Judgment Rakesh Kumar Garg, J. 1. The petitioner has filed the present writ petition for issuance of a writ in the nature of mandamus directing the respondents not to confirm the auction/sale dated 24.2.2006 qua the residential house of the petitioner and further that the respondents be directed not to take over the possession of the residential house of the petitioner forcibly and illegally; and further for the issuance of a writ in the nature of mandamus directing the respondents to consider the case of the petitioner in view of the scheme for compromise settlement of the accounts. 2. M/s Deep Industries Bahadurgarh, District Jhajjar availed loan from the respondents-HFC and executed hypothecation deed dated 12.11.1993, 6.4.1995 and 3.7.1995 to secure repayment of financial assistance of Rs. 6.10 lacs, 2.20 lacs and 2.35 lacs as per the terms and conditions of the said loan agreement. The petitioner stood guarantor for the repayment of the said loan with interest and miscellaneous expenses and executed bonds of guarantee. The respondents-Corporation disbursed an amount of Rs. 6.04 lacs, 2.20 lacs and 2.35 lacs in the above said three accounts. The currency of all the loan accounts expired in the year 2000. The borrower failed to repay the amount forcing the Corporation to take over the possession of the primary as well as one of the collateral securities so as to sell the same to recover the amount. The primary security as well as the collateral security was disposed of and the respondents-Corporation received the amount of Rs. 4.30 lacs and Rs. 6.40 lacs on this account. Since the sale proceeds recovered from the sale of primary and collateral securities were not sufficient to adjust the outstanding loan, the corporation proceeded to take over and auction the residential house mortgaged by the petitioner. 3. It is the case of the petitioner that the respondents-Corporation has acted in an illegal manner and without adopting the due procedure as stipulated under the provisions of the State Financial Corporations Act and is now trying to take over the physical possession of the only residential house of the petitioner. It is also alleged by the petitioner that the respondents-Corporation have auctioned the said house in an open auction on 24.2.2006 and the said auction has been conducted in violation of the principles of natural justice. It is also alleged by the petitioner that the respondents-Corporation have auctioned the said house in an open auction on 24.2.2006 and the said auction has been conducted in violation of the principles of natural justice. The petitioner has also averred that he is ready and willing to make the payment and settle the loan arrears in terms of the policy (Annexure P-1) of the respondents. 4. The respondents-Corporation contested the claim of the petitioner and taken the stand in the written statement that the sale of the disputed house has already been confirmed on 6.9.2006 for a sum of Rs. 6.30 lacs and the auction purchaser has deposited the entire sale consideration and even after the adjustment of above sale proceeds, the Corporation has still to recover approximately an amount of Rs. 49.85 lacs with interest. 5. Sh. Sudhir Kumar-respondent No. 3 has also contested the writ petition by filing separate written statement taking similar stand as of respondents-Corporation. Respondent No. 3 has also taken the plea of bonafide purchaser. 6. We have heard learned Counsel for the parties and perused the record. 7. It is pertinent to mention here that when the case came up for motion hearing on 7.9.2006, the following order was passed by this Court: Counsel for the petitioner states that the petitioner is ready to settle the accounts with the respondent-Corporation, as per policy Annexure P-1, which is still open and applicable till September 20, 2006. Counsel farther states that the petitioner has only one house and the same has been auctioned. Notice of motion for September 11, 2006, Dasti only. Till then, dispossession of the petitioner from the house in question shall remain stayed. Copy of the order be given Dasti on payment of usual charges. 8. In response to issuance of notice of motion, the respondents-Corporation appeared and on 8.1.2007, it was stated by the learned Counsel for the respondents-Corporation that the case of the petitioner is under active consideration of the respondents. Thereafter, the case was adjourned from time to time. An affidavit dated 25.1.2008 was filed by Shri Ashok Pahwa, Deputy General Manager, Haryana Financial Corporation, Chandigarh in which it has been stated that the settlement of the loan account of the borrower was approved and conveyed vide letter dated 18.1.2007 and the settlement was approved at Rs. 5,10,378/- (in T.C.) Rs. 1,47,041/- in G.Set A/c and Rs. An affidavit dated 25.1.2008 was filed by Shri Ashok Pahwa, Deputy General Manager, Haryana Financial Corporation, Chandigarh in which it has been stated that the settlement of the loan account of the borrower was approved and conveyed vide letter dated 18.1.2007 and the settlement was approved at Rs. 5,10,378/- (in T.C.) Rs. 1,47,041/- in G.Set A/c and Rs. 2,34,473/- in WCTL A/c. However, the petitioner has not honoured the said settlement and is in default of Rs. 3,68,892/- as per the said settlement. In view of this affidavit, it has also mentioned that the auction of the house in dispute was held at site and the petitioner himself is residing in the said house. 9. The main grouse of the petitioner in this case is that the respondents have acted in an illegal manner by selling his house at a throwaway price without fixing the reserve price. It is also the stand of the petitioner that the sale of the house has been conducted in an illegal manner in as much as no proper publication of the auction sale was done as per the procedure. The sale was not conducted at site, in fact it was conducted in Branch Office of the respondents-Corporation. Therefore, the sale proceedings of the house of the petitioner is liable to be quashed. 