Judgement The petitioner No.1 M/s Dutta Barua and Company is a partnership firm. The petitioner No.2 is the Managing Director and Sree Guru Press is a unit thereof. In order to modernize and upgrade the Press, the petitioner approached the Assam Financial Corporation for financial assistance. Against a sum of Rs.11.75 lakhs sanctioned, the petitioners were paid Rs.9,37,151.41 only. Because of delay in the disbursement and inadequacy thereof, the petitioner could not purchase all the machineries required for upgrading the press. The entire project, therefore, remained a non-starter. Even then, the petitioners repaid Rs.6,91,113.32. Out of which Rs.7,21,936.80 was adjusted against interest and Rs.2,39,171.52 against principal. In the month of June, 1999, the AFC served a copy of the notice under S. 29 of the Act of 1951 for taking over the management reserving right to transfer the mortgaged property by way of sale or lease. 2. The petitioner challenged the aforesaid notice in W. P. (C) No. 3180 of 1999. The Court while issuing Rule by the order dated 28-6-1999 directed the petitioner to pay 50 per cent of the outstanding amount. The amount could not be paid because of death of Munindra Narayan Dutta, the then Managing Director of the Firm. Eventually, the Corporation took over the possession of the premises on 9-2-2000 and published notice of sale by public auction in the local daily Agradoot, in its edition dated 27th April 2000, inviting quotations. The petitioners were not allowed to participate in the sale process and have been kept at dark about the tenders received. However, the petitioners came to know from reliable sources that negotiation was going on privately with Dr. Biraj Saikia for sale of the mortgaged property. Eventually, the petitioners were informed that the Rs.57 lakhs was received as the highest offer as consideration for 14 kathas of mortgaged land allowing the petitioners to redeem the property on payment of Rs.57 lakhs within 10 days. The Corporation decided to proceed with the sale instead of trying to make the Unit viable and working. the respondents contrary to all norms of fair play decided to sell the entire property at Rs.57 lakhs without giving wide publicity. The notice was published only in one edition of a vernacular daily. The proposed sale of the assets of the petitioners at a throwaway price of Rs.57 lakhs settled through private negotiation is in challenge in this petition. 3. The notice was published only in one edition of a vernacular daily. The proposed sale of the assets of the petitioners at a throwaway price of Rs.57 lakhs settled through private negotiation is in challenge in this petition. 3. An affidavit-in-opposition by the respondents has been filed controverting the contentions of the petitioner Firm. According to the respondents, notices were issued repeatedly calling upon the petitioner Firm to liquidate the entire amount, particularly in terms of the order dated 28-6-1999 passed in W. P. (C) No. 3180/99. The petitioner firm issued a post dated cheque of Rs.1 lakh only which was eventually dishonoured by the Bank. The corporation invoked the powers under S. 29 of the Act of 1951 as a last resort and published the said notice in a widely circulated Assamsese daily. The publication was restricted to only one newspaper due to financial constraints. The process of sale though made known to the petitioners, they took no steps to produce any better purchaser. Eventually, the deal was stuck at Rs.57 lakhs with Dr. Saikia and a sum of Rs. 9 lakhs has been accepted as advance. 4. Heard Mr. A. M. Mazumdar, learned Senior Counsel for the petitioners assisted by Mr. M. Nath, learned counsel and Mr. A. Sarma, learned counsel for the Assam Financial Corporation assisted by Mrs. T. Goswami, learned counsel. 5. It would appear from the pleadings reproduced above that the Corporation has taken over possession of the mortgaged premises assigned to it by the petitioners invoking the powers under S. 29 of the State Financial Corporation Act and published a sale notice in a vernacular newspaper, namely "Agradoot". The powers of the corporation to take over possession and to realize the outstanding amount by sale of the mortgaged property is undisputed. In Haryana Financial Corporation v. Jagdamba Oil Mills (2002) 3 SCC 496 : ( AIR 2002 SC 834 ) the Supreme Court interpreted the provisions of law and the powers of the Corporation under S. 29 holding inter-alia that judicial review is permissible where there is violation of statutory provisions on the part of the corporation or where State Financial corporation acts unfairly. The High Court exercising its jurisdiction under Article 226 does not act as an appellate authority and shall not interfere with the action under S. 29 of the Act unless the aforesaid two situations exist. The High Court exercising its jurisdiction under Article 226 does not act as an appellate authority and shall not interfere with the action under S. 29 of the Act unless the aforesaid two situations exist. The Supreme Court further observed that the guidelines prescribed in Mahesh Chandra v. Regional Manager, U.P. Financial Corporation, (1993)2 SCC 279 : ( AIR 1993 SC 935 ), if strictly followed, would amount to giving premium to a dishonest borrower. 