ORDER
O.P. Jain, J.
1. Petitioner Ram Bha-rosey Lal who is a retired Officer of Indian Army took a loan of Rs. 75611 -40 P. from the respondent Corporation for setting up a Dairy industry. For some reasons the venture was not successful and the petitioner was unable to repay the instalments to U.P. Financial Corporation (hereinafter called the Corporation), After some correspondence between the petitioner and the Corporation a notice Annexure '7' under S. 29 of State Financial Corporation Act was served on the petitioner. When the loan was not repaid in spite of notice, the Corporation published an advertisement, in a daily newspaper 'Amar Ujala' dated 14-9-1997. By this advertisement intending purchasers were invited to give their offers for the purchase of the property mentioned in the advertisement. It may be mentioned that the property was mortgaged by the petitioner with the Corporation at the time when the loan was sanctioned. The property belonging to the petitioner was sold by the Corporation to respondent No. 3 M/s. Shakti Agency for a sum of Rs. 1,10,000/-.
2. The present writ petition has been filed with a prayer that the sale deed dated 26-2-1988 executed by the Corporation in favourof respondent No. 3 may be called from the office of the Sub-Registrar, Badaun and may be quashed. The petitioner has also prayed that notice Annexure '7' dated 20-10-1987 may also be quashed and respondents may be directed not to interfere with the possession of the petitioner.
3. The grounds on which the sale proceedings have been challenged are that no public auction was held, that no valuation was got done, that no effort was made by the Corporation to make the Dairy Unit of the petitioner viable and that no information was given to the petitioner that the highest bid of Rs. 1,10,000/- is going to be accepted and in this way the petitioner was deprived of an opportunity to produce some persons who may have given a higher bid.
4. The Corporation has filed a counter affidavit and purchaser Sanjay Kumar has been ordered to be impleaded as respondent No. 5 vide order dated 18-7-1995.
5. We have heard learned counsel for the parties and have gone through the record.
6. The first contention on behalf of the petitioner is that no information was given to him after issue of notice Annexure'7'. This allegation has been controverted in Para 20 of the counter affidavit wherein it is stated that after the publication of the advertisement in the newspaper the Corporation again issued registered letter dated 21-11-1987 and that the officials of the Corporation personally contacted the petitioner on 16-10-1987 but the petitioner was neither interested in running the unit nor he was inclined to pay anything. In the rejoinder affidavit the petitioner has denied having received letter dated 21-11-1987. It is however, admitted that notice under S. 29 of State Financial Corporation Act was received by the petitioner.
7. The learned counsel for the petitioner has argued that it was incumbent on the Corporation to have disposed of the property by public auction. It is also argued that the guidelines given in the case of Mahesh Chandra v. Regional Manager, U.P. Financial Corporation, (1993) 2 SCC 279 : AIR1993 SC 935, have not been followed. These guidelines are as under:
1) 'Sale of a unit should always be made by public auction.
2) Valuation of a unit for purpose of determining adequacy of offer or for determining if bid offered was adequate, should always be intimated to the unit holder to enable him to file objection if any as he is vitally interested in getting the maximum price.
3) If tenders are invited then the highest price on which tender is to be accepted must be intimated to the unit holder.
4)a) If unit holder is willing to offer the sale price, as the tenderer, then he should be offered same facility and unit, should be transferred to him. And the arrears remaining thereafter should be rescheduled to be recovered in instalments with interest after the payment of last instalment fixed under the agreement entered into as a result of tenderedamount.
b) If he brings third parties with higher offer it would be tested and may be accepted.
5) Sale by private negotiation should be permitted only in very large concerns where investment runs in very huge amount for which ordinary buyer may not be available or the industry itself may be of such nature that by normal buyers may not be available. But before taking such steps there should be advertisements not only in daily newspapers but business magazines and papers.
6) Request of the unit holder to release any part of the property on which the concern is not standing of which he is the owner should normally be granted on condition that sale proceeds shall be deposited in loan account.'
8. Before we proceed to examine whether the above guidelines have been followed in the instant case, we must take notice of some later decisions of the Apex Court which have been relied upon by the learned counsel for the respondent.
