JUDGMENT B.D. Agarwal, J. - Under agreement dated November 12, 1976, the UP Electronic Cot:- proration Ltd., a Government company (hereinafter described as UPLC) and M/s Anand Electronics (a partnership firm) (petitioner No 2) joined to float a company in the joint sector under the name and style of Uptron Anand Ltd. (petitioner no. 1) (hereinafter referred to as the 'Company') for the manufacture of black and white television picture tubes. The shareholding of the UPLC in the venture is 26 %, the partners in the petitioner no. 2 the partnership firm, held shares to the extent of 25% and the rest is held by members of the public. Under the articles of association of the company there were to be six directors nominated by the UPLC and five by the petitioner no 2. The managing director was to be a nominee of the petitioner no 2 with the approval of the UPLC from among its directors, the Chairman was to be a nominee of the UPLC from among its six nominee directors. The unit is located on plot no 8, Block No A, Panki Industrial Estate, Kanpur, covering an area of nearly 7 acres and has imported machinery. It was registered on May 30, 1977, and went into production in 1981. 2. Due primarily, it appears, to discord in the internal management between the two sets of promotes, the company came under cloud. The production ceased in or about December, 1984. The UP Financial Corporation, a statutory body created under the State Financial Corporations Act, 1951 (respondent no 1) (hereinafter referred to as the Act) had on November 20, 1979, and December 18, 1980, sanctioned loan of Rs. 30 Iakhs to the company of which Rs. 29,28,800 had been actually advanced in terms of the agreement accompanied with the hypothecation deeds. Due to the persistent default on the part of the company, the petitioner no. I to abide by its commitment in regard to the payment of interest, the UP Financial Corportation (for short, UPFC) issued notice dated February 23, 1985, under section 29 of the Act raising claim of Rs. 34,68,743.59 comprising of Rs. 29,29,800 as principal and Rs. 5,39,943.59 as interest (upto December 31, 1984) (Annexure 6). The petitioner No. I was called upon to pay this amount within 45 days from the date of notice, in addition to interest till the date of payment. 34,68,743.59 comprising of Rs. 29,29,800 as principal and Rs. 5,39,943.59 as interest (upto December 31, 1984) (Annexure 6). The petitioner No. I was called upon to pay this amount within 45 days from the date of notice, in addition to interest till the date of payment. The operative part of the notice reads as follows : "That if you fail to make payment of the aforesaid amount within the specified time as mentioned in para 3 above, the Corporation in exercise of the power vested in it under section 29 of the SFC's Act (No 63 of 1951) (Central Act) shall take over the physical possession of M/s Uptron Anand Ltd. Plot no 8, Block 'A', Uptron Estate, Panki Industrial Estate Kanpur, and take further action for the transfer of the assets of the unit mortgaged to the Corporation." 3. The payment not being made, the UPFC, entered into physical possession of the Company on April 8, 1985, Notice dated April, 22, 1985, was published thereafter by the UPFC in some leading newspapers of the country on April 25, and May 2, 1985, inviting tenders upto May 10, 1985 accompanied with earnest money of Rs. 25,000 for the transfer of the assets of the unit subject to the statutory liabilities (Annexure 9). The company is not specifically named in this notice, but from the other description and details given, there could be no mistake as to the identity and giving the name is claimed to have been avoided lest the good will be adversely affected. 4. Subsequent to the publication of this notice, there were efforts made at different levels to supply new blood to the concern and rehabilitate it, into the details whereof we will enter later, but these did not fructify. On May 17, 1986, the UPFC entered into agreement in writing with M/s Trident Electronics Pvt. Ltd. for transfer of the unit to the latter for consideration of Rs. 84.14 lakhs of which a sum of Rs. 12.30 lakhs is stated to have been obtained as initial payment and the latter has also been put in actual possession. 5. On May 17, 1986, the UPFC entered into agreement in writing with M/s Trident Electronics Pvt. Ltd. for transfer of the unit to the latter for consideration of Rs. 84.14 lakhs of which a sum of Rs. 12.30 lakhs is stated to have been obtained as initial payment and the latter has also been put in actual possession. 5. Aggrieved, the petitioner No I (Uptron Anand Ltd.) the company through Ram Kumar Tandon, one of the directors and the partnership firm - Anand Electronics (petitioner no 2) through Vijai Tandon, one of its partners have approached the Court under Article 226 of the Constitution seeking a writ of certiorari quashing the transfer of the unit and also mandamus directing the respondents to rehabilitate the unit and restore it intact to the petitioners. 6. We have heard learned counsel for the parties. Affidavits have been exchanged on both sides and upon the request of counsel jointly made, we proceed to decide the petition finally. 7. Section 29 of the Act deals with the rights of financial corporation in case of default. In the event of default on the part of any industrial concern in repayment of any loan or advance or any instalment thereof (apart from failure otherwise to comply with the terms of the agreement) the financial corporation gets the right under sub-section (I ) (i) to take-over the management or possession or both of the industrial concern; (ii) to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Corporation. 8. The transfer of property made by the financial corporation in exercise of its powers under sub-section (1) vests in the transferee all rights to the property as if the transfer had been made by the owner of the property (vide sub-section 27). The money received upon the transfer is to be held by the corporation in trust to be applied firstly in the payment of the costs, charges and expenses; and secondly, in discharge of the debt due to the Corporation. The residue is to be paid to the person entitled thereto (vide sub-section (3). For purposes of suing or being sued also the corporation is deemed to be the owner of the industrial concern, if the corporation has taken any action tinder sub-section (1) (vide sub-section 5). 9. The residue is to be paid to the person entitled thereto (vide sub-section (3). For purposes of suing or being sued also the corporation is deemed to be the owner of the industrial concern, if the corporation has taken any action tinder sub-section (1) (vide sub-section 5). 9. In this case, the UPFC took recourse to sub-section (1) of section 29 when there undisputedly was default on part of the company in repayment of the loan or the instalments thereof. The right proposed to be exercised in the notice issued for the purpose on February 23, 1985, was both to take over the management and possession of the concern and to transfer by way of lease or sale. The possession and the management were admittedly taken over on April 8, 1985. The transfer subsequent thereto by the UPFC in favour of a third person is in the process, till now there being the agreement to sell and also the conveyance of possession. 