Reading a text file, need help cleaning exception handling
First off, in Java 7 all of this is obsolete if you use 'try with resources'

NavigableSet&lt;String&gt; dictionary = new TreeSet&lt;&gt;();
try (BufferedReader br = new BufferedReader(new FileReader("/Users/ameya.patil/Desktop/text.txt"))) {
    String line;
    while ((line = br.readLine()) != null) {
        dictionary.add(line.split(":")[0]);
    }
} catch (Exception e) {
    throw new RuntimeException("Error while reading dictionary");
}


If you have to work on an earlier JDK consider these points :

Both snippets you supply are not exactly equivalent. i.e. if closing the file fails, the first snippet will throw a RuntimeException wrapping the exception of the close(). The second snippet will throw a RuntimeException wrapping the original exception.

Again in SE 7 using the try with resources you'll be able to see both exceptions :  the original exception is thrown and it has the exception upon close() attached as a suppressed exception.

So I think style is irrelevant, you want the original exception (which may even not be related to I/O). If you can use SE 7, use that, otherwise go for snippet 2 (add logging for the exception on close())