9. In AIR 1993 SC 1435, U.P. Financial Corporation v. Gem Cap India Pvt. Ltd., the following observations were made in para 10:
'It is true that the appellate Corporation is an instrumentality of the State created under the State Financial Corporations Act, 1951. The said Act was made by the Parliament with a view to promote industrialisation of the States by encouraging small and medium industries by giving financial assistance in the shape of loans and advances, repayable within a period not exceeding 20' years from the date of loan. We agree that the Corporation is not like an ordinary money-lender or a Bank which lends money. It is a lender with a purpose -- the purpose being promoting the small and medium industries. At the same time, it is necessary to keep certain basic facts in view. The relationship between the Corporation and the borrower is that of creditor and debtor. The corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. The Corporation no doubt has to act within the four corners of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the Corporation to review and resurrect every sick industry irrespective of the cost involved. Promoting industrialisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled hand and foot in the name of fairness. Fairness is not a one way street, more particularly in matters like the present one. The above narration of facts, shows that the respondents have no intention of repaying any part of the debt. They are merely putting forward one or other ploy to keep the Corporation at bay/Approaching the Courts through successive writ petitions is but a part of this game. Another circumstance. These Corporations, are not sitting on King Solo-mon's mines. They too borrow monies from Government or other financial corporations. They too have to pay interest thereon. The fairness required of it must be tempered nay,determined, in the light of all these circumstances.'
The Court further observed as under:
'Indeed, in a matter between the Corporation and its debtor, a writ Court has no say except in two situations: (1) there is a statutory violation on the part of the Corporation or (2) where the Corporation acts unfairly i.e. unreasonably. While the formers does not present any difficulty, the latter needs a little reiteration of its precise meaning. What does acting unfairly or unreasonably mean? Does it mean that the High Court exercising its jurisdiction under Art. 226 of the Constitution can sit as an Appellate Authority over the acts and deeds of the Corporation and seek to correct them? Surely, it cannot be. That is not the function of the High Court under Art. 226. Doctrine of fairness, evolved in administration law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints-self-imposed undoubtedly of writ jurisdiction still remain. Ignoring them would-lead to confusion and uncertainty. The jurisdiction may become rudderless.'
10. The above ruling (AIR 1993 SC 1435) was relied upon by a Division Bench of this Court in the case of M. S. Kannauj Sandal Wood Distillery v. State Financial Corporation, 1993 (2) Civil RC 1280.
11. Another authority cited by the learned counsel for the respondent is U.P. Financial Corporation v. M/s. Naini Oxygen and Acetylene Gas Ltd., (1994) 7 JT (SC) 551: (1995 AIR SCW 254)-in which it was observed in para 21 (of JT): (para 13 of AIR) as under:
'However, we cannot lose sight of the fact that the Corporation is an independent autonomous statutory body having its own constitution and rules to abide by, and functions and obligations to discharge. As such, in the discharge of its functions, it is free to act according to its own light. The views it forms and the decisions it takes are on the basis of the information in its possession and the advice it receives and according to its own perspective and calculations. Unless its action is mala fide, even a wrong decision taken by itis not open to challenge. It is not for the courts or a third party to substitute its decision, however more prudent, commercial or business like it may be, for the decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable.'
The Court further observed in para 23 (of JT): (para 15 of AIR) as under:
'We are, therefore, of the view that this is not a matter where the High Court should have stepped in and substituted its judgment for the judgment of the Corporation which should be deemed to know its interests better whatever the sympathies the Court had for the prosperity of the company. In matters commercial, the courts should not risk their judgments for the judgments of the bodies to whom that task is assigned.'
12, The next case which can be usefully cited is AIR 1995 SC 1632, Chairman and Managing Director, SIPCOT, Madras v. Contromix Pvt. Ltd. in which the following observations were made in para 12:
'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 every body 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 public auction. In the event, the other suitable mode for selling of property can be by 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 endeavour should be made to give wide publicity so as to get the maximum price.'
