mjhjmtu

The server1's correct state is shut off but when i run the command as normal user it shows the state as running for normal user and shut off with sudo

[msingh@localhost VMFiles]$ virsh list --all
 Id Name State
----------------------------------------------------
 1 server1 running

[msingh@localhost VMFiles]$ sudo virsh list --all
[sudo] password for msingh: 
 Id Name State
----------------------------------------------------
 - generic shut off
 - server1 shut off
 - server2 shut off
 - windows shut off

[msingh@localhost VMFiles]$ 

here is another command:

[msingh@localhost server1]$ sudo virsh dominfo server1
Id: -
Name: server1
UUID: acd31081-b513-4e46-b2a2-20ad6bb9ac2e
OS Type: hvm
State: shut off
CPU(s): 1
Max memory: 1048576 KiB
Used memory: 1048576 KiB
Persistent: yes
Autostart: disable
Managed save: no
Security model: selinux
Security DOI: 0

[msingh@localhost server1]$ virsh dominfo server1
Id: 1
Name: server1
UUID: 8f6fa56a-b062-424a-9100-7f411df1c28b
OS Type: hvm
State: running
CPU(s): 1
CPU time: 18.8s
Max memory: 1024 KiB
Used memory: 2048 KiB
Persistent: yes
Autostart: disable
Managed save: no
Security model: selinux
Security DOI: 0
Security label: unconfined_u:unconfined_r:svirt_t:s0:c290,c658 (enforcing)

By default, sudo virsh will access the system libvirt instance.

virsh as an unprivileged user, will try to access the libvirt instance for that user.

You have a VM called server1 in the user instance, and a VM called server1 in the system instance, but these are not the same VM :). Your output shows they have different memory configurations, for example.