Holding

The claim is governed by Article 120 of the Limitation Act, 1908, giving a six‑year limitation period, and the rule in Rylands v Fletcher remains unmodified and does not apply, so the suit is not barred.

Summary

Jay Laxmi Salt Works (P) Ltd. sued the State of Gujarat for damages after flood water from a government‑built reclamation bundh entered its factory in July 1956. An official committee assessed the loss at Rs 1,58,735, which the State refused to pay. The trial court dismissed the suit as an act of God and barred it by limitation. The Gujarat High Court was divided: one judge applied Article 36 of the Limitation Act (two‑year period) and held the suit barred; another applied Article 120 (six‑year period) and held it timely. The Supreme Court allowed the appeal, holding that Article 120, not Article 36, governs the limitation for this tort claim, giving the appellant a six‑year period, and that the rule in Rylands v Fletcher has not been modified by State of Punjab v Modern Cultivators and is not applicable here. Consequently, the suit was not time‑barred and the appellant was awarded the assessed damages with interest.

Issues considered

Whether Article 36 of the Limitation Act, 1908 applies to the claim or the residuary Article 120 is applicable.
Whether the rule of strict liability in Rylands v Fletcher, as modified by State of Punjab v Modern Cultivators, applies to the State’s construction of the bundh.
Whether the suit is barred by limitation under the applicable article.
Interpretation of the phrase ‘when the malfeasance, misfeasance or non‑feasance takes place’ for the commencement of the limitation period.

Legislation cited

Limitation Act, 1908s. Article 120, s. Article 36

Subjects

Limitation ActArticle 36Article 120strict liabilityRylands v Fletchernegligencepublic dutyState liabilitytortflood damagereclamation bundh

Judgment

A JAY LAXMI SALT WORKS (P) LTD.
v.
THE STATE OF GUJARAT

MAY 4, 1994

B (KULDIP SINGH AND R.M. SABAJ, JJ.j

Limitation Act, 1908 (as it stood prior to 1963) :Articles 36 and
120-Reclamation bund/t-Erection of by Govemment-f'tood due to mon-
soon-Nearby factory flooded-Claim for damages-Independent assessment
C by Government-Non-payment of even the compensation assessed by Govern-
ment-Filing of suit-Whether suit ba"ed by limitation under Alticle 36 or is
covered under Article 12o-Held : suit covered under Article 120-Strict
liability-Rule in Rylands v. FletcheHleld: not modified by Supreme Court
in State of Punjab v. Modem Cultivators.

D In 1954, the then State of Saurashtra made a plan for reclamation
of vast area of land from saltish water of sea by erecting a reclamation
bundh. This work was completed in the year 1955. The appellant-factory,
which was located nearby, which was requesting the authorities either to
abandon the bundh or to change the location of the weirs so as not to face
E the factory. But before it could suceed in. its attempts, the 1956 mansoon
arrived and on the night between the 4th and 5th July, 1956 flood water
filtered to the premises of the factory breaking even the protective bundh
made by the appellant on the border of its factory.

After the flood receded, the appellant approached the authorities for
F redress and claimed damages of approximately rupees four lakh. At the
+
instance of the Government, the Chief Engineer submitted his report and
an Official Committee was appointed which found that the appellant
suffered a loss of Rs. 1,58,735. Since this amount was not paid, appellant
filed a suit for damages against the State Government and pleaded that
G there was no negligence either in the construction of the bcndh or in the
action of the officers and that the suit was barred by time. The Trial Court
dismissed the suit as it did not find any negligence as the damage was an
act of God. It also found that the suit was barred by time.

In appeal to the High Court, one of the Judges in the Division Bench
H held that the act of planning and construction of the bundh was done in a
866
JAYLAXMI SALT WORKS LID. v. STATEOFGUJARAT 867
negligent manner and so the damage caused to the appellant was due to A
the negligence. He set aside the finding of the Trial Court that the damage
suffered by the appellant was due to an act of God. However, the Judge
dismissed the suit as barred by time, as it could have been filed within two
years from the date the cause of action arose under Article 36 of the
Limitation Act, 1908. The other Judge agreed on questions of fact, but
differed on applicability of Article 36, as according to him Article 120
B
applied and the suit could have been instituted within six years from the
.. date the appellant suffered the damage .