10. Upon the material placed on the record, it is not open to doubt that there was default on the part of the petitioner no. I in the repayment of loan advanced by the UPFC loan sanctioned to the petitioner under the agreement dated November 20, 1979, December 18, 1980 was to the tune of Rs. 30 lakhs. Of this, the amount advanced was Rs. 29,28,800 only. Equitable mortgage was created by the petitioner in favour of the UPFC on November 20, 1979 and December 18, 1980. On June 11/12, 1979 the Pradeshiya Industrial and Investment Corporation, UP Ltd (Picup, for short) authorised the UPFC to accept as agent for Picup the deposit of title deeds to immovable properties of the petitioner no. I for repayment of Rs. 26.10 lakhs granted by the UPFC together with interest etc. and the repayment of Rs. 22 lakhs agreed to be granted by the Picup (vide Annexure CA 1). For repayment of the loan (including interest) in instalments, there was rescheduling on June 2, 1983 subject to the conditions : (i) the interest overdues, if any, be cleared by the petitioner no 1 immediately: (ii) the interest shall be chargeable as per agreement but rebate to be granted as per norms of the UPFC The petitioner no I could not keep even to the rescheduling upto December 31, 1984, the amount due to the UPFC rose to Rs. 34,68,742.59 (which is inclusive of Rs. 5,39,943.59 towards interest). In para 9 of the rejoinder filed by the petitioners, the admission contained is : "Approximately, a total sum of Rs. 22.50 lakns fell due and payable by the petitioner no 1 to the respondent no 1 as interest on the principal loan amount of about Rs. 29.29 lakhs for the period upto December 31, 1984 out of which the petitioner no I paid the total sum of more than Rs. 19 lakhs to the respondent no I against interest." 11. For purposes of the case, it is not necessary to calculate the precise amount due; but it is irrefutable that there did take place default on the part of the petitioner no I in repayment of substantial sums through the scheduled instalments which furnished the basis to the UPFC to take recourse to section 29(1) of the Act. 12. The promotes of the company, it is also apparent, could not pull on together and the differences leading to the mismanagement came to the surface not long after. The acrimony is reflected explicitly in the letter which the Director of Industries wrote to the State Government on November 7, 1983, based on his own impressions, vide Annexure 5 to the rejoinder affidavit saying : "2. 1 have had the pleasure of attending two board meetings of Uptron Anand Ltd., as a nominee director of Picup. Nothing could be decided in both these meetings as neither side was willing to concede its position. The meetings were highly acrimonious. It was very ernbarassing to find that the nominee directors of UPLC equally exceeded the bounds of decency. 3. The first meeting I attended was actually held in my own office room on the September 13, 1983. The Anand Electronics wanted to change its nominees and also make up the strength of their nominee. The other main point was regarding decisions taken in the previous meetings on the August 6, and August 27, 1983, wherein Dr. J Tandon, managing director of Uptron Anand was divested of all powers and the same were given to Dr. B P Verma, a nominee director of Anand Electronics. The nominee directors of UPLC kept on insisting that Anand Electronics has been dissolved and, therefore, its nominees on the board have no status and such nominees can neither be changed nor freshly appointed. B P Verma, a nominee director of Anand Electronics. The nominee directors of UPLC kept on insisting that Anand Electronics has been dissolved and, therefore, its nominees on the board have no status and such nominees can neither be changed nor freshly appointed. As far as I could see, this stand was not justified and the Anand Electronics should have been allowed to change/indicate additional nominees. 4. One of the reasons why UPLC could not accept this proposal coming from Anand Electronics was that it would have made the decisions of previous board meetings on August 6 and 27, 1983, infructuous and Dr J Tandon would again become effective as managing director. From whatever I have been able to hear and see, this contrived decision of the board meetings held on August 6 and August 27, 1983 in the absence of nominees of Anand Electronics to divest Dr. J Tandon of powers as managing director is not in good taste. The UPLC seems to be carrying on a war against Dr. J Tandon." Regarding the viability of the unit, the director had this to add: "The UPLC have expressed the view that this unit is non-viable on its present capacity of 40,000 tubes per year, and the private collaborator is not willing to bring in more funds for its expansion. This is not entirely true because the private promoter is going in for expansion of 40,000 tubes per annum, and has also been able to sell these tubes at a higher price than EEL etc. I had requested to UPFC to carry out a rough feasibility study of this unit. According to their circulation, the unit would not suffer any cash losses even if the price of the tube will be reduced to Rs. 410 against the current selling price of Rs. 450. Its viability will vastly improve with the doubling of the capacity. In any case, it is not clear why the UPLC seems to be bent upon driving out the current management and assume control over unit which according to them is not viable." 13. Dr. J Tandon contending that he was the managing director filed OS No 206 of 1983 in the Court of Civil Judge, Kanpur. Upon ad interim injunction being refused, the matter was taken to civil revision No 502 of 1983 which was dismissed by this Court on December 21, 1984. Dr. J Tandon contending that he was the managing director filed OS No 206 of 1983 in the Court of Civil Judge, Kanpur. Upon ad interim injunction being refused, the matter was taken to civil revision No 502 of 1983 which was dismissed by this Court on December 21, 1984. In the course of the effort at reconciliation, there was a suggestion mooted at one stage that the UPLC might sell its shareholding to the other set of the promotes. The former was not agreeable to this. The petitioner no 2 (MI's Anand Electronics) offered then on July'3, 1985 to transfer the shareholding of its partners in the company to the UPLC for a sum of Rs. 28.5 lakhs (vide A.nnexure 10 to the writ petition), but this also did not fructify and the wranglings continued unabated. 14. In the backdrop of the persistent default of the company to repay the loan in instalments and keeping in view the mismanagement of the internal affairs due to the infighting between the two sets of promotes, the UPFC was within its powers to issue notice dated February 23, 1985 under section 29(1) of the Act (vide Annexure 6 to the writ petition). 