I found out the exact reason behind it after 3 days research,
It is nothing but a virus.Called something like http=127.0.0.1:8080;https=
127.0.0.1:8080,which changes the proxy settings from automatic to manual
127.0.0.1:8080 again n again.
I found it with updated version of Malwarebytes Anti-Malware and removed it.
It came with
install shield wizard update,while connected to internet connection it gives a notification to update windows to windows 10.
Following registry were effected,
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Internet Settings
HKEY_LOCAL_MACHINE\SYSTEM\ControlSet001\Services\NlaSvc\Parameters\Internet\ManualProxies
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\NlaSvc\Parameters\Internet\ManualProxies
HKLM\Software\Policies\Microsoft\Internet Explorer\Control Panel
HKEY_LOCAL_MACHINE\Software\Policies\Microsoft\Windows\CurrentVersion\Internet Settings
HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Windows\CurrentVersion\Internet Settings\Connections
Manual change in this registry entries wont help unless the virus is removed.And most antivirus (I used AVG IS) and anti-spyware failed to detect it.
this also change LAN settings to "this settings are managed by system admin" Unless you open ID as an admin and go to it.
changing this reg. entry "HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Internet Explorer\Control Panel" from 1 to 0 only helps until you restart.