In view of the difference of opinion among the Judges of the Division
Bench, the matter was referred to a third Judge, who held that Article 36
of the Limitation Act, 1908 was applicable to the suit and so it was barred
c
by limitation, and that the rule of strict liability in Rylands v. Fletcher,
[(1868) LR 3(330)] has not in terms been modified by the Supreme Court
in State of Punjab v. Mis Modem Cultivators, AIR (1965) SC 17. Hence this
appeal.
D
Allowing the appeal, this Court

HELD : 1. In between strict liability and fault liability there may be
numerous circumstances in which one may be entitled to sue for damages.
And it may be partly one or the other or may be both. In a welfare society
construction of dam or bundh for the sake of community is essential E
function and use of land or accumulation of water for the benefit of society
cannot be non-natural user. But that cannot absolve the State from its
duty of being responsible and result in damage, loss or injury. What is
fundamental is injury and not the manner in which it has been caused.
'Strict liability', 'absolute liability', .'fault liability', am: neighbour
proxmimity', are all refinements and development of law by English courts F
for the benefit of society and the common man. Once the occasion for loss
or damage is failure of duty, general or specific, the cause of action under
tort arises. It may be due to negligence, nuisance, trespass, inevitable
mistake etc. It may be even otherwise. In a developed or developing society
the concept of duty keeps on changing and may extend to even such G
matters. They may individually or even collectively give rise to tortuous
liability. Since the appellant suffered loss on facts found due to action of
respondent's officers both at the stage of construction and failure to take
., steps even at the last moment it was liable to be compensated. [876-B-E]
~

State of Punjab v. Modem Czdtivators, AIR (1965) SC 17; Jadu Nath H
868 SUPREME COURT REPORTS [1994j 3 S.C.R.

A Dandput v. Hmi Kar, l.L.R. 36 Cal. 41 and National Bank, Lahore v. Sohan
Lal Saigal & Ors., AIR (1965) SC 1663, referred to.

Joha11 Rylands & Jehu Horrocks v. Thomas Fletcher, [1863] LR (3)
330; Read v. Ly~ns & Company Ltd., (1947] Appeal Case 156; Rickards v.
Johan bigl;sh Lothian, [1913] Appeal Cases 263 and Bartlett v. Totte11ham,
B [1932] 1 Chancery 114, referred to.

2. The damage was caused to the appellant not only because of
negligence of officers but also because it was due to failure in discharge
of public duty and mistake at various stages. Liability in tort may arise
C without fault. The basic ingredients of torts, namely, injury and damage
due to failure to observe duty has been found to have been established. In
the conservative sense it was negligence. But in modern sense and present
day context it was not only negligence but mistJke, defective planning,
failure to discharge public duty. It was thus tort not in the narrow sense
but in the broader sense to which Article 120 applied. The suit, therefore,
D could not be thrown out as it was filed beyond two years from the date
the incident took place. The substantial question of law if Article 36 was
exhaustive of all torts is thus answered in the negative. Further the rule
in Rylands v. Fletcher has not been modified by this Court in Modem
Cultivators. And the Article of Limitation Act applicable to the facts of the
case was Article 120 and not Article 36. [882-F-H & 883-A]
E
John Rylands & Jehu Horrocks v. Thomas Fletcher, [1868] LR(3) 330;
State of Punjab v. Modem Cultivators, AIR (1965) SC 17; David Geddis v.
Proprietors of the Bann Reservoir, [1878] 3 AC 430; Tate and Lyle Industries
v. Greater London Council and Anr., (1983) 2 AC 509; Calveley and Ors. v.
.Chief Constable of the Mer.veyside Police and Ors., (1989) 1 All E.R. 1025
F and Dunlop v. Woollahra Municipal Council, (1981) 1 All E.R. 1202,
referred to.

3. The construction of the words, 'when and 'takes place' used in
Article 36 has to be construed liberally so as not to deprive the person
G who suffers damages. In wrongs like negligence, strict liability or violation
of public duty time begins to run not before the damage takes place. But
the computation under the Article has to be from malfeasance, mis-
feasance and non-feasance. The negligence or violation in such duty which
results in damage could not furnish the starting point. The cause of action
to claim damages arises when the aciual loss has taken place. It is thus
H not the date on which negligence or mistake took place but the date when
JAYLAXMISALTWORKS LTD. v. STATEOFGUJARAT[SAHAI,J.) 869

injury is suffered. But computation has to be from misfeasance or non· A
' feasance etc. that is violation of duty. This duty has to be different than
the duty which was the cause of negligence. Therefore in such actions
which are latent in nature the aggrieved party has to make a claim for
damages and it is the failure in discharge of this duty in this regard which
too can furnish the starting point of limitation. Since the authorities
refused to pay damages even though it was got assessed at their own B
direction the computation of the period for filing suit could arise from
the date. Otherwise it would cause great injustice. A common man, an
average citizen who in a developing country cannot afford to pay huge
court fee would be deprived of his just claim only because. he was pursuing
his remedy vigilantly in the government of a welfare State. (884-C-F)
c
4. The computation for purposes of limitation under Article 36 could
commence either from the date when malfeasence, misfeasance or non·
feasance occurred or from the date when the damage took place or where
claim is lodged within period allowed by law and the damage is ascer-
tained then from the date the claim is rejected. It is the improper perfor- D
mance of duty or arbitrary action of the authorities in not accepting the
claim when damage was found by the official committee to have taken
place. The limitation to file the suit on facts of this case arise from the
date the Government refused to pay the amount determined by the com·
mittee. Since the rejection was not communicated nor the copy of the
report was supplied despite request the suit could not be said to be barred E
by time. [884-G-H, 885-A-B]

CIVIL APPELLATE JURISDICTION: Civil appeal No. 2482172.

