So I just installed Android Studio again after a long time and it asked me to configure the proxy, so I did. I tested the connection and it worked.
Then it asked me
I caught with same issue and was trying bypass proxies in Mac. Removed proxy from system-level(bashrc) and studio(gradle.properties). had no luck!
Found the studio unable to bypass the proxy, finally found the proxy was cahced in gradle in below file.
~/.gradle/gradle.properties
Essentially to make sure proxy referenes were muted in all gradle.prorties, inlcuding gradle cache.
gradle cache could be find as below(in Android view)