not agree to modify the terms and conditions of the sale. The same was placed before the 196th meeting of the Board of Directors held on 10.6.2005. After discussion, the Board did not agree to modify the terms and conditions of the sale. Accordingly, the opposite party vide letter dated 7.7.2005 cancelled the offer for sale of the defaulting unit due to non-payment of required money as per the stipulation made in the sale letter. While the matter stood thus, an advertisement was issued in August, 2005 for sale of the assets of the defaulting unit. Four number of offers were received. The same were placed before the 38th DADC meeting held on 5.9.2005. Since the highest offer was less than the valuation of the assets, the proposal was placed before the meeting of the Board held on 28.9.2005. It was decided to issue a fresh advertisement. Accordingly, an advertisement was issued in December, 2005. Four number of offers were received including the offer of the petitioner. But the petitioner made the offer without E.M.D. The petitioner requested to adjust the security deposit paid earlier. Since the petitioner defaulted in payment, the security deposit was forfeited. As the price offered was on the lower side, the DADC decided to extend the date of submission of the offer. It is further stated that the advertisement was issued during January, 2006. In response to the same, four number of offers were received including the petitioner. The same were placed before the DADC meeting held on 1.2.2006. It was decided to sell the seized assets in favour of the petitioner, who was the highest bidder, at a price of Rs.120.00 lakhs. All the conditions of sale were accepted by the petitioner vide letter dated 17.3.2006, Annexure-G. The opposite party by letter dated 23.3.2006 intimated the petitioner to refrain from stipulating any other conditions. It was also intimated that previous E.M.D. of Rs.1.00 lakh had already been forfeited. After deposit of the amount, the unit was handed over to the petitioner on 14.8.2006. It is further stated that the request of the petitioner for refund of Rs.1.00 lakh was placed before the 200th meeting of the Board of Directors held on 21.6.2006. After discussion, the Board rejected the said request, which was communicated to the petitioner on 8.9.2006. Further, the request for refund/adjustment of E.M.D. had also been discussed in different DADC meetings. It is further stated that the request of the petitioner for refund of Rs.1.00 lakh was placed before the 200th meeting of the Board of Directors held on 21.6.2006. After discussion, the Board rejected the said request, which was communicated to the petitioner on 8.9.2006. Further, the request for refund/adjustment of E.M.D. had also been discussed in different DADC meetings. After careful consideration, the E.M.D was forfeited due to non-acceptance of terms and conditions of sale notice by the petitioner. 4. Heard Mr.D.K.Dey, learned counsel for the petitioner and Mr.S.S.Mohanthy, learned counsel for the opposite party. 5. The sole point that arises for our consideration is as to whether the opposite party was justified in forfeiting the E.M.D. of Rs.1.00 lakh of the petitioner. 6. Section 7 of the Indian Contract Act, 1872 provides that in order to convert a proposal into a promise, the acceptance must be absolute, unqualified and without conditions. The offer and acceptance must correspond. The acceptance must match with the terms of the offer. When there is a variation between the offer and acceptance even in respect of any material term, acceptance cannot be said to be absolute. It does not result in the formation of a contract. An acceptance does not convert a proposal into a promise, if it is qualified by conditions. 7. Bearing in mind the aforesaid principles of law, we have given our anxious consideration to the issue involved. The sale notice, vide Annexure-1, stipulates that “if the offer is accepted by the Corporation and the offerer (s) does not come forward to accept the same, the amount deposited with the offer shall be forfeited. The amount deposited with the offer will be refunded without any interest in case the offer is not accepted by the Corporation.” 8. We find that final offer made by the petitioner, vide Annexure-4, was not accepted in toto. The balance down amount of Rs.75.00 lakhs, which was offered by the petitioner to be paid in five annual instalments, was accepted by the opposite party with a condition that the deferred sale consideration of Rs.75.00 lakhs shall be treated as term loan and carry interest at the rate of 14% per annum (computed at quarterly rest) with a rebate of at the rate of 3% for timely payment. In the letter dated 7.5.2005, vide Annexure-6, the petitioner had categorically stated to modify and confirm the same, but then it was rejected by the opposite party, vide Annexure-7. The acceptance did not match with the terms of the offer. Thus the offer made by the petitioner was not accepted by the opposite party. Since the offer was not accepted by the opposite party, the question of forfeiture of E.M.D does not arise at all. 9. In the wake of the aforesaid, the letter dated 24/25.1.2006, vide Annexure-11, forfeiting the E.M.D. of the petitioner is quashed. The opposite party is directed to refund the said amount within a period of thirty days to the petitioner.