15. Sri S C Tandon, learned counsel for the petitioners, argued that this notice be deemed as waived by the UPFC. We do not agree. Soon after the issue of the notice, Vijay Tandon Partner, M/s Anand Electronics wrote to Government (Industries Department) on March 21, 1985 pointing to the closure of the factory since December, 1984 in the absence of management, the existing dispute between the promotes over the extent and nature of representation in the board and suggesting a joint meeting of the concerned financial institution, and both the promotes to resolve the impasse. Prayer made was that the notice aforesaid be kept in abeyance till the matters are resolved (Annexure 7). A similar request appears in the letter dated April 4, 1985 (Annexure 8). The UPFC nonetheless acting in terms of the notice took over the management and possession of the unit on April, 8, 1985, and followed this up by notice dated, April 22, 1985 in newspapers advertising the proposed sale of the unit. It will be noticed that the petitioners made no challenge against the notice but instead sought to gain time in the hope of reconciliation between the managing concerns. It will be noticed that the petitioners made no challenge against the notice but instead sought to gain time in the hope of reconciliation between the managing concerns. The UPFC in its part gave no indication expressly or by its conduct that the notice shall not be given effect. The law is settled that a waiver must be an intentional act with knowledge. It must be intentional, that is, such as either expressly or by implication of law indicates intention to treat the matter as if the condition did not exist or as if the breach of condition had not occurred. Waiver is a conclusion of law when the necessary facts are established. It looks chiefly to the conduct and position of the person who is said to have waived in order to see whether he has approbated so as to prevent him from reprobating, Estoppel by Representation: Spencer Bower & Turner, 3rd Ed. p 318). 16. The attack of Sri Tandon is directed chiefly against the agreement to sell entered into by UPFC on May 17, 1986 (registered on November 11, 1986) in favour of M/s Trident Electronics Pvt Ltd. The grievance is both as to the manner it was reached and the price at which this was settled. It does require being probed into. The notice to sell dated April 22, 1985 was advertised in some leading newspapers on April 25, 1985 and May 2, 1985 (vide Annexure 9 to the writ petition). Tender was invited upto May 10, 1985 alongwith bank draft of Rs. 25,000. What transpired immediately after is mentioned in the letter which the Chairman, UPFC wrote on March 10, 1986 to the company (vide Annexure RA 3) : "It is not correct that the price on which UPLC should buy the assets was decided in the meeting held on December 28, 1985 in the office of the Principal Secretary, Industries. In fact that there is no question of deciding the price without inviting the offers from others after issuing advertisement in newspapers. We had issued advertisements on April 25, 1985 and May 2, 1985, but on the instructions of the Government we had not shown the unit to the intending purchasers. As a result, many reputed manufacturers of electronic items in the country could not give their offers. We had issued advertisements on April 25, 1985 and May 2, 1985, but on the instructions of the Government we had not shown the unit to the intending purchasers. As a result, many reputed manufacturers of electronic items in the country could not give their offers. We are quite sure that after proper advertisements and persuasion, we will receive handsome amount on sale of the assets of the unit. Moreover, in the above meeting, UPLC offered Rs. 2 lakhs more than the highest offer. 2. Now that UP Electronics Corporation is not agreeable to take the total liabilities of the unit, we are going ahead with readvertising the unit and finalising the offers by March 30, 1986". From the above, it is manifest that: (i) the UPFC declined to show the unit to the intending purchasers; this was on instructions from Government: (ii) as a result, several reputed manufacturers of electronic items refrained from giving their offers; (iii) the UPFC was of the view that upon proper advertisements and persuasion, handsome amount would be offered on sale of the unit. (iv) the UPFC expressed intention to readvertise the unit for inviting better and further offers. 17. In between, there was effort at different levels to put an end to the stalemate. In this direction, there was a meeting between the UPLC and M/s Anand Electronics on July 3, 1985, as recorded in the minutes (Annexure 10 to the writ petition). M/s Anand Electronics offered to purchase the shareholdings of the UPLC for a sum of Rs. 28.5 lakhs upon certain conditions specified in para 4 being fulfilled. It could not have been without the knowledge of the UPLC. Indeed on July 25, 1985, the UPLC wrote to managing director, UPFC intimating that an official be deputed to enable inventory being prepared of plant, machinery and stocks, etc. in presence of the parties' representatives 'for assistance by the financial institutions towards reopening of the unit (Annexure 12). Dispute arose, however, over the preparation of proper inventory (Annexures 13/14). 'The Bank of Baroda declined to increase its commitments until the dispute was resolved (Annexures 15/16) dated September 24, 1985/October 15, 1985. Effort was made then to reconstitute the board of directors of the company. In this connection the nominees of the UPLC on the board resigned; Dr. Dispute arose, however, over the preparation of proper inventory (Annexures 13/14). 'The Bank of Baroda declined to increase its commitments until the dispute was resolved (Annexures 15/16) dated September 24, 1985/October 15, 1985. Effort was made then to reconstitute the board of directors of the company. In this connection the nominees of the UPLC on the board resigned; Dr. J Tandon of M/s Anand Electronics offered to stcp down proposing that Vijay Tandon be made managing director of the company; a proposal came that Director of Industries be nominated as Director/Chairman of the company. This suggestion was by the Working Managing Director of the UPFC on December 9, 1985 (Annexure 19). Inter institutional meeting took place on December 11, 1985 in which some important decisions were arrived at. General Manager, U PFC (who presided over the deliberations) informed that the directors including the Chairman nominated by the UPLC had resigned and Dr. J Tandon had resigned too as the managing director of the company. Director of Industries was nominated as the Chairman. It was agreed that the managing director be some outside professional. Till such time as it took place, it was decided that Vijay Tandon, executive director nominated by the petitioner no. 2. be given the powers of the managing director. The post of the managing director was to be advertised and filled within 60 days. The minutes record also that: "Mr. Siraj Hussain (General Manager, UPFC) agreed that UPFC would carry out the viability study of the unit and a report would be submitted within 15 days. It was also decided that a meeting of the freshly constituted board would be held at the earliest to adopt the viability report." Mr. Siraj Hussain informed the participants that UPFC expects to arrange for the nomination for UPLC's directors on the board at the earliest." (Annexure 22) 18. The nomination was to be made by the Principal Secretary, Industries, UP Government. If things had gone through as decided in this meeting, the company will have had perhaps a new chapter to work upon; but this did not come about. The nomination was to be made by the Principal Secretary, Industries, UP Government. If things had gone through as decided in this meeting, the company will have had perhaps a new chapter to work upon; but this did not come about. Sri Tandon contends that the UPFC took upon if itself to reconstitute the board of directors by nominating those representing the UPLC but it failed and in face of the representations made at this meeting dated December 11, 1985 there is promissory estoppel operating against the respondent no I which precluded it from