JUDGMENT Devinder Gupta, J.—The petitioner in this writ petition filed under Articles 226/227 of the Constitution of India has questioned the action of respondent No. 2, in taking over of his unit under the provisions of section 29 of the State Financial Corporations Act, 1951 (hereinafter to be called as ‘the Act) as also its sale in favour of respondent No, 3, on number of grounds. 2. It is alleged that the petitioner set up a unit, which came in production in the month of March, 1984, after he had raised a loan of Rs. 2,18,000 from respondent No 2 and spent another sum of about Rs. 2,05,000 from out of his own rescources After having come in production, petitioner started repaying the amount of loan and till December 1986 a sum of Rs. ^8,2 0 had been repaid, where after it could not be repaid because of his having suffered unforseen heavy losses, which were beyond his control. Tbe basis for suffering losses are stated as change in the governments policy in the levying of Excise duty on the products being manufactured by the petitioner as also introduction of new technology for retreading the tyres. Petitioner approached respondent No 2 for providing additional resources/finances so as to enable him to modernise the process of manufacturing, in accordance with the new technology, which request was not acceded to and due to paucity of funds it became almost impossible for the petitioner to cope with the business commitments and repay the amount of loan. 3. It is also alleged that abruptly, without any justifiable cause, the Financial Corporation took over the possession of the unit in the absence of its owner. After having come to know of the same, efforts were made by the petitioner in paying more amount and by the last week of August, 198" a total amount of Rs. 1,53,230 had been paid. It is also alleged that the procedure prescribed under law was not followed and drastic action was taken without issuing any notice to the petitioner and affording him a reasonable opportunity. It is also alleged that after the taking over of the factory, the same was not run by respondent No. 2 but was locked and suddenly it was auctioned on 29th February, 1992. It is also alleged that after the taking over of the factory, the same was not run by respondent No. 2 but was locked and suddenly it was auctioned on 29th February, 1992. Before putting the unit to sale, no notice was given to the petitioner and no opportunity was afforded to him to procure better buyers and even no chance was given to him to liquidate the outstanding debt. It is also the case of the petitioner that respondent No. 2 resorted to unfair and dishonest means in finalising the deal in favour of respondent No. 3. 4 After having come to know, through a friend, that the unit had been auctioned, the petitioner approached respondent No. 2 and also contacted a commission agent, dealing in sale and purchase of buildings and machinery and finally got negotiation completed with one firm, namely, Mentor, who expressed its willingness through letter dated 8th March, 1992 to purchase the building and machinery for Rs. 3,05,000. After finding prospective buyer, petitioner again approached respondent No. 2 by contacting one Mr Joshi to negotiate with the buyer, who expressed his unwillingness and informed the petitioner that a communication had been addressed to him asking to be present in tbe office of the Corporation on 24th March, 1992, on which the petitioner informed that no such intimation was ever received by him for 24th March, 1992 In fact, he did receive a communication on 25th March, 1992 asking him to be present in the office of the Corporation on 24th February, 1992 for negotiations. The letter had been anti-dated It is alleged that for a paltry sum of Rs. 1,62,000 his unit worth Rs 8,00,000 was sold to respondent No. 3. Consequently, the prayer has been made to quash the proceedings for taking over as also the sale and to direct respondent No. 2 not to handover the possession of the unit to respondent No. 3, An application for interim relief was also made. 5, On 14th April, 1992, while issuing notice to the respondents, an interim order was passed directing the sale in favour of respondent No. 3, if not already confirmed, shall not be confirmed and respondents were restrained from alienating land, machinery and factory. This was subject to the petitioners depositing a sum of Rs. 50,000 on or before 24th April, 1992. 6. Respondents I to 3 have filed their separate returns. This was subject to the petitioners depositing a sum of Rs. 50,000 on or before 24th April, 1992. 