JAY LAXMI SALT WORKS (P) LTD. VS.

THE STATE OF GUJARAT, 1994 (3) SC

492
-By MANISH SHARMA
CASE HISTORY:In 1954 the State of Gujarat made a plan for reclamation of Bundh(Dam) so as to
make lands in that are Saltish. The bundh was completed in 1955. The appellant who is
the owner of Jai Laxmi Salt Pvt. Ltd. wrote many times to the concerned authorities in
writing for either to abandon or to change the location of weirs so that the bundh
wouldnt affect the appellants factory premises, but this request was never acceded
and at the time of heavy down pour the appellant on finding the level of water rising
again ran to the authorities to request them to lessen the level of water so as to avoid
increased flow near the appellant factory but the authorities did not bothered as a
result of which the factory premises of the appellant got inundated on 5 th July,1956.
After the flood receded the premises the appellant approached for the compensation
which was about four lakh, but the Govt. wanted it to be privately assessed then an
official committee was framed on 24th August,1956 which calculated the loss suffered to
be Rs. 1,58,735 and the amount was not paid, so the appellant filed a suit for the
compensation. The trial court dismissed the suit on grounds of the inundation being
caused by Act of God, no negligence in weirs construction and on the grounds that the
suit is barred by time.
The appeal was then filed in Gujarat High Court which held that the liability as
enunciated in Rylands v. Fletcher and as modified by the Supreme Court in State of
Punjab v. Modern Cultivators were not applicable in this case and by the quantum of
time the suit was barred. Then the High Court granted the certificate under Article
133(1)(a) of Indian Constitution.
Honble Supreme Court on 4th May, 1994 held that the State is liable to pay the
compensation for the damage suffered by the appellant.

MATERIAL FACTS:The material fact in the case were the negligence on part of the bundh authorities and
the State officials, the faulty structural design however the court kept aside the fact of
quantum of time knowing that the suit was filed after two years.

KEY QUESTIONS:

Whether Article 36 of the Limitation Act, 1908, applies to the present case; or
Article 120 applies?; and
Whether the rule of strict liability as enunciated in Rylands v. Fletcher and as
modified by the Supreme Court in State of Punjab v. Modern Cultivators is
applicable to the facts of the present case?
Whether the rule of strict liability as enunciated in Rylands v. Fletcher and as
modified by the Supreme Court in State of Punjab v. Modern Cultivators were
invoking Article 36 of Limitation Act, 1908?

DECISION:-

The Supreme Court of India held by setting the two lower court aside. The suit of the
appellant for Rs. 1,58,735, the amount of damage determined by the trial court which
was neither appealed from nor objected to by the respondent is decreed with costs
throughout. The respondent shall further pay interest at the rate of 6% per annum from
the date of decree till December 1982 and at the rate of 9% per annum from 1982 to
December 1992 and at the rate of 12% per annum from January 1993 till the amount
is paid.

RATIO/PRINCIPLES APPLIED:Supreme Court while deciding the case clarified the Strict liability, Absolute liability,
Fault liability, Neighbour proximity, Malfeasance, Misfeasance and Non-feasance, Article
36 and Article 120 of the Limitation Act, 1908 within the realm of torts committed by
the respondent at both the stages while at the construction of the bundh and also at
failing to take reasonable steps at the time of compensating the appellant. The bench
at Supreme Court principled that entire tort is founded and structured on morality that
no one has right to injure or harm others intentionally or even innocently.

REASONING:The Supreme Court rationales that though the construction of the bundh was for the
sake of benefit of the community and this use of land cannot be non-natural use but
that cannot absolve the State from its duty of being responsible to its citizens for such
violations as actionable and result in loss or injury or any kind of damage. The thing
which is fundamentally important is the causation of the injury or damage and not the
manner in which it has been caused and once it is caused be it due to any tort may it
be negligence, nuisance, trespass and inevitable mistake etc. this give rise to tortious
liability. As in the given case the State or its officers are not liable only for breach of
care and duty but also they must be actuated with bad faith and intention as they did
not lend ear to the writings of the appellant.

CRITIQUE OF THE CASE:Justice Sahai observed that entire law of torts is founded and structured on morality
that no one has a right to injure or harm other intentionally or even innocently. I agree
with Justice Sahais observatoin because if it would have not been so then there is no
other core principle of deciding the hard case like this one. In this case the damage
caused to the appellant was not only due to the negligence of the officers but also due
to the failure in discharging public duty and mistake at various stages. The case has
been interpreted rationally and broadly but is whelmely narrowed while application is
done to give justice to appellant. Therefore, it would be primeval to close the everexpanding and growing horizon of tortious liability as it is necessary for orderly growth,
social development of the society and cultural refinesess. The decision is very much
consistent as it has been cited in many cases namely Court on its own motion vs .
State of Himachal Pradesh and Ors, 1988 CriLJ 438and Andhra Bank vs . Official
Liquidator and Anr,2005 and Union of India vs . United India Insurance Co . Ltd .
Ors,1997.