proceeding with the sale of the unit. It is difficult to subscribe to this proposition for obvious reasons. To nominate its nominees in the board of directors was the option or responsibility of the UPLC which is an independent legal entity in its own rights. The attempt of the UPFC to secure the nomination could only be persuasive in nature; the alleged representation was that the" U PFC expects to arrange for the nomination for UPLC's directors on the board at the earliest". This may not be treated as firm commitment giving rise to legal obligation. It happens frequently that language which reads at first sight as a promise, or contains promissory expression, may be shown to have been intended as a statement of the fact of an existing purpose. It is not possible to succeed on this score unless there is established a representation which the other party will be estopped from contradicting and the statement on which he relies cannot reasonably be interpreted otherwise than as a promise. In Estoppel by Representation: Spencer Bower & Turner at p 36. the learned authors observes: "A statement of the representor's or of a third person's opinion, belief, or information, as such, is a statement of the fact that the representor or such third person, entertains such opinion or belief, or is in possession of such information, as the case may be, and in that sense, and to that extent, but not further or otherwise, is a representation. It is not a representation in the sense of a statement that the facts to which it relates are actually as he represents or believes them to be, or is informed that they are; and, there is no estoppel, therefore, against denying the correctness of the opinion, belief, or information." 19. It is not a representation in the sense of a statement that the facts to which it relates are actually as he represents or believes them to be, or is informed that they are; and, there is no estoppel, therefore, against denying the correctness of the opinion, belief, or information." 19. To attract promissory estoppel, one of the essential ingredients has to be that, "one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future." Motilal Padantpat Sugar Mills Co. (P) Ltd. v. State of UP (1979) 2 SCC 641; Gujarat State Financial Corporation v. Mls. Lotus Hotel Pvt. Ltd. (1983) 3 SCC 379 ; Union of India v. Godfrey Philips and Co. AIR 1986 SC 806 . No such representation exists in this case. Nor does the endeavour made to resolve the dissensions between the two sets of promotes or recognising the board of directors reflect that action in pursuance of the notice issued under section 29(1) was abandoned. The notice dated February 23, 1985 was throughout kept alive; the company had desired that further action thereon be kept in abeyance; the effort in the direction of rehabilitation was not inconsistent and it was without prejudice to the UPFC pursuing its cause, if the negotiations did not bear fruit. 20. General Manager, UPFC held out no doubt in the meeting on December 11, 1985, that viability study of the unit would be carried out and the report submitted within 15 days and the freshly constituted board would be held to adopt the report. The board did not come to be constituted for reasons not within his control. For purposes of assessing viability to rehabilitate, the UPFC asked the company through its letter dated December 17, 1985 to submit requisite dates in the form of checklist (Annexure CA 2), In para 21 of the writ petition, the receipt of this checklist is admitted by the petitioners. In response to this, the company barely sent an extract to the Bank of Baroda on December 25, 1985 asking for assistance (Annexure-23) but there came no reply to the UPFC in the absence whereof the rehabilitation programme could not be drawn. In response to this, the company barely sent an extract to the Bank of Baroda on December 25, 1985 asking for assistance (Annexure-23) but there came no reply to the UPFC in the absence whereof the rehabilitation programme could not be drawn. The company is not entitled to have its own conduct brushed aside in adjudging whether there is bar of promissory estoppel against the respondent no 1. In our opinion, in the circumstances of the case, there is no such bar operating. 21. Let us now consider the manner in which the agreement to transfer by sale inter relations was negotiated by the UPFC with M/s Trident Electronics Pvt Ltd dated May 17, 1986, for consideration of Rs. 84.14 lakhs. Certain features of the transaction are of considerable significance and may not be overlooked. These may best be dealt with as follows : (1) The notice under section 29(f) of the Act was given on February 23, 1985. The time-limit specified was 45 days which expired on April, 8, 1985 on which date the possession and management of the undertaking were taken over. The notice to make sale by auction was given on April 22, 1985 and published in certain newspapers of the country (Annexure 9 to the writ petition). This notice gave time till May 10, 1985, to submit sealed tenders accompanied with earnest money, i.e., Rs. 25,000 only. We have it from the counter affidavit of UPFC that certain offers were received in pursuance to the advertisement. Particulars of these offers (with the exception of one) such as the amount, the solvency or capability of the parties, the dates are nowhere disclosed. The only one offer which is specified was of M/s Balaji Vegetable Products Pvt Ltd Sitapur dated May 25, 1985 to liquidate the outstandings of the UPFC and the Picup upto March 30, 1985, amounting to Rs. 68.73 lakhs which was not accepted being considered inadequate. It appears the State Government had reservations about transfer of the unit by sale. On April 29, 1985 there was a resolution passed by the board of directors, UPFC to the effect that the disposal of the unit be done after ascertaining the views of the State Government. 68.73 lakhs which was not accepted being considered inadequate. It appears the State Government had reservations about transfer of the unit by sale. On April 29, 1985 there was a resolution passed by the board of directors, UPFC to the effect that the disposal of the unit be done after ascertaining the views of the State Government. Letter dated March 10, 1986 from the managing director UPFC to the company vide Annexure RA III which has been reproduced above throws abundant light as to how the matter was intended to be processed. This refers also to instructions of Government and says that on the basis thereof, the unit was not shown to the intending purchasers. It adds that on this account many reputed manufacturers of electronic items in the country could not give their offers. There is confidence expressed that upon advertisement and persuasions, the UPFC may receive handsome amount on the sale of the assets of the unit. It was given out "we are going ahead with re-advertising the unit and finalising the offers by March 30, 1986." On their own showing thus insofar as the advertisement made by notice dated April 22, 1985 is concerned, it was rendered abortive. There was disinclination on the part of the State Government to dispose of the unit by sale. We are not aware of the offers made in pursuance of the advertisement except the one of Balaji mentioned above and even those who may have desired naturally to inspect the unit before making their bids through tenders were not permitted to do so. The UPFC, it is true, did not formally recall the notice dated