Dealing with the case of Mahesh Chandra (AIR 1993 SC 935) (supra) the Apex Courtfurther observed in the same paragraph asunder:
'These considerations which govern the sale of public property have been held to be applicable to a sale of property, by the State Financial Corporations under S. 29 of the Act in Mahesh Chandra case, 1992 AIR SCW 3629 (supra). In that case this Court has held that sale by public auction is universally recognised to be the best and most fair method and is beyond reproach and, if it is not possible to adopt the said method, sale may be held by inviting tenders, but in that event every endeavour should be made to give wide publicity to get the maximum price- The said decision cannot, therefore, be construed as laying down that a sale by tender is impermissible and invalid. The learned Judges, in that case, have referred to the decisions of this Court in Sachidananda Pandey v. State of West Bengal, (1987) 2 SCR 223 : AIR 1987 SC 1109 and Haji T. M. Hassan v. Kerala Financial Corporation, (1988) 1 SCR 1079 : AIR 1988 SC 157, wherein it has been held that one of the modes of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. It cannot, therefore, be said that a sale by inviting tenders is ipso facto invalid. The validity of such a sale will have to be considered in the light of the. facts and circumstances of the particular case.'
13. Apart from the rulings of the Apex Court, the learned counsel for the respondent has also cited AIR 1994 Bombay 388 Nai-vedhyam Ice Cream Pvt. Ltd. v. Maharashtra State Financial Corporation, Bombay in which the case of Mahesh Chandra(AIR 1993 SC 935) (supra) as well as the case of Gem Cap (AIR 1993 SC 1435) (supra) have been considered and it has been observed in paragraph 28 as under:
'The principal question which thus needs consideration is whether the offer made by the petitioner in the instant case can be accepted in the light of the judgment in Mahesh Chandra's case, AIR 1993 SC 935, cited supra. In our view, merely because, the borrower is ready to give the same offer, asthat of the tenderer, it cannot be said to be the ratio of the judgment of the Supreme Court in Mahesh Chandra's case that such offer must be accepted by the Financial Corporation. It must be borne in mind that the question of recovery of the dues of the Financial Corporation is given primacy over the question of rehabilitation of the sick unit of the borrower in the later judgment of the Supreme Court in the case of M/s, Gem Cap (India) Pvt. Ltd., AIR 1993 SC 1435, cited supra as shown hereinbefore and therefore, the directions of the Supreme Court in Mahesh Chandra's case (AIR 1993 SC 935) have to be read and understood harmoniously with the above object focussed in the said case. Thus, before accepting such offer of the borrower it would be open to the Financial Corporation to examine in the light of all the facts and circumstances in each case whether the borrower making such offer would be able to comply with such offer particularly, when the payment is to be made by instalments spread over an appreciable period. In other words, the conduct of the borrower, past and present must inspire confidence in the Financial Corporation that it would be able to recover its dues, if similar facilities which are being given to the tenderer are also given to the borrower. Further, it must also feel confident that its dues remaining after payment of the last instalment of the price agreed to would be paid by the borrower in instalments which are again rescheduled. It is pertinent to see that in Mahesh Chandra's case the conduct of the borrower had inspired such confidence when apart from making payment towards his dues, he had made to the respondent No. 1 a substantial offer of about Rs. 5,00,000/- and old for full and final settlement of his dues. On the other hand, in public auction the price received was much lower.'
14. The last case which may be cited in this connection in (1994) 1 JT (SC) 586: (AIR 1994 SC 2151), Andhra Pradesh State Financial Corporation v. M/s. Gar Re-Rolling Mills, in which the controversy was slightly different. It was held that power under S. 31 of the Act is without prejudice to the provisions of S. 29 of the Act. The Apex Court observed as under (para 18):
'The Act was enacted by the Parliament with a view to promote industrialisation and offer assistance by giving financial assistance in the shape of loans and advances etc., repayable in easy instalments. The Corporation has to recover the loans and advances, so as to be able to give financial resources assistance to other industries and unless it recovers its dues, the money will not remain in circulation for long.'
15. The principles laid down in the above authorities have now to be applied to the facts of the present case. It has to be seen whether the Corporation has been fair to the petitioner and whether the petitioner made any genuine offer of 'One Time Settlement' or he made any request for a rehabilitation package or the petitioner offered to purchase the property himself or he brought any third party willing to purchase the property for an amount exceeding Rs. 1,10,000/- for which the Corporation has sold it to respondent No. 3.