6. Respondents I to 3 have filed their separate returns. We need not refer to the return filed by respondent No. 1. Reference will be made to the returns filed by respondents 2 and 3 only. 7. Respondent No. 2 filed its return on the affidavit of Mr. S. K> Gupta, General Manager It is stated that the total cost of the petitioners project was assessed at Rs. ^,18,000 and against that a loan to the tune of Rs 2,18,000 was provided by respondent No 2. Rs 43,000 were to be adjusted by way of subsidy and the proprietors share was assessed at Rs 67,100. It is not disputed that the unit was set up and that it came in production in April 1984, In para 7, it is stated that only a sum of Rs. 32,000 was paid by the petitioner by 17th December, 1986 against which he ought to have paid a sum of Rs. 1,44,022 till 19th December 1986. Ason3st March, 1992, a sura of Rs 2,41,485 75 was due and payable by the petitioner to respondent No 2 It is denied that the petitioner, due to the acts of respondent No 2 was starving insofar as finances are concerned and it is also alleged that in view of the persisting defaults committed by the petitioner from the very beginning, in non-furnishing of certain information, respondent No. 2 was constrained to serve a notice on the February, 19^0 under sections 29 and 30 of the Act, calling upon the petitioner to pay an amount of Rs. 2,51,789 25, including interest from 10th September, 1989 till payment, within a period of one month from the date of issue of notice On petitioners failure to pay the amount, another notice dated 29th May, 1990 was sent to the petitioner informing him about the decision of the Corporation to take over the possession of the mortgaged/hypothecated assets on 12th June, 1990 and it is alleged that ultimately the unit was taken over on the said date, since the petitioner failed to comply with the demand made by respondent No. 2. 8. 8. On the point of sale, it is alleged that after the unit had been taken over and respondent-Corporation was satisfied that it will not be appropriate to allow the amount already due to further pile up, it was decided to dispose of the unit by public auction, which took place on 29th February, 1992, on which date Mr Ashok Kumar Jain, proprietor of the petitioner was present and had also signed the bid-sheet. Before selling the unit, the respondent-Corporation had advertised the unit twice but due to non-availability of better buyer, it could not be sold earlier and it was only on the 3rd attempt that it was put to auction on 29th February, 1992, in which only five bidders participated. The highest offer was that of respondent No. 3 of Rs. 1,51,000. The petitioner was thereafter informed to bring a better buyer, which he failed to do, therefore, the Corporation, in order to receive better price, asked all the participants for further negotiation, which was held on 24th March, 1^92, for which also a notice was given to the petitioner. The petitioner failed to attend the negotiations. In the said negotiations, respondent No 3 raised its offer to Rs. 1,62,000 and as a prudent businessman, respondent No. 2 finalised the deal with respondent No. 3. The respondent-Corporation denied the petitioners assertion that no notice was given to him or that he was not present on the date of auction. On the petitioners plea, that no notice for 24th March, 1992 had been issued, respondent-Corporation alleged that due to some inadvertance, in the notice issued to the petitioner, instead of mentioning the date of negotiation as 24th March, 1992, it was shown as 24th February, 1992 but denied that there was any malice on the part of the respondent-Corporation in doing so. 9. Respondent No 3 also filed its separate return, wherein also the stand taken is that Mr. Ashok Kumar Jain, on behalf of the petitioner was present on the date of auction and at the time of negotiation, the offer was increased to Rs. 1,52,000. 10. After the parties had exchanged their respective affidavits and when the matter came up for admission, in view of the specific stand taken by respondent-Corporation that Mr. Ashok Kumar Jain, on behalf of the petitioner was present on the date of auction and at the time of negotiation, the offer was increased to Rs. 1,52,000. 