April 22, 1985 for sale; but all the same, it is undeniable that the same was not given effect to. It was treated by the respondent No 1 themselves as inoperative and intention was expressed by them to take recourse to readvertise asking for fresh tenders. (2) During April 1985 to December, 1985, there was effort made towards rehabilitation of the unit and to bring about a reconciliation of the existing differences or disputes between the two sets of promotes. In this direction, there was a proposal by M/s Anand Electronics at one stage for purchase of shares of the UPLC which did not take shape. (2) During April 1985 to December, 1985, there was effort made towards rehabilitation of the unit and to bring about a reconciliation of the existing differences or disputes between the two sets of promotes. In this direction, there was a proposal by M/s Anand Electronics at one stage for purchase of shares of the UPLC which did not take shape. Alternative proposal was mooted on or about July 3, 1985 for the sale of their shareholdings by M/s Anand Electronics to UPLC for a sum of Rs. 2.50 lakhs which too did not materialise where after some tentative decisions were taken on December 11, 1985 to re-constitute the board of directors; but this again remained unexecuted. The rehabilitation attempted was in the form of a package deal which having failed to come up, the UPFC, entertained the intention as appearing from the letter dated March 10, 1986 to re-advertise the unit for disposal by sale by auction taking into account the competitive offers of the prospective buyers. We are not told what led the UPFC soon afterwards to change their mind subsequent to March 10, 1986 and fall back upon transfer by sale and not through tenders publicly invited. It has remained a mystery. (3) According to the respondent No. 1 as appearing from the counter affidavit, the representatives of certain financial institutions and 13 prospective buyers were called upon to come up on April 4, 1986, but it is stated that only two buyers turned up, one of whom was M/s Balaji and the other consisted of the respondent No. 3. Here again we are in dark entirely as to on what basis the alleged 13 prospective buyers were sorted out and in case there was any offer by any of them at earlier stages as to what were the relevant contents thereof. In case the UPFC entertained an expectation that at least some of these 13 sets of buyers might be interested in going through the purchase, it does not appear prudent or reasonable that it should not have been thought proper to give them an opportunity over again instead of seeking to finalise the proceedings in break neck hurry, especially since the notice to sell had remained unexecuted for the reasons covering the period of nearly one year in the past. UPFC would make us believe that the negotiations were finalised on April 5, 1986 itself which, as will presently appear, is also not free from being highly discrepant. (4) Contention for the petitioners inter alia is that they were not associated with the negotiations in respect of the sale of the unit..In the backdrop of the efforts made for rehabilitation culminating into the meeting of the representatives dated December 11, 1986 there could be a legitmate impression created on the mind of the petitioners that there was no immediate apprehension as to the unit being disposed of by sale. There could be a belief created undoubtedly that the UPFC was desirous of adopting alternative ways and means to have the company functioning and this impression should have been further confirmed from what the managing director wrote on 10 March 1986. In paragraph 29 of the writ petition it is averned that the representative of the petitioner met the managing director UPFC even on May, 2, 1986 but they were not told anything regarding sale of the unit being in the offing or as to the negotiations in respect thereof having made a headway. The averment contained in paragraph 29, to this effect is not to be found rebutted in the counter affidavit. The company has had a vital interest in the matter both because the undertaking belonged to it till it was taken over on April 8, 1985 and also since the residue, if any out of the sale proceeds shall have to go to the company in any case for its benefit. May be the persons interested in the affairs of the company could have made offer to make purchase themselves by placing competitive bids or they may have been of instrumental in finding other customers prepared to offer more attractive bids. To shut them out of the area taking scrupulous care to finalise the negotiations behind their back while giving them an impression all the time that there had to be fresh advertisement made may not be regarded fair or equitable. (5) From he record, it would appear then that on May 5, 1986 as soon as the petitioners come to know of the negotiations being in progress, there was a meeting held by them with the Chief Minister, UP. (5) From he record, it would appear then that on May 5, 1986 as soon as the petitioners come to know of the negotiations being in progress, there was a meeting held by them with the Chief Minister, UP. The Chief Minister, it is stated, issued a directive to the managing director UPFC not to proceed with the sale of the unit. B S Sinha, Managing Director, UPFC states in the affidavit which he filed in reply that on May 5, 1986 he happened to be in the secretariat and that on coming to know of the direction, he met the Special Secretary, Industries and also the Joint Secretary to the Chief Minister on the same day and informed them that the sale of the unit had been finalised in favour of M/s. Trident Electronics Pvt Ltd which indeed as presently appears could not have been possible. (6) The agreement to sell which the petitioners have placed on the record is dated May 17, 1986. It was presented for registration the same day and the registration took place on November 11, 1986. The recital contained in this agreement shows that the respondent no. 3 was authorised by resolution of the board of directors M/s Trident Electronics Pvt Ltd on May 15, 1986 to enter into the transaction; the application for registration of M/s Trident Electronics Pvt Ltd was itself made on May 8, 1986 and it was incorporated with effect from May 15, 1986. On April 5, 1986 or near about, this had not even been brought into being so as to lead the UPFC to finalise the negotiations in its favour by passing the other prospective buyers who had not been given an opportunity even to inspect the unit in order to make their bids. It has also submitted for the petitioners and not without force that the respondent no 3 had been heavily indebted but was accorded a preferential treatment. Under the name and style of M/s Triveni Metal Tubes Ltd. and M/s Anand Motor the respondents no 3 had taken loan from the UPFC. In the year 1984-85 the principal outstanding was Rs. 18.29 lakhs approximately; at the end of December, 1984 interest had been calculated to nearly Rs. Under the name and style of M/s Triveni Metal Tubes Ltd. and M/s Anand Motor the respondents no 3 had taken loan from the UPFC. In the year 1984-85 the principal outstanding was Rs. 18.29 lakhs approximately; at the end of December, 1984 interest had been calculated to nearly Rs. 23.42 lakhs and it rose to about 28.87 lakhs upto December 31, 1986 vide Annexure SCA II wheareas in relation to the company, the outstanding amount of interest was nearly Rs. 5.39 lakhs and odd only. Neither in the counter affidavit filed for the UPFC nor in the counter put in on behalf of the respondent no 3 we are apprised of any special reasons which as the expertise or the past experience in these matters to justify this preferential treatment in favour of a newly constituted concern. 