16. So far as the offers of third persons are concerned Annexure 8 shows that one Devendra Kumar Sahu did give a bid of Rs.2,75,000/- but it should be noted that Devendra Kumar Sahu failed to deposit 25% of the amount when the Corporation wrote letter Annexure 8 to him. It therefore appears that the bid given by Devendra Kumar Sahu was not a genuine bid. The petitioner also relies on a letter Annexure 10 written by one Suresh Chandra of Badaun to the District Registrar complaining that the sale deed has been under-valued and that some other persons including himself are ready to pay for lacs of rupees for the same. It was further mentioned in letter Annexure 10 that if the property is put to public auction it can fetch considerably higher price.
17. In this connection it is significant to note that on 10-8-1990 a Division Bench of this Court of which one us (Hon'ble R. A. Sharma, J.) was a member passed the following order:
'Heard the arguments advanced by learned counsel for the parties in this writ petition. Shri S. K. Verma, learned counsel appearingfor the petitioner has urged before us thatthe value of the property which has been auctioned was at least Rs. 5 lakh at the time of auction. It has been urged that one of the bidders had even given a bid of Rs. 4 lakh which has riot been accepted by the U.P. Financial Corporation and a lower bid has been' accepted. He prays for and is granted two weeks' time to file a supplementary affidavit of the person who had made the bid of Rs. 4 lakh in the tenders which were invited by the U. P. Financial Corporation. The supplementary affidavit to be filed by the person who had made the tender will contain an averment to the effect that he is still prepared to pay the amount of Rs. 4 lakh by tendering a draft for that amount in Court along with other charges which may be payable by him to the person whose bid has already been accepted. It has further been prayed that auction of the petitioner's other property scheduled to be held on 13th August, 1990 for recovering the amount of Rs. 67,856.33 p. be stayed. In case the petitioner deposits in cash Rs. 34,000/- with the officer conducting the sale on and before the date and time of the auction sale, the person conducting the sale will not take further proceedings for auctioning the property. However, in case the amount is not deposited on or before the date and time of the auction sale, the officer will be well within its power to conduct and complete the auction sale.'
18. The petitioner failed to deposit the sum of Rs. 34,000/- and he also failed to file the affidavit of any person who intended to purchase the property for more than four lacs of rupees. The petitioner filed a supplementary affidavit sworn on 31-8-1990 in which it is stated in para 3 that Suresh Chandra has declined to purchase the property on the ground that the property was a disputed property. In para 4 of the supplementary affidavit the petitioner has stated that he requested some other persons but they also declined on the ground that it was a disputed property and they would not like to put a sum of four lacs of rupees on stake. It therefore appears that the allegations in paras 17 and 22 of the writ petition are not correct and there was no genuine buyer who was ready and willing to pay three lacs orfour lacs of rupees for the same property. Petitioner's son and pairokar Jitendra Kumar Verma has sworn another supplementary affidavit on 27-7-1991 in which some fanciful claims have been made so far as the valuation of the property is concerned. In para 3(ii) of the affidavit on the basis of an exemplar dated 20-3-1989 the valuation of the petitioner's land has been claimed to be as high as Rs. 13,82,000/-. In para3(iii) the valuation has been given as Rs. 6,75,000/- on the basis of an affidavit given by one Satish Chandra Khanna. This wide disparity in various valuations given by the petitioner shows that he has no regard for truth and has made reckless allegations.
19. After carefully going through all the material available on record this Court comes to the conclusion that the amount of Rs. 1,10,000/- for which the property has been sold by the Corporation to respondent No. 3 cannot be said to be so grossly inadequate that a presumption of unfairness on the part of the Corporation may be drawn. In para 20 of the counter affidavit the Corporation has stated that on 21-11-1987 a registered notice was issued to the petitioner, The petitioner has denied having received notice dated 21-11-1987 but he was fully aware that the Corporation is disposing of the property. He did not make any effort to bring any higher offer. His allegation that person like Devendra Kumar Sahu and Suresh Chandra were prepared to offer a higher amount have already been found to be false. Therefore the petitioner is not entitled to the relief which he has claimed. The relief claimed by the petitioner is that the sale deed dated 26-2-1988 executed by the Corporation in favour of respondent No. 3 may be called from the office of the Sub-Registrar and may be quashed. No case is made out for quashing the sale deed or for question notice Annexure '7'.
20. In view of the above discussion, the writ petition fails and is hereby dismissed. No order as to costs'.
21. Petition dismissed.