D. M. PATNAIK, J. ( 1 ) THE petitioner-Bank challenges the action of the Orissa State Financial Corporation for auction sale of the assets of M/s. Utkal Ferro Alloys Pvt. Limited (for short, the 'company') to opposite party no. 5, ( 2 ) THE Orissa State Financial Corporation (for short, the 'o. S. F. C. ') sanctioned a loan of rupees 11 lakhs and 8 thousand, the Industrial Promotion and Investment Corporation (in short, the 'l. P. C. O. L. ') sanctioned a loan of rupees 3 lakhs and the petitioner-Bank sanctioned credit limit upto rupees 92 lakhs to the opposite party-Company for setting up its factory at rairangpur in the district of Mayurbhanj against valuable securities both movables and immovables. By a common agreement dated 11. 7. 1979 it was agreed by all the above parties that the properties so mortgaged to o. S. F. C. shall be first charge and for the loan advanced by the petitioner-Bank it shall be the second charge, to be enforced by the petitioner-Bank. ( 3 ) WHEN the company defaulted in repay ing the loan the latter seized the unit on 5,9. 87 and sale notice was published on 11. 9. 87. This time the sale to one Arun Kumar could not be materialised and was cancelled and the second sale notice was published on 7. 3. 95 in the economic Times and this time opposite party no. 6 offered rupees 27 lakhs with a down payment of rupees five lakhs and rest amount for payment within seven years. This was accepted by the O. S. F. C. The petitioner's case is. such valuable assets have been sold away for a meagre sum of rupees 27 lakhs for which the petitioner-bank is at great loss. It is alleged that such a low offer has come because of the utter inaction of the o. S. F. C. in not giving wide publicity for sale to attract potential businessmen to purchase a highly sophisticated and technologically advanced unit. It is also alleged that although under the agreement dated 11. 7. 1979 the petitioner Bank was entitled to a prior notice for sale. Had it been done, it could have fetched a buyer of its choice. The sale is claimed to be invalid in the absence of such a notice as provided under the agreement. It, therefore, prays to set aside the same. 7. 1979 the petitioner Bank was entitled to a prior notice for sale. Had it been done, it could have fetched a buyer of its choice. The sale is claimed to be invalid in the absence of such a notice as provided under the agreement. It, therefore, prays to set aside the same. ( 4 ) THE main point urged in the counter-affidavit by opposite party No. 1, the O. S. F. C. is that, so far as the agreement dated 11. 7. 79 is concerned the same was not registered with the Registrar of the Companies as provided under Section 125 of the Companies Act and, therefore, the agreement being void is nonexistent in the eye of law and therefore, a prior notice to the petitioner-Bank was not necessary. Further it asserted that the sale notice dated 11. 9. 87 was intimated to the regional Director, Company Law Board under annexure-A and Annexure-B. It is its further case that the first sale in favour of Shri arun Kumar Nanda was cancelled since the buyer only purchased the assets of the company whereas, it could not discharge the liabilities of the company for which the creditors of the company moved the corporation to cancel the sale which was done. However, on the second occasion on 14. 3. 1995 before the sale the Disposal-cum-Advisory Committee of the Corporation held its meeting on 14. 3,1995 in which the officers of the Bank were present. On their asking ten day's time was granted to them to fetch the buyer but they failed to do so, and therefore, the Corporation was constrained to put the unit to auction which has been settled with the opposite party No. 6 with the terms and conditions stated above. The opposite party No. 5, the company has supported the case of the petitioner-Bank whereas, opposite party No. 6 has supported the case of the OSFC. ( 5 ) HAVING heard the learned counsel for the petitioner and the opposite parties 5 and 6, we are satisfied that the unit has been sold for a low price and the procedure adopted by the OSFC did not comply with the guidelines laid down by the apex Court in the case of mahes Chandra v. V. P. State Financial corporation. It has been laid down in the above case that the defaulting unit should be sold by public auction, but the valuation of the unit for the purpose of determining adequacy of offer should always be intimated to the unit holder to enable him to file objection if any, he being a vitally interested party in getting the maximum price. If the unit holder is willing to offer the sale price as any other tender, then he should be offered the same facility and the unit should be transferred to him. and if necessary, arrears remaining thereafter should be rescheduled to be recovered in instalments and if he brings 3rd party with higher offer the same may be tested and accepted. It is also laid down that sale by private negotiation should be permitted if the unit is a very large concern with huge amount of investment for which, ordinary buyers may not be available. These conditions having not been adhered to. the sale is liable to be set aside. ( 6 ) IN the result, the petition is allowed and the sale is set aside. The OSFC shall advertise the unit for fresh sale giving wide publicity as required in the case of Mahes Chandra (supra) and also comply with other requirements in that case. Besides, we direct that minimum 15 days notice should be given to the petitioner-Bank as well as opposite party no. 5, the Company to enable it to join the auction and if necessary to allow them to fetch their own buyers for participation in the auction. Opportunity to inspect the unit be also given to the petitioner-Bank and opposite party no. 5. No costs. Susanta Chatterji, J.-I agree. Petition allowed.