22. Allied to this is the question of consideration for which the impugned agreement to sell was entered into. Admittedly it comprises of 7.00 acres of land in plot No 8, Block 'S', Panki Industrial Estate, Kanpur. The land is fully developed with boundary walls of which nearly 1.00 acre is covered by buildings. There is also no dispute that the factory is equipped with the total plant imported from the United Kingdom in perfect running condition. Prior to take over, it was engaged in the manufacture of black and white television picture tubes. The viability of the unit has not been challenged by the respondents either, nor has a doubt been raised as to the availability of extensive market for the consumption of the articles such as this unit is capable of producing. In paragraph 13 of the counter affidavit on behalf of UPFC to significant narration is "after long negotiations the respondent no 3 agreed to purchase the assets of the unit which was unequivalent to the total outstanding dues as on March 31, 1986 of UPFC, Picup and the Bank of India which came to Rs. 84.14 lakhs. "The criterion for determining the price which the UPFC adopted thus was that the amount would liquidate the out-standings of the UPFC, Picup and the Bank of India. This is reflected also from the recital in the agreement to sell which too points out that M/s Trident Electronics Pvt Ltd agreed to purchase for "a sale consideration of Rs. "The criterion for determining the price which the UPFC adopted thus was that the amount would liquidate the out-standings of the UPFC, Picup and the Bank of India. This is reflected also from the recital in the agreement to sell which too points out that M/s Trident Electronics Pvt Ltd agreed to purchase for "a sale consideration of Rs. 82 lakhs approximately, that is to say, term loan and liabilities upto March 31, 1986". Instead of effort made to ascertaining the approximate market value upon competitive rates or offers made on the basis of which the concerned party chose to adopt was that the amount should be such as meets the dues of certain financial institutions. This, it is rightly submitted by Sri Tandon, could not be made a safe guide. It was also urged in this connection by Sri Tandon that the land alone would cost Rs. 250 per square yards. For this the Court is referred to the communication received from the Kanpur Development Authority pointing out that ever since March 1, 1984, the prevailing rate in the Panki Industrial Area is Rs. 250 per sq. yds, or land adjacent to roads of the width of more than 60' as in this case. By this calculation the valuation of the land alone would come to nearly Rs. 84.70 lakhs. The UPFC does not appear to have considered at any point of time whether the realisation of the outstandings could not be had by disposing of part of the land alone instead of the entire unit as such. It does not seem to have been considered either whether the unit could not be run profitably even on being deprived of part of the extensive land appurtaining the built structure. The approach made was unimaginative and not business-like or consistent with the dominant purpose of the Act. Sri S N Upadhyaya, learned counsel for the UPFC invited our attention to the report of M/ s J N Dube and Associates, Kanpur, dated March 30, 1986, filed along with the supplementary counter affidavit on January 22, 1987. We have perused this report also, but find that that is of no real assistance in the absence of any supporting dates. Land has been valued at the rate of Rs. 80 per sq. yds, only without any indication of the basis for so doing. We have perused this report also, but find that that is of no real assistance in the absence of any supporting dates. Land has been valued at the rate of Rs. 80 per sq. yds, only without any indication of the basis for so doing. No examples are referred to for taking the view that this is the prevailing rate on the main road in the Panki Industrial Area nor is there any consideration of the prevailing rates as per the report of the Kanpur Development Authority. In respect of the plant and machinery likewise indicated. It may not be lost sight of. Moreover, that there is no indication in the counter affidavit from the side of the UPFC that the existing market value was the criterion adopted for the price which was settled upon. They proceeded instead on the consideration of wiping out the outstanding of certain financial units upto a particular date. The same is true with respect to the extract from the balance sheet for the year ending June 30, 1981, upon which Sri S P Gupta learned counsel, for the respondent no 3 lays emphasis. It was urged that this extract attached to the counter affidavit filed for the respondent the total assets on June 30, 1981 w.re shown to be Rs. 94.78 lakhs approximately including project expenses amount to Rs. 23.78 lakhs and that on deduction thereof the valuation of the fixed assets would come to nearly Rs. 71.00 lakhs. That is of little relevance when on the UPFC's own showing the governing idea was that the price should be such as liquidates the outstanding dues. 23. The Financial Corporations established under the State Financial Corporations Act, 1951 have been conceived as Regional Development Bank for accelerating the industrial growth in States by providing financial assistance mainly to small and smaller of the medium scale industries (see: Statement of Objects and Reasons: State Financial Corporations (Amendment) Act, 1985 (Central Act 43 of 1985). These Corporations are designed to function as developmental agencies. Section 29 of the Act confers wide powers including the right to transfer by way of lease or sale. Thereunder the Financial Corporation may take possession of the debtor's property without any adjudication by any judicial authority, the object being to save public money from unscrupulous or inefficient entrepreneurs. These Corporations are designed to function as developmental agencies. Section 29 of the Act confers wide powers including the right to transfer by way of lease or sale. Thereunder the Financial Corporation may take possession of the debtor's property without any adjudication by any judicial authority, the object being to save public money from unscrupulous or inefficient entrepreneurs. Being an Instrumentality of the State, the Corporation is 'other authority' under Article 12 of the Constitution (vide Gujarat State Financial Corporation v. Lotus Hotels (1983) 3 SCC 379 . Adverting to the justiciability of questions like sale of public property by public bodies in Fertilizer Corporation Kanrgar Union & Others v. Union of India & Others (1981) 1 SCC 568 Krishna lyer J., observed at page 588-89: "Certainly, it is not part of the judicial process to examine entrepreneurial activities to ferret out flaws. The Court is least equipped for such oversights. Nor, indeed, is it a function of the Judges in our constitutional scheme. We do not think that the internal management, business activity or institutional operation of public bodies can be subjected to inspection by the Court. To do so, is incompetent and improper and, therefore, out of bounds. Nevertheless, the broad parameters of fairness in administration, bona fides in action, and the fundamental rules of reasonable management of public business, if breached, will become justiciable." 