10. At the time of hearing, the record of the respondents - Corporation was perused. The respondents-Corporation has failed to produce the publication of the auction notice in two daily newspapers having circulation in the area as stipulated in the procedure. A perusal of the auction notice attached with the writ petition shows that the said notice was published in some newspaper with the name of "Dainik Sandhya" which is not even a local daily newspaper. The respondents-Corporation has also failed to show from the original record what terms and conditions were settled by the Corporation for holding the sale of the property of the petitioner. Even it has not been shown by the respondents-Corporation that any amount of earnest money was fixed by the respondents-corporation. Even the perusal of the bid sheet of the auction sale shows that only two bidders were present at the time of bid and the bids given by the other bidder Krishan Kumar has not been signed by him. There is no record with the Corporation of accepting the earnest money of Rs. Even the perusal of the bid sheet of the auction sale shows that only two bidders were present at the time of bid and the bids given by the other bidder Krishan Kumar has not been signed by him. There is no record with the Corporation of accepting the earnest money of Rs. 10,000/- from the alleged bidders. It is also not clear from the record whether after the completion of the auction any refund of the earnest money was made to the other bidder namely Sh. Krishan Kumar. 11. There is one more serious irregularity as sale was not conducted at site. Even in the auction notice in the "heading column" ft is mentioned that the auction sale will take place at 11 A.M. at Branch Office whereas against the property of the petitioner it is stated that the auction sale will take place at site at 10 A.M. It is also strange to see that auction, which is stated to have been held at a site in a residential area in which the petitioner himself is admittedly residing has taken place with having only two bidders i.e. respondent No. 3 (auction purchaser) and the other bidder namely Krishan Kumar. Even the respondents-Corporation has no other concrete document or evidence about the existence of the said bidders. 12. It is also relevant to mention here that on 7.11.2005, the value of the house in dispute was assessed at Rs. 5.75 lacs whereas the reserved price of the property in dispute at the time of auction was kept at Rs. 4.75 lacs for which no explanation is forthcoming. No satisfactory explanation is forthcoming from the authorities to explain these deviations from the norms. It is common knowledge that property prices are rising everyday whereas in the present case the reserve price has been fixed lower than the valuation done on 7.11.2005. No effort has been made to assess the value of property afresh before fixing the reserve price. Sale was conducted without properly and legally fixing the reserve price. 13. Thus, from the above stated facts, it is crystal clear that the impugned auction has not taken place in accordance with law and a fraud has been committed upon the petitioner by the officers of the respondents-Corporation. No record of publication of the auction notice was produced by the respondents-Corporation. 13. Thus, from the above stated facts, it is crystal clear that the impugned auction has not taken place in accordance with law and a fraud has been committed upon the petitioner by the officers of the respondents-Corporation. No record of publication of the auction notice was produced by the respondents-Corporation. There is no record of publishing the auction notice in two daily newspapers having circulation in the area. As noticed earlier, there are no terms and conditions on the record of the Corporation which were fixed for holding the auction sale of the property of the petitioner. Even the respondents-Corporation could not produce any record to show that the earnest money of two bidders who participated in the auction was received nor this amount was shown deposited in the accounts of the respondents-Corporation. There is also no documentary evidence in the record of the respondents-Corporation to show the refund of alleged earnest money of Rs. 10,000/- to the unsuccessful bidder Krishan Kumar. Even the alleged bid sheet of the auction sale produced before this Court does not bear the signatures of unsuccessful bidder Krishan Kumar. Even no explanation has been given for fixing the reserved price at a lower rate of Rs. 4.75 lacs whereas even as per the record of the respondents-Corporation, the value of the property of the petitioner was assessed at Rs. 5.75 lacs on 7.11.2005. There is wide disparity between the value assessed and reserve price fixed for the property; therefore, a substantial injury has been caused to the petitioner due to fraud committed by the respondents. In these circumstances, it seems that the alleged auction sale has not taken place and a concocted story has been put forth by the respondents-Corporation to show that the sale was held as per law. 14. It is axiomatic that the statutory powers vested in State Financial Corporation under the State Financial Corporations Act, must be exercised bona fide. The presumption that public officials will discharge their duties honestly and in accordance with the law may be rebutted by establishing circumstances which reasonably probabilise the abuse of that power. In such event it is for the officer concerned to explain the circumstances which are set up against him. If there is no credible explanation forthcoming the court can assume that the impugned action was improper. In such event it is for the officer concerned to explain the circumstances which are set up against him. If there is no credible explanation forthcoming the court can assume that the impugned action was improper. It is well settled that in the matter of sale under Section 29, State Financial Corporations must act in accordance with the statute. They are not to act unfairly and unreasonably, if they do so, their action can be called into question under Article 226. Reasonableness is to be tested against the dominant consideration to secure the best price for the property to be sold. The respondents-Corporation has sold the property in dispute without fixing any terms and conditions and without giving due publicity to the auction sale. Even there is no record of money received from the bidders and refund thereof to the unsuccessful bidders. Even the reserve price had been fixed at a lower rate than the value of the property assessed by the respondent-Bank itself. Thus, no satisfactory explanation is forthcoming from the Authorities to explain these deviations from the norm. The concatenation of inexplicable and unexplained circumstances is sufficient for us to hold that the sale was illegal, unfair and arbitrary and consequently invalid. Our view finds support from the judgment of the Honble Supreme Court in S.J.S. Business Enterprises (P) Ltd. v. State of Bihar and Ors. Hence, the impugned sale of the property of the petitioner in question is liable to be set aside. In view of the above, the writ petition is allowed and the auction sale held on 29.9.2005 and the subsequent proceedings of confirmation of sale are hereby quashed. However, the respondents-Corporation shall be at liberty to proceed in accordance with law to recover its debt from the borrower.