10. After the parties had exchanged their respective affidavits and when the matter came up for admission, in view of the specific stand taken by respondent-Corporation that Mr. Ashok Kumar Jain, proprietor of the petitioner was present at the time of auction and had signed the bid-sheet, we directed respondent-Corporation to produce the sale record and also called upon Mr. Ashok Kumar Jain to appear in person in Court. On 9th March, 1993, he appeared in person and was shown the original auction notice, photostat copy of which is filed by the respondent-Corporation on the record of the writ petition at page 81. The petitioner denied having signed this auction notice and stated that it does not bear his signature above the word "proprietor M/s. Himachal Rubber Factory, Deon Ghat". The petitioners stand has been that neither he had any notice of sale, nor was he present on that date. 11. In view of the specific denial of Mr. Ashok Kumar Jain of his signature on the document, learned Counsel for respondents 2 and 3 took time to file appropriate affidavits and were allowed two weeks time to do so. Three affidavits were filed by the respondents. The first is that of Mr. S. K. Kansal, Director of respondent No. 3, wherein it is stated that on 24th March, 1991, when negotiations as well as the sale of the unit M/s. Himachal Rubber Factory, Deon Ghat Solan were held, the then proprietor of the unit Mr. Ashok Kumar Jain was present and participated in the negotiations and duly signed the proceedings. In the second affidavit Mr. S. K. Arora, one of the five bidders, who offered their bid, stated that on 24th March, 1991, when the negotiations as well as sale of the unit M/s. Himachal Rubber Factory, Deon Ghat, Solan, was held, the then proprietor of the unit Mr. Ashok Kumar Jain was present and participated In the negotiations and duly signed the proceedings. The third affidavit Is that of Mr B D Kashyap dated 29th March, 1993, who is alleged to have conducted the auction on 29th February, 1992 and states that petitioner Ashok Kumar Jain attended the auction proceedings on the said date and also signed the same. 12. The third affidavit Is that of Mr B D Kashyap dated 29th March, 1993, who is alleged to have conducted the auction on 29th February, 1992 and states that petitioner Ashok Kumar Jain attended the auction proceedings on the said date and also signed the same. 12. After the three affidavits had been filed, the petitioner was permitted to rebut the same, who has again specifically refuted the stand taken by the respondent that he was present on the date of auction and has also pointed out material discrepancies in the three affidavits, which would be noticed hereinafter. 13. Admittedly, the public auction, as per the stand of respondent No. 2, took place on 29th February, 1992, Nowhere in the affidavit of Mr. S. K. Arora and Mr. S K Kansal it is stated that Mr. Ashok Kumar Jain was present on 29th February, 1992, whereas Mr. B. D. Kashyap in his affidavit states that on the date of auction Mr Jain was present and signed the auction proceedings, Annexure R 2/G. The negotiations admittedly had taken place on 24th March, 1992. It is not the stand of respondent-Corporation that the petitioner had attended the negotiations. It is also not the stand of the petitioner that he attended the negotiations. The Corporation has specifically stated that the petitioner was not present on the date of negotiation Thus, both, Mr. S. K. Kansal and Mr. S. K. Arora, in their respective affidavits are not correct in stating that the petitioner was present when negotiations took place. The date of sale and that of negotiation according to the version given by them in their respective affidavits is 24-3-1991 and not as 24-3-1992. 14. Annexure R 2/G at pages 77 and 78 of the file are auction proceedings As has frankly been admitted by the learned Counsel for the respondents, both these sheets have not been signed by Mr. Ashok Kumar Jain. At page 77 is the list of five bidders giving therein the names and addresses of the bidders with the fact of deposit of Rs. 2,000 by each one of them with signatures. Mr Ashok Kumar Jain petitioner has not signed this document At page 78 is the bid list, which gives the amounts of bid offered by the five participants. 2,000 by each one of them with signatures. Mr Ashok Kumar Jain petitioner has not signed this document At page 78 is the bid list, which gives the amounts of bid offered by the five participants. This document is also not signed by Mr Ashok Kumar Jain In case the petitioner was present at the time of auction, there is no reason why his signatures were not obtained on these two documents, which alone are the proceedings for auction. The signatures are alleged to be only on the printed auction notice, which signatures have specifically been denied by Mr. Ashok Kumar Jain when he appeared in the witness box. 15. At the time of hearing, the original auction file was produced by the learned Counsel for the respondent-Corporation. We have gone through the file and had also questioned the learned Counsel for the respondent-Corporation to show us the manner in which the petitioner or its proprietor Mr. Ashok Kumar Jain was informed of the date of auction No document has been brought to our notice from which it can even be inferred that due intimation of the auction date was given to the petitioner. From the affidavits exchanged, as also the auction file, we are satisfied that neither any notice was given to the petitioner informing him of the date of auction, nor he was present at the time of auction The petitioner has denied having signed any bid-sheet or auction notice and no effort has been made to prove the alleged signatures to be that of the petitioner. 