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PETITIONER: M. P. MITTAL

       Vs.

RESPONDENT: STATE OF HARYANA AND ORS.

DATE OF JUDGMENT10/10/1984

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. THAKKAR, M.P. (J)

CITATION:  1984 AIR 1888            1985 SCR  (1) 940  1984 SCC  (4) 371        1984 SCALE  (2)555

ACT:      Constitution of  India,  Articles  32  and  226-Whether Court can  decline relief  if its  grant  would  defeat  the interests of justice.      Dividend due and payable-Whether can be recovered as an arrear of land revenue including the mode of detention where such right is founded in private agreement.

HEADNOTE:      The Haryana  State Industrial  Development  Corporation Limited  (for   short,  the   Corporation)  underwrote  some preference shares of M/s. Depro Foods Limited. The appellant Managing Director of M/s . Depro Foods Ltd. guaranteed by an agreement in  his  personal  capacity  the  payment  of  the dividend income  due in  respect of  the aforesaid shares to the Corporation.  One of  the provisions  in  the  guarantee agreement  declared  "that  the  dues  on  account  of  this guarantee will  be recoverable  in the  manner in which land revenue is  collected by  the Government."  The  Corporation applied to  the Assist and Collector for instituting recover proceedings, against  the appellant because M/s. Depro Foods Ltd. failed  to pay  Rs, 1,96,961  representing the dividend payable by  it. The Assistant Collector issued a warrant for the arrest  of the  appellant since he made no effort to pay up the  amount due  from him.  The appellant  filed  a  writ petition in  the High Court against the recovery proceedings which was  dismissed in limine. Hence this appeal by special leave.      Dismissing the appeal, ^      HELD: (1)  This Court always has power to refuse relief where the  petitioner seeks  to invoke its writ jurisdiction in order  to secure  a dishonest advantages or perpetuate an unjust gain.  Under art. 226 of the Constitution, it is open to the  High Court  to consider  whether, in the exercise of its undoubted  discretionary jurisdiction, it should decline relief to  such petitioner  if the  grant  of  relief  would defeat the  interests of  justice, The  High Court was fully justified in refusing relief to the petitioner. [943C; B] 941      (2) In  the instant  case the  appellant knowingly  and deliberately entered  into the  Guarantee Agreement,  and is

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liable as Guarantor to make payment of the dividend due from Messrs Depro  Foods Limited.  It was  not contended that the appellant in  fact does  not  possess  sufficient  funds  or cannot avail of sufficient personal property for the purpose of discharging the liability. The record also shows that the appellant made  no attempt  to discharge the liability. When that  is   so  he   is  not  entitled  to  relief  in  these proceedings. [942H; 943A-B]      (3)  It   is  desirable   that  the  High  Court,  when dismissing a  writ petition  in limine  should set  forth  a brief statement  of the  reasons for  its order  instead  of disposing of  the proceedings by the single word ’dismissed’ especially in those cases where the matter in controversy in the subject  of judicial  examination for the first time and has not  been processed  earlier by  an inferior judicial or quasi judicial authority. [943E-F]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1936 of 1978.      Appeal by  Special leave  from the  Judgment and  order dated the  2nd August,  1978 of  the Punjab  & Haryana  High Court in Civil Writ Petition No. 3272 of 1978.      K.K. Jain,  S.K. Gupta, P. Dayal and Arun D. Sauger for the Appellant.      Harbans Lal,  Ms. Kailash  Mehta and R.N. Poddar or the Respondent.      The Judgment of the Court was delivered by      PATHAK, J  This appeal  by special  leave  is  directed against the  judgment and  order of the High Court of Punjab and Haryana dismissing a writ petition in limine.      Messrs. Depro  Foods Limited  entered into  a  contract with the  Haryana State  Industrial Development  Corporation Limited, whereby  the said Corporation underwrote preference shares of Messrs. [, Depro Foods Limited of Rs. 100 each for a total  value of  Rs. 3.6  lacs on which a dividend of 9.5% per annum  was payable. The appellant who was apparently, at the relevant  time, the  Managing Director  of Messrs. Depro Foods  Limited,   executed  an   agreement  under  which  he guaranteed in  his personal  capacity  the  payment  of  the dividend income  due in  respect of  the aforesaid shares to the said  Corporation. It is not disputed that Messrs. Depro Foods Limited  did not  pay Rs.  1,96,961  representing  the dividend payable  to the said Corporation, and therefore the appellant became  personally liable as Guarantor to pay that amount. lt  seems that  on the  failure of  the appellant to make payment,  the said  Corporation invoked  a provision in the Guarantee agreement which declares: 942           "5. That  the dues  on account  of this  guarantee      will be recoverable in the manner in which land revenue      is collected by the Government".      Consequently it  applied to  the  Assistant  Collector, Sonepat, for instituting recovery proceedings. The Assistant Collector commenced  coercive measures,  which included  the issue of  a warrant  for the  arrest of  the appellant.  The appellant filed  a writ  petition in  the High  Court but  a Division Bench  of the  High Court passed an order on August 2, l 978 summarily dismissing the writ petition      At one  stage during  the hearing  of  this  appeal  it appeared possible that the dispute could be resolved if even now after a lapse of six years the appellant was prepared to discharge his  liability as  Guarantor by  making payment to