6. In the instant case, there appears to be no infringement of the statutory provisions. The Corporation has unshackled powers to realize the outstanding loan amount by selling mortgaged property through public auction. Therefore, the decision in Mahesh Chandra (supra) that every endeavour should be made to make the unit viable and vibrating is not the mandate of law as on today. The submission advanced in this behalf by Mr. Mazumdar, learned Senior Counsel is of no significance. In this context, it can be said that private negotiation for sale of the mortgaged property would be permissible only when the Corporation fails to secure the best price through public auction. Therefore, the first option before the Corporation was to realize the outstanding loan by sale through public auction only. The manner and method of public auction should be in consonance with the observation of the Honble Supreme Court as recorded in paragraph 14 of the Judgment in Haryana Financial Corporation ( AIR 2002 SC 834 ) (supra). The observation recorded therein is quoted below :- "14. As was observed in Chairman and Managing Director, SIPCOT v. Contromix (P) Ltd. ( AIR 1995 SC 1632 ) in the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold. This can be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer. Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. But many times it may not be possible to secure the best price by public auction when the bidders join together so as to depress the bid or the nature of the property to be sold is such that suitable bid may not be received at a public auction. But many times it may not be possible to secure the best price by public auction when the bidders join together so as to depress the bid or the nature of the property to be sold is such that suitable bid may not be received at a public auction. In that event, any other suitable mode for selling of property can be inviting tenders. In order to ensure that such sale by calling tenders does not escape attention of an intending participant, it is essential that every endevour should be made to give wide publicity so as to get the maximum price. These are aspects which the corporation have to keep in view while dealing with disposal of seized units." 7. The aforesaid decision requires the Corporation to give wide publicity of the public auction to ensure maximum public participation in the process of sale. This has to be meticulously followed to ensure fair play while enforcing Corporations right to realize the amount in default. In paragraph-10 of the said judgment, the Supreme Court held that the obligation to act fairly on the part of the administrative authority was evolved to ensure the rule of law and to prevent failure of justice. This doctrine being complementary to the principles of natural justice is bound to be observed by the quasi-judicial authority. Therefore, there cannot be any reservation that the public auction should precede wide publicity to ensure participation of maximum number of buyers. 8. The petitioners are aggrieved primarily because the Corporation published the notice of sale only in one Assamese Vernacular which according to them was not enough to secure public attention and maximum participation in the sale process. The Corporation in his affidavit submitted that the notice was published only in one edition of a vernacular daily, namely "Agradoot" due to constraint of funds. This plea, in the opinion of this Court, is inconsistent with the principles of fair play and natural justice. The Financial Corporation cannot be permitted to avoid wide publicity on the plea of financial constraints. The plea of financial constraints also sounds strange as the amount involved in the publicity is meagre and insignificant. Publication of the sale notice only in one daily cannot be accepted as enough to secure the best price for the property involved. Thus, the petitioners valuable right of fair treatment stood infringed by the half-hearted approach of the Corporation. The plea of financial constraints also sounds strange as the amount involved in the publicity is meagre and insignificant. Publication of the sale notice only in one daily cannot be accepted as enough to secure the best price for the property involved. Thus, the petitioners valuable right of fair treatment stood infringed by the half-hearted approach of the Corporation. 9. The petitioners also secured an offer from the Life Insurance Corporation of India for purchase of a part of the mortgaged property and insisted for a No-Objection Certificate from the Corporation which was denied for no discernible reason. The Corporations right to realize the amount due extends to and ends in sale of the mortgaged property. This does not mean that such right can be exercised in an arbitrary manner. Discretion to sell the property in all situations will have to be exercised within the bounds of legal dicta. 