16. It is the petitioners case that after having acquired knowledge from his friend that on 29th February, 1993, his unit had been put to auction, he contacted Mr. Joshi of the respondent-Corporation, who informed him that on 16th March, 1992, a notice was sent to him asking him to participate in the negotiations, which were to be held on 24th March, 1992 but he did not appear on the appointed day. The petitioner has further alleged that he informed Mr Joshi that no such letter was ever received by him through which information was given to him that negotiations are to take place on 24th March, 1992. He informed Mr. The petitioner has further alleged that he informed Mr Joshi that no such letter was ever received by him through which information was given to him that negotiations are to take place on 24th March, 1992. He informed Mr. Joshi that on 25th March, 1992, letter Annexure P-3 was received by him through which the information conveyed to him was that the negotiations were to fake place on 24th February, 1992. Since the letter was received on 25th March, 19^2, in which the date mentioned was 24th February, 1992, there was no occasion for the petitioner to remain present before the respondent-Corporation According to the petitioner, Mr. Joshi told him that it was due to some inadvertence that in the letter dated 16th March, 1992, the date was wrongly typed out as 24-2-1992 instead of 24-3-1992. 17. We have gone through the letter Annexure P-3 as also its copy, from the auction file of the respondent-Corporation, which is at page 21 of "the said file. The letter is dated 16-3-1992 The original sent to the petitioner mentions the date and time of negotiation as 24-2-1992 at 3 p m. No doubt, it was dispatched to the petitioner on 16th March, 1992, which according to him was received on 25th March, 1992 Any person receiving such a letter on 25th March, 1992, could not have attended negotiations, even if we assume that the person receiving it in all reasonableness might have taken the date as 24-3-J 992 instead of 24-2 1992. From the record of respondent-Corporation, we find that a correction has been carried out in its copy by changing the date from 2^-2-1992 to 24-3 1992, but there is no correction carried out in the letter sent to the petitioner, which clearly required the petitioner to appear in negotiations on 24-2-1992. Thus from this, we also have no hesitation in holding that no opportunity was afforded to the petitioner even to present himself at the negotiations. Nothing prevented the respondent-Corporation to hold negotiations afresh, after it had acquired the knowledge of the wrong date conveyed to the petitioner. 18. The scope of interference by the Courts in such like cases has been considered in two recent judgments of the Supreme Court, namely, Mahesh Chandra v. Regional Manager, U. P. Financial Corporation and others, AIR 1993 SC 9*5, and I/. 18. The scope of interference by the Courts in such like cases has been considered in two recent judgments of the Supreme Court, namely, Mahesh Chandra v. Regional Manager, U. P. Financial Corporation and others, AIR 1993 SC 9*5, and I/. P. Financial Corporation v. Gem Cap (India) Pvt Ltd- and others, (1993) 2 SCC 299. In Mahesh Chandras case (supra), the Court has held that sub-section (4) of section 29 of the Act treats the Corporation to be a trustee of the debtor or person claiming title through him and it saddles the Corporation or the officer concerned with inbuilt duties, responsibilities and obligations towards the debtor in dealing with the property and entails it to act as a prudent and reasonable man standing in the shoes of the owner. It further says that the Corporation or its officers or servants, as trustee are bound to exercise their power in good faith in selling or dealing with the property of the debtor, as a ordinary prudent man would exercise in the management of his own affairs to preserve and protect his own estate. Therefore, the