M. P. MITTALversusSTATE OF HARYANA AND ORS.

       940

A


                                  M. P. MITTAL

B                                         v.

                     STATE OF HARYANA AND ORS.

                                  October JO, 1984

c                   [R. S. PATHAK AND M. P. THAKKAR, JJ.]


         Constitution of India, Articles 32 and 226-Whether Court can decline
    relief if its grant would de.feat the interests of justice.

D        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.

        The Haryana State Industrial Development Corporation Limited (for short,
    the Corporation) underwrote some preference shares of M/s. Depro Foods
E   Limited. The appellant Managing Director of M/s. Depro Foods Ltd.
    guaranteed by an agreement in his personal capacity the payment of the divi-
    dend income due in respect of the aforesaid shares to the Corporation. One of
    the provisions in the guarantee agreement declared ' 1 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 Assistand
    Collector for instituting· recover proceedings, against the appellant because
F   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 procee-
     dings which was dismissed in limine. Hence this appeal by special leave.

             Dismissing the appeal,
G
          HELD : (1) This Court always has power to refuse relief where the peti-
    tioner 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 i! open to the High Court to consider whether, in the exercise of its un-
    doubted discreationary jurisdiction, it should decline relief to such petitioner
    if the grant of relief would defeat the interests of justice, The High Court was
H   fully justified in refusing relief to the oetitoner. [943Cj; Bl
                     M.P. MITTAL v. HARYANA"(Pathak, J.)                         941
       (2) In the instant case the appellant knowingly and deliberately entered
into the Guarantee Agreement, and is liable as Guarantor to make payment of             A
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 oroperty for the purpose of discharging the liability. The
record :-Jso shows that the appellant mad•! no attempt to discharge the liability.
When that is so he is oot entitled to relief in these proceedings. [942H; 943A-B]

         (3) It is desirable that th!! High Court, when dismissing a writ petition      B
 in lirnine 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 qua'si-
 judicial authority. [943E·FJ

     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1936 of 1978.                      c
        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                         D
Appellant.
     Harbans Lal, Ms. Kailash Mehta and R.N. Poddur or the
Respondent.
       The Judgment of the Court was delivered by
      PATHAK, J This appeal by special leave is directed against                        E
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, where-
 by the said Corporation underwrote preference shares of Messrs.                        F
 Depro Foods Limited of Rs. JOO 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                      U
 said Corporation. It .is not disputed that Messrs. Depro Foods
 Limited did not pay Rs. l ,96,961 representing the dividend payable to
 the said Corporation, and therefore the appellant became personally
 liable as Guarantor to pay that amount. It seems that on the failure
 of the appellant to make payment, the said Corporation invoked a
 provision in the Guarantee agreement which declares :                                  H
    942              sin>REMB COURT REPORTS                [1985) 1 s.c.k.

A              "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 com~en­
B   ced 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, 1978 summarily dismissing the writ petition.

           At one stage during the hearing of this appeal it appeared
c   poss;ble 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 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 couusel for
    the appellant, stated frankly that in spite of repeated communica-
D   tions to bis 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 appel-
    lant is liable to pay the amount due from him. The first question
    is : Whether the amount can be recovered as an arrear of land
E   revenue, including the mode by detention, where such right is foun-
    ded in private agreement "/ The other questios 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
          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 ?

G         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
H   does not possess sufficient funds or cannot avail of sufficient per-
                  M.P. MiTTAL v. ilARYANA (Pathak, J.)             943

sonal property for the purpose of discharging the liability. The           A
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 made 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      B
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 de-
 cline 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    c
 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     D
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       E
writ petition is dismissed in /imine the High Conrt should set out
its reasons, however briefly, for doing so, especially in those cases
where the matter in controversy is the subject of judicial examina-
tion for the first time and has not been processed earlier by an in-
ferior judicial or quasi-judicial authortty. It is of some importance      fl
that party should know from the court of first instance the reasons
for an adverse decision received by it, for that promotes acceptance
of the judgment and thereby ensures credibility and public confi-
dence 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           G
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 !aches or other preliminary ground
or on the merits of the controversy, and what are the reasons of the
High Conrt therefor. We may add that a brief. statement of
reasons rendered by the High Court, when dismissing the writ               H
    944               stlPllllMil COURT REPORTS              t1985i I S.C.ii.·

A   petition in limlne, is of great assistance also to this Court when the
    judgment a,nd order of the High Court are sought to be 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
B
    set forth a brief statement of the reasons for its order instead of dis-
    posing of the proceeding by the single word "dismissed",

         Upon the considerations set forth earlier, we dismiss the
    appeal but without any order a,s to costs.
c



    M.L.A.                                               Appeal dismissed.