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the Corporation  of the  amount sought  to be  recovered, if necessary in  accordance with  a convenient time schedule of instalments, but  Shri K.K.  Jain, learned  counsel for  the appellant,  stated   frankly  that   in  spite  of  repeated communications to  his client  he had not received any reply from him.      The questions  have been  raised by learned counsel for the appellant.  Both questions  arise on the assumption that the appellant  is liable to pay the amount due from him. The first question is: Whether the amount can be recovered as an arrear of  land revenue,  including the  mode by  detention, where such right is founded in private agreement ? The other questions is: If the recovery is made by reference to clause (bb) of  s. 98  of the  Punjab Land  Revenue Act, 1887 which speaks of:-           "(bb) Dividend  payable to  the Government  on  1.      Cumulative Redeemable  Preference Shares  subscribed by      or on behalf of the Government".      Can that  clause be  employed for  recovering  dividend payable to  Haryana State Industrial Development Corporation Limited ?      Now there  is no  dispute that  the appellant knowingly and deliberately  entered into  the Guarantee agreement, and is liable  as Guarantor  to make payment of the dividend due from Messrs Depro Foods Limited. Nor is it disputed that the amount due, with interest, stands at  2,02,166 in respect of the period  ending with  the year 1977. It was not contended that the appellant in fact does not possess sufficient funds or cannot avail of sufficient per- 943 sonal property for the purpose of discharging the liability. The record  also  shows  that  before  instituting  coercive proceedings, the  Assistant Collector provided the appellant an opportunity  to pay  up the amount due from him, and that the appellant  make no  attempt to  discharge the liability. When that  is so,  we are of opinion that he is not entitled to relief  in these  proceedings. The appeal arises out of a writ petition, and it is well settled that when a petitioner invokes the jurisdiction of the High Court under Article 226 of the  Constitution, it  is  open  to  the  High  Court  to consider  whether,   in  the   exercise  of   its  undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice.  The Court  always has  power to  refuse  relief where the  petitioner seeks  to invoke its writ jurisdiction in order  to secure  a dishonest  advantage or perpetuate an unjust gain.  This is  a case where the High Court was fully justified in  refusing relief.  On that  ground  alone,  the appeal must fail.      Before parting  with this case, we think it appropriate to point  out that  it would  be beneficial  to the  general administration of justice if in certain cases where the High Court disposes of a writ petition in limine it does so by an order incorporating the reasons for such order. Where a case is admitted to final hearing, the judgment of the High Court disposing of  the appeal  almost invariably  sets forth  the reasons for  its decision;  We think  it desirable that even when a  writ petition  is dismissed in limine the High Court should set  out its  reasons, however briefly, for doing so, especially in those cases where the matter in controversy is the subject  of judicial  examination for the first time and has not  been processed  earlier by  an inferior judicial or quasi judicial  authority. It  is of  some importance p that party should  know from  the court  of  first  instance  the reasons for  an adverse  decision received  by it,  for that

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promotes acceptance  of the  judgment  and  thereby  ensures credibility  and   public   confidence   in   the   judicial institution. It  must be  remembered  that  the  High  Court exercises original  jurisdiction under  Article 226  of  the Constitution, and  it is  only appropriate that a petitioner whose writ  petition is dismissed in limine should know what are the  precise reasons  for the adverse order, whether the writ petition  has been  rejected on the ground of laches or other  preliminary   ground  or   on  the   merits  of   the controversy, and  what are  the reasons  of the  High  Court therefor. We  may add  that a  brief  statement  of  reasons rendered by the High Court, when dismissing the writ 944 petition in  limine, is  of great  assistance also  to  this Court when  the judgment  and order  of the  High Court  are sought to he brought here by a petition for special leave to appeal. To  sum up,  we think  it desirable  that  the  High Court, when  dismissing in  limine, should set forth a brief statement of  the reasons for its order instead of disposing of the proceeding by the single word "dismissed".      Upon the  considerations set  forth earlier, we dismiss the appeal but without any order as to costs. M.L.A.    Appeal dismissed. 945