acts of the officer or servant of the Corporation should be reasonable, just and fair, which must meet the eye and the offer accepted must be competitive and every attempt should be made to secure as maximum price as possible to liquidate the liabilities incurred by the industrial concern or the debtor under the Act. 19. In para 21 of the report, the Court held as under ; "The sale by public auction or tender or private negotiation should bebonafide action First is universally recognised to be the best and most fair method It is expected to fetch best competitive price and is beyond reproach Second should be resorted to rarely only if first is an impossibility. Generally tenders would be calling quotation to execute public work or to award contracts etc And third should always be avoided as it cannot withstand public gaze, it casts reflection on Corporation and its officials and is against social and public interest. In case transfer cannot be effected by public auction and it is necessary to resort to sale by tender it is both fair and necessary to inform the unit holder, if unit has been got valued for purposes of transfer of the estimated value for sale as he is as much interested as the Corporation. In case transfer cannot be effected by public auction and it is necessary to resort to sale by tender it is both fair and necessary to inform the unit holder, if unit has been got valued for purposes of transfer of the estimated value for sale as he is as much interested as the Corporation. Sale of public property by calling tenders escape attention of many an intending participants, Every endeavour should, therefore, be made to give wide publicity and to get the maximum price. Bureaucracy feels that accountability is an impediment to efficient discharge of the duty. Accountability is no more and no less than, the concept of accountability of a private concern to their shareholders. There is a distinction between prying into details of day to day administration and of the legitimate actions or resultant consequences thereof. To enthuse efficiency into administration, a balance between accountability an autonomy of action of management in public enterprises should be carefully maintained. Over emphasis on either would impinge upon public efficiency. But undermining the accountability would give immunity or carte blanche power to deal with the public property or of the debtor at whim or vagary. Whether the public authority acted bonafide and in the best interest as prudent owner in the given facts would do, be gazed from impugned action and attending circumstances. The authority should justify the action assailed on the touchstone of justness, fairness, reasonableness and as a reasonable prudent owner. 20. After having held as aforementioned, the Court laid down certain guidelines to be followed by a Financial Corporation, while acting in exercise of the powers under section 29 of the Act. The guidelines do provide that if the unit holder is willing to offer the sale pricef he should be offered the same facility and the unit should be transferred to him and the arrears remaining thereafter should be rescheduled to be recovered in instalments with interest or if he present third party with higher offer, it should be tested and may be accepted, in U. P. Financial Corporations case (supra), the Court laid emphasis on trie obligation to act fairly on the part of the Financial Corporation. 21. In an earlier decision in Mis. 21. In an earlier decision in Mis. Swastic Automobiles and others v. Bihar State Financial Corporation and others9 AIR 1989 SC 1551, certain directions were issued by the apex court, after having heard the learned Counsel for the judgment-debtor and the Bihar State Financial Corporation, after it had come to the conclusion that the security, which was valued at over Rs 20 lacs had been sold for a very small amount. 22 In the instant case, as noticed by us above, no notice was ever issued to the petitioner informing him of the date of intended auction. He was also not present on the date of auction and as is apparent from the record, a false stand has been taken by respondent-Corporation that he was present on the date of auction or that he signed the bid papers. Mr Ashok Kumar Jain has flatly denied having signed such document, when the same were shown to him in Court No intimation was thereafter given to the petitioner of the date of negotiation Intimation which was given, admittedly was not proper and a wrong date was mentioned therein on which it was impossible to have presented for negotiations. In these circumstances, there is no other possible view except to hold that the respondent-Corporation has not acted fairly as a trustee in the matter of putting the petitioners unit for auction. 