24. True, the UPFC in the instant case had to deal with private property; but in so doing the norms of fairness must nonetheless be observed. A public body in dealings with the person or property of individuals can neither be reckless nor arbitrary. As held by the Supreme Court in R D Shetty v. International Airport Authority of India (1979) 3 SCC 489 the rule inhibiting arbitrary action by the Government would equally apply where such corporation is dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance. 25. Sri S P Gupta rightly submits that it is not easy to find ready customers for the purchase of such an undertaking which involves the investment of substantial amounts. But this is all the more reason why an intended sale of such concern receives wide publicity and is conducted with openness and reasonable prudence. 25. Sri S P Gupta rightly submits that it is not easy to find ready customers for the purchase of such an undertaking which involves the investment of substantial amounts. But this is all the more reason why an intended sale of such concern receives wide publicity and is conducted with openness and reasonable prudence. The sale proceeds are held in trust by the UPFC-the company being entitled to receive the residue section 29 (4). The publication made in newspapers in April, 1985, was followed by a lull for nearly a year during which meetings and conferences to carve out rehabilitation package took place. Those who may have felt interested to enter into the venture as publication in the newspapers may have lost track of what transpired indoors. The intending buyers could have reason to be disappointed upon not being permitted to inspect the unit. Government's disinclination to make sale could also act as a disincentive. During the period of one year intervening, there had not been many such offers as to justify giving a second thought and resiling from the course of public auction through tenders. The meeting proposed on April 4, 1986, brought barely two sets one of whom namely, M/s Balaji had been rejected earlier and the other consisting of respondent nos. 3/4 had not submitted any tender at all. This evidently should have been regarded a poor response suggesting further effort to invite competitive bids of necessary by putting off the deliberations instead of rushing up to conclude the deal allegedly on April 5, 1986, though the buyer company had not even been incorporated till then. The expertise acquired or past experience to run the industry are not referred to either. The object of the Act is not sub-served by closing down an otherwise viable unit and making realisation of the outstandings. The feasibility or proceeding against part of the land in this connection does not seem to have been considered either. The UPFC seems to have grabbed the offer of the respondents nos. 3 and 4 just because that would liquidate certain outstandings but it was overlooked that the Act is not solely or primarily an Act for authorising money lending business by the State Financial Corporation. The primary purpose, as mentioned above, is to develop medium and small scale industries for which financial aid has become a matter of necessity. 3 and 4 just because that would liquidate certain outstandings but it was overlooked that the Act is not solely or primarily an Act for authorising money lending business by the State Financial Corporation. The primary purpose, as mentioned above, is to develop medium and small scale industries for which financial aid has become a matter of necessity. On these considerations, the Act has been found to fall within the legislative competence of the Parliament under Entries 43/45, List I in the Seventh Schedule of the Constitution. Engineers (Oversears) Corporation Pit Ltd v. W B Financial Corporation, etc. (89 CWN 700); Chargola Tea Co v. Assam Financial Corporation AIR 1973 Assam 136. 26. Sri S N Upadhyaya argued that due to having taken recourse to the publication inviting tenders, the UPFC was not precluded from resorting later to negotiations. In support, he cites following passage from State of Orissa etc. v. Harinarayan Jaisiral and Others (1972) 2 SCC 36 ) at page 45. "It was next urged that having had recourse to the auction method once, the Government was precluded from either calling for tenders or to sell by negotiation. The high Court has accepted that contention. We are unable to agree with the High Court in its conclusion. Neither the provisions of the Act nor the order issued by the Government lend any support to such a conclusion. Once the Government declined to accept the highest bid, the auction held became useless. Similar is the effect when the Government refused to accept the highest tender. That left the Government free to have recourse to other methods. The power given to the Government by the Act to sell the exclusive privilege in such other manner as it thinks fit is a very wide power. That power is unrestricted. It undoubtedly included the power to sell the privileges in question by private negotiation." There can be no denial as to the generality of this principle; but in application the pros and cons of each case would necessarily have to be weighed. The basic premise underlying the sale by auction was thus laid down in Fertilizer Corporation Kann gar Union (supra). "The authorities then sent for the nine tenderers and negotiated with them across the table. The basic premise underlying the sale by auction was thus laid down in Fertilizer Corporation Kann gar Union (supra). "The authorities then sent for the nine tenderers and negotiated with them across the table. We want to make it clear that we do not doubt the bona fides of the authorities, but as far as possible, sales of public property, when the intention is to get the best price, ought to take place publicly. The vendors are not necessarily bound to accept the highest or any other offer, but the public at least gets the satisfaction that the Government has put all its cards on the table. In the instant case, the officers who were concerned with the sale have inevitably, though unjustifiably, attracted the criticism that during the course of negotiations the original bid was reduced without a justifying cause." 27. Sri Gupta laid emphasis on the last sentence appearing in para 21 "One cannot exclude the possibility that a better price might have been realised in a fresh public auction, but such possibilities cannot vitiate the sale or justify the allegation of mala fides." This must be viewed in the context of the preceding observations in para 21 itself. It is not the mere inadequacy of the price settled upon which is under challenge in the case before us but the overall lack of fairness in which the transaction was hatched coupled with the criterion adopted to arrive at the negotiated amount. The present is not a case of putting up a new industry in which it is not at all necessary that the State Government should advertise and invite offers for putting up such industry. In Kasturi Lal Lakshmi Reddy v. State of J & K (1980) 4 SC 1 (cited with approval in State of MP v. Nandlal Jaismral & Others (1986) 4 SCC 566 ), the distinction highlighted was : "if the State were giving tapping contract simpliciter there can be no doubt that the State would have to auction or invite tenders for securing the highest price, subject, of course, to any other relevant overriding considerations of public weal or interest, but in a case like this where the State is allocating resources such as water, power, raw materials, etc. for the purpose of encouraging setting up of industries within the State, we do not think the State is bound to advertise and tell the people that it wants a particular industry to be set up within the State and invite those interested to come up with proposals for the purpose. The State may choose to do so, if it thinks fit; and in a given situation, it may even turn to be advantageous for the State to do so, but if any private party comes before the State and offers to set up an industry, the State would not be committing breach of any constitutional or legal obligation if it negotiates with such party and agrees to provide resources and other facilities for the purpose of setting up the industry." 