10. It would appear that the decision to sell the property at a price of Rs.57 lakhs to Dr. Saikia has been taken by the Corporation after negotiation. Dr. Saikia was a bidder in the auction process and raised his bid to Rs.57 lakhs for 14 Kathas of land. The Corporation has not disclosed the number of purchasers who had submitted quotations in response to the public notice. Even the bid amount offered by Dr. Saikia was also not up to the satisfaction of the Corporation for which they had resorted to negotiation with him. All these are indicative of failure on the part of the Corporation to be fair in their bid to dispose of the mortgaged property. The legitimate expectation of the petitioners to get maximum price for the property stood jeopardized. Therefore, the impugned action warrants interference with a view to compel the Corporation to act in compliance with the observation of the Honble Supreme Court in paragraph 14 of the judgment in Haryana Financial Corporation ( AIR 2002 SC 834 ) (supra). Latches/default on the part of the petitioners in liquidating the debt do not vest any right with the Corporation to tread a way not approved by law. The sale process initiated by the Corporation ex-facie suffers from the vice of inadequate publicity. 11. The learned Counsel for the Corporation referred to a number of decisions of the Honble Supreme Court most of which have been referred to in Haryana Financial Corporation (supra). The sale process initiated by the Corporation ex-facie suffers from the vice of inadequate publicity. 11. The learned Counsel for the Corporation referred to a number of decisions of the Honble Supreme Court most of which have been referred to in Haryana Financial Corporation (supra). The decisions in Jagan Singh v. State Transport Appellate Tribunal, AIR 1980 Raj.1 (FB), Mathunni Mathai v. Hindustan Organic Chemicals Ltd. and others (1995)4 SCC 26 : ( AIR 1995 SC 1572 ) and U. P. Financial Corporation v. Gem Cap (India) Pvt. Ltd. and another (1993)2 SCC 299 : ( AIR 1993 SC 1435 ) cannot retrive the situation as above. Therefore, the decisions cited are not discussed in details. I have also considered the ratio available in Sangram Singh v. Election Tribunal, Kotah and another AIR 1955 SC 425 , A. M. Allison v. B. L. Sen AIR 1957 SC 227 and Municipal Corporation of the City of Jabalpur v. State of Madhya Pradesh AIR 1966 SC 837 . The ratios available therein have no role to play in the instant case which is marred by the infringement of the doctrine of fair play ushering failure of justice. 12. It was argued by Mr. Sarma, learned senior counsel that the petitioners are not entitled to any relief as they failed to implead Dr. Saikia as respondent in this writ petition. With regard to Dr. Saikias status in the matter, as already discussed hereinbefore, he was a participant in the public auction, but his bid was not reasonable and, therefore, it was not accepted by the Corporation. Thereafter, the Corporation negotiated the matter with Dr. Saikia who in turn raised his offer to Rs.57 lakhs. It rather became more or less a settlement by private negotiation between the Corporation and the intending purchaser. The negotiation arrived at was communicated to the petitioners by the letter dated 26-6-2002 (Annexure-5) which has been challenged in this writ petition. By this letter, the Corporation informed the petitioners that sale of 14 kathas of land has been settled at Rs.57 lakhs with the highest bidder. The negotiation undertaken by the Corporation has not been spelt out in this letter. It is obviously not a case of outright sale of property to the highest bidder. The petitioners were in no way involved with the private negotiation and on the other hand, presence of Dr. The negotiation undertaken by the Corporation has not been spelt out in this letter. It is obviously not a case of outright sale of property to the highest bidder. The petitioners were in no way involved with the private negotiation and on the other hand, presence of Dr. Saikia will not in any manner change the feature of the case. Situated thus, this Court is of the opinion that the petitioners who have reasons to be aggrieved cannot be deprived of protection under the law for not arraying Dr. Saikia as a respondent. 13. In the result, the writ petition is allowed. The sale process initiated by the Corporation and the action taken are hereby set aside. The Corporation is directed to initiate the process of sale by public auction de-novo immediately with due publicity of the proposed sale by publishing notice atleast in three local dailies, two thereof being English and one verancular. After completion of the auction, if the Corporation is not satisfied with the highest price offered, they may go for sale by private negotiation. In the process of private negotiation, any offer made by the Life Insurance Corporation of India or any other intending buyer, at the instance of the writ petitioners, should be given proper consideration. No costs. Petition allowed.