23. In view of our findings aforementioned that the sale was not conducted as per the guidelines laid down in Mahesh Chandras case (supra) and the respondent-Corporation did not act diligently and as a prudent owner, we have no other option left except to quash and set aside the auction proceedings as also the sale in favour of respondent No 3. 24. The respondents stand in its reply was noticed that till 17th December, 1986, only a sum of Rs 32,000 had been paid by the petitioner against the petitioners stand that till lvth December 1986 be had paid a sum of Rs 98,230 and thereafter till August 1^88 a total sum of Rs. 1,53,230 had been paid. During the pendency of the writ petition, we had called upon respondent No. 2 to file further affidavits stating therein the total amount becoming due and payable by the petitioner and in his affidavit dated 29th March, 1993, Mr. 1,53,230 had been paid. During the pendency of the writ petition, we had called upon respondent No. 2 to file further affidavits stating therein the total amount becoming due and payable by the petitioner and in his affidavit dated 29th March, 1993, Mr. T. C Shandil, Manager tAccounts) of the respondent-Corporation stated that a sum of Ks 1,94,402 10 in all had been received from the petitioner, out of which a sum of Rs. 1,19,500 was deposited by the petitioner, out of his own resources and the balance amount of Rs 74,907.10 was got adjusted by the petitioner from subsidy. Thus the earlier stand taken by the respondent-Corporation in its reply that only a sum of Rs. 32,000 had been received from the petitioner was not the correct stand After the affidavit of Mr. T. C. Shandil, another affidavit dated 15th September, 1993 of Mr. S. K. Gupta, General Manager of the respondent-Corporation was filed in compliance to the directions of the Court, since the Court had directed the petitioner to deposit further amount with the respondent-Corporation and the respondent-Corporation was called upon to work out the amount under its lump-sum policy. 25. In the latest affidavit, the total outstanding balance with interest upto 31st July, 1993, without adjustment of the sale proceeds is shown as Rs. 5,04,468 00 and after allowing concession the total amount is shown as Rs 4,45,032 00 The outstanding balance with interest after adjustment of sale proceeds of Rs. 1,62,000 is shown as Rs. 3,02,794.00 and after allowing concessions it is shown that balance payable on 31st July, 1993, is Rs 2,51,251.00. Needless to add that the petitioner has already deposited a sum of Rs 50,000 in the Registry of this Court in pursuance to the Courts directions dated 14th April, 1992, and another amount of Rs. 2,33,000 as per order dated 13th July, 1993 There is still dispute amongst the petitioner and the respondent-Corporation about the exact liability of the petitioner towards the respondent. 26. As a consequence of the above discussion, the writ petition is allowed. The respondent-Corporation is directed to handover the possession of the unit to the petitioner within a period of two weeks from today. The respondent-Corporation is permitted to withdriw the amount deposited by the petitioner in the Registry of this Court and adjust the same in the loan account of the petitioner. The respondent-Corporation is directed to handover the possession of the unit to the petitioner within a period of two weeks from today. The respondent-Corporation is permitted to withdriw the amount deposited by the petitioner in the Registry of this Court and adjust the same in the loan account of the petitioner. The Corporation will now work out the exact amount becoming due and payable by the petitioner, after allowing the requisite concessions as are available on the basis of lump sum payment, and after adjusting the amounts received/deposited, including Rs. 50,( 00 and Rs. 2,3j,O0O deposited in this Court till the date of each deposit, which will be done only after affording to the petitioner an opportunity of being heard, giving him reasonable time to pay the balance amount, if any, outstanding. The amount paid by respondent No 3 as bid money shall be refunded to him by the respondent-Corporation alongwith simple interest from the date of deposit, at the rate of 18% per annum till the date of refund. We may also clarify that the respondent-Corporation shall not be entitled to charge this interest from the petitioner. The respondent-Corporation is saddled with the petitioners costs quantified at Rs. 1,000, Writ petition allowed.