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Issues involved: Dismissal of writ petition by High Court in limine, recovery of dividend amount as arrear of land revenue, applicability of clause in Guarantee agreement, refusal of relief by High Court, need for High Court to provide reasons for dismissal of writ petition in limine.
Dismissal of writ petition by High Court in limine: The appellant, who guaranteed payment of dividend income due on preference shares, failed to pay the amount, leading to coercive measures by the Haryana State Industrial Development Corporation Limited. The High Court summarily dismissed the writ petition challenging the recovery proceedings, as the appellant did not attempt to discharge the liability despite being provided with an opportunity. The Supreme Court held that the High Court was justified in refusing relief, emphasizing that the court can decline relief if it would defeat the interests of justice or perpetuate an unjust gain. Recovery of dividend amount as arrear of land revenue: The key question raised was whether the amount due from the appellant could be recovered as an arrear of land revenue based on a private agreement. The Supreme Court noted that the appellant knowingly entered into the Guarantee agreement and was liable to pay the dividend amount. The court found that the appellant did not dispute the amount due and had the means to discharge the liability, thus ruling that he was not entitled to relief in the proceedings. Applicability of clause in Guarantee agreement: Another question raised was whether a specific clause in the Guarantee agreement could be used for recovering the dividend payable to the Haryana State Industrial Development Corporation Limited. The Supreme Court did not delve into this issue as it focused on the appellant's liability and the refusal of relief by the High Court. Refusal of relief by High Court: The Supreme Court highlighted that the High Court's discretion to decline relief under Article 226 of the Constitution is crucial to prevent the misuse of writ jurisdiction for dishonest advantages. In this case, the High Court's decision to dismiss the writ petition in limine without providing reasons was deemed appropriate, as the appellant failed to discharge the liability despite opportunities to do so. Need for High Court to provide reasons for dismissal of writ petition in limine: The Supreme Court recommended that the High Court should incorporate brief reasons for dismissing a writ petition in limine to promote transparency, credibility, and public confidence in the judicial system. Providing reasons for such dismissals would assist parties in understanding the basis of adverse decisions and aid higher courts in reviewing the judgments effectively. Conclusion: The Supreme Court dismissed the appeal without any order as to costs, upholding the High Court's decision to refuse relief to the appellant in the writ petition challenging the recovery proceedings for the unpaid dividend amount.
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