# M. P. MITTAL v. STATE OF HARYANA AND ORS

- **Citation:** [1985] 1 S.C.R. 940
- **Court:** Supreme Court of India
- **Decided:** 1985
- **Case number:** Civil Appeal No. 1936 of 1978
- **Bench:** R. S. Pathak, M. P. Thakkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-p-mittal-v-state-of-haryana-and-ors-8780
- **Pages:** 5

## Headnote

Constitution of India, Articles 32 and 226-Whether Court can decline
relief if its grant would de.feat the interests of justice.
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Dividend due and payable-Whether can be recovered as an arrear of land
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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
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 '
1that 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
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 i! open to the High Court to consider whether, in the exercise of its undoubted discreationary 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 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
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
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'sijudicial authority. [943E·FJ

## Text

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940
M. P. MITTAL
v.
STATE OF HARYANA AND ORS.
October JO, 1984
[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
E
F
G
H
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
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 '
1that 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
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 i! open to the High Court to consider whether, in the exercise of its undoubted discreationary 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 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
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
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'sijudicial authority. [943E·FJ
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.
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K.K. Jain, S.K. Gupta, P. Dayal and Arun D. Sauger for the
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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
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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.
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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 :
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[1985) 1 s.c.k.
"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
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
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 communications 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 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 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 ?
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-
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M.P. MiTTAL v. ilARYANA (Pathak, J.)
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 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
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 /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 examination for the first time and has not been processed earlier by an inferior judicial or quasi-judicial authortty. It is of some importance
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 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 !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
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t1985i I S.C.ii.·
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
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 a,s to costs.
M.L.A.
Appeal dismissed.