28. Section 29 undoubtedly does not prescribe any one particular mode for disposal., It is left to the discretion of the Corporation. But as observed in Wade's Administration Law (5th ed.) p. 347, "The first requirement is the recognition that all powers have legal limits, the next requirement, no less vital, is that the Court should draw this limit in a way which strikes the most suitable balance between executive efficiency and legal protection of the citizen. Arbitrary power and unfettered discretion are what the Courts refuse to countenance." Discretion of a statutory body is never unfettered. It is a discretion which is to be exercised according to law. It has to be guided by relevant consideration or else is liable to be set aside even if it proceeds in good faith. The State should not seek to defeat the legitimate claim of the citizen by adopting the legalistic attitude but should do what fairness and justice demand. Hindustan Sugar Mills v. State of Rajasthan AIR 1981 SC 1681 . In Chenchu Rami Reddy & Another v. Government of AP & Others ( AIR 1986 SC 1158 ) in respect of sale of land belonging to a charitable endowment, the caution administered by the Supreme Court was : "Those who are willing to purchase by private negotiations, can also bid at a public auction. Why would they feel shy or be deterred from bidding at a public auction ? Why would they feel shy or be deterred from bidding at a public auction ? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify doing so and care must be taken to fix a reserve price after ascertaining the market value for the sake of safeguarding the interest of the endowment." 29. We must not be understood to say that in no case, may the UPFC finalise the deal by negotiations even if it has initially advertised for tenders. For good and sufficient reasons or upon a change of policy according to the demands of the situation or in public interest, it may in a given case switchover to negotiations. This depends on the facts and circumstances of a case. But where there is no such reason suggested, nor an apparent basis giving rise to a compelling situation for change of mind within about two months or an unusually attractive offer shown to exist, the modality adopted by the respondent no I fails to command itself. The submission made by Sri Gupta that the petitioners have not guaranteed that the price fetched upon auction may be higher, is no substitute to wipe off the infirmities attending this transaction. M/s Trident Electronics Pvt Ltd or the respondent nos 3 and 4 for that matter are not barred from offering their bid too in competition with others in the field. 30. Before concluding we must advert to the contention of Sri S P Gupta that the writ petition as framed is not maintainable. M/s Uptron Anand Ltd. (petitioner no 1) being a company registered under the Companies Act, 1956, is a juristic person and competent as such to proceed under Article 226 of the Constitution in respect of its rights and liabilities under the law. The objection raised is that the pleading is bad since the company is arraigned through its director Rain Kumar Tandon; but there is no resolution of the board of directors conferring authority upon him. The objection raised is that the pleading is bad since the company is arraigned through its director Rain Kumar Tandon; but there is no resolution of the board of directors conferring authority upon him. Sri Gupta refers to section 291 of the Companies Act which empowers the board of directors to exercise all such powers and to do all such acts and things as the company is authorised to exercise and do and cites Palmer's Company Precedents Part I page 563 (16th ed), according to which a director as an individual director has no power to act on behalf of the company. He is only of a body of directors called the board, and alone has no power except such as may be delegated to him by the board or given to him by the articles of association. We must not forget that in the case before us, the petition is by the company in its own rights and not by an individual as director or the like. The director is mentioned for purposes merely of convenience in the matter of service of process, etc. It is unnecessary to refer back to the deliberation held on December 11, 1985, which bear out that the board of directors remains unconstituted; Ram Kumar Tandon is a person interested in the affairs of the company being one of the nominees of M/s Anand Electronics on the board. The argument that a judgment in such a case may not bind the company is not possessed of merit. There is no room to doubt that the jurisdiction of the Court to grant relief cannot be denied even where an executive measure impairs the rights of the shareholders as well as the company (vide Bank Nationalisation case AIR 1970 SC 564 ; Bennett Coleman & Co Ltd.& Ors. AIR 1973 SC 106 ). In relation to the petitioner no 2, the partnership firm, it may no doubt be maintained that it is not a legal entity and the persons affected may be the individual partners-shareholders but not the firm. Since, however, the company is the petitioner, the petition does not fail on this count.) 31. Upon the entire discussion, the irresistible conclusion we are led to is that the notice dated Febuary 23, 1985, issued under section 29(1) of the State Financial Corporation Act, 1951, is valid and remains alive. Since, however, the company is the petitioner, the petition does not fail on this count.) 31. Upon the entire discussion, the irresistible conclusion we are led to is that the notice dated Febuary 23, 1985, issued under section 29(1) of the State Financial Corporation Act, 1951, is valid and remains alive. But the subsequent notice dated April 22, 1985, which is Annexure 9' to the writ petition is exhausted. We hope and trust that the UPFC shall, in due discharge of its statutory responsibilities to further the purpose of the Act, strive further to rehabilitate M/s Uptron Anand Limited; and to this there will be co-operation extended of all concerned. But if this is not achieved within a reasonable period, the Corporation shall be within its rights in proceeding afresh to dispose of the unit in accordance with law and in the light of the observations contained in this judgment. We direct the financial corporation accordingly, and further that there shall be no transfer by sale made in pursuance to the agreement to sell dated May 17, 1986, entered into with M/s Trident Electrical Pvt Ltd. 32. The petition is allowed to this extent only. In the circumstances, there will be no order as to the costs.