From the Judgment and Order dated 13.12.1971 of the Gujarat High
Court in F.A. No. 190/62. F

Mrs. Purnima Bhatkak, Ms. Rina Agarwala and E.C. Agarwala for
the Appellants.

S.C. Patel and Anip Sachthey for the Respondent
G
The Judgment of he Court was delivered by

R.M. SAHAI, J.This appeal by grant of certificate under Article
133(J)(a) of the Constitution of India by the High Court of Gujarat raises
substantial question of law about applicability of the period of limitation
as provided in Article 36 of the Limitation Act, 1908 (referred to as 'the H
870 SUPREME COURT REPORTS [1994] 3 S.C.R.

A Act') as it stood prior to 1963 to claini of damage founded on negligence. t
The High Court was of opinion that the controversy whether Article 36
could apply to rule laid down in John Rylands & feint Hon-ocks v.. 17wmas •·!
Fletcher, (1868) LR 3 330 raises a question of general importance which
required to be authoritatively decided by this Court.

B The certificates granted by the High Court under Article 133(1)(a)
of the Constitution was in following terms :

"The main question involved is that of limitation and whether
,,,
the rule in RYLANDS v. FLETCHER, would result in;oking the
provisions of Art. 36 of the old Limitation Act or whether Art. 39
c of the Act would be the appropriate Article or whether the
residuary Art. 121 applies and that is a substantial question of law.
This point has not yet been decided by any decision of the Supreme
Court directly on the point and hence is a substantial question of
law which is of importance to the petition before us as well of t
D general public importance and hence the certificate is granted
under Art. 133(1)(a) of the Constitution." '
Although the finding of fact recorded by the High Court that the
Stale was guilty of negligence has become final since the State did not
E challenge it by way of cross appeal or cross objection yet it appears
necessary to give a brief outline of it in order to appreciate the controversy
and the legal issues that arise for consideration in this appeal. Jn 1954 the
State of Saurashtra, which now is part of State of Gujara•, made a plan
for reclamation of vast area of land from saltish water of sea by erecting a
'reclamatio:.1 bundh' so as to prevent the sea water flowing in several creeks
F ~
in the area on the sea side of the bundh form flowing furtiler to the claimed
site and making the lands in that area saltish. This bundh was completed
in the year 1955. In the very first monsoon of 1956, due to change of natural
course of different streams in the reclaimed area and its diversion towards
the appellant's factory which was existing from before led to increased flow
G and discharge of water on appellant's land and factory. The appellant even
~
before the construction of the bundh had been writing to the authorities
concerned either to abandon the bundh or to change the l,1cafon of weirs
!
so as not to face the appellant's factory. But this request had not been
acceded to and when there was heavy downpour and tho appellant found + , •
I
H that the level in the river was rising he ran from one authority to other
JAYLAXMISALTWORKS LTD. v. STATEOFGUJARAT[SAHAJ,J.] 871

requesting them to lessen the level of water and avoid increased flow near A
his factory with no result. By the time his ;unning could bring forth any
movement the flood level rose to such an extent in the night between 4th
and 5th July 1956 that water filtered to the premises of the factory breaking
even the protective bundh made by the appellant on the border of its
factory. After the flood receded the appellant approached the authorities B
and the Government for redress and claimed damages of approximately
Rupees Four Lakh. It was asked by the Government to get it privately
• assessed. And the Chief Engineer Charotar Gram Udhar Sahkari Mandali
Limited, Vallabh Vidyanagar did submit a report on 30th August 1956. On
24th August 1956 an official Committee was appointed and the Committee
found that the appellant had suffered a loss Rs. 1,58,735. Since this amount
c
was not paid the appellant filed the suit for damages against the State.
Amongst many defences raised the two main were that there was no
negligence either in the construction of the bundh or in the action of the
officers and the suit was barred by time. In respect of the quantum
determined by the Committee it was claimed that it was not acceptable to D
the State Government. Various issues were framed. The Trial Court dis-
missed the suit as it did not find any negligence as the damage was an act
of the God. It further found that the suit was barred by time. In first appeal
in the High Court one of the judges who constituted the Bench and wrote
the leading judgment held that the construction of bundh by the State could E
not be termed as non-natural user as, 'the dam was erected over the land
and streams of water. The purpose was t.o save the lands on the reclamation
site from becoming useless. Therefore, the dam in question, was just like,
which, an owner of a field would erect, where the boundary of his land is
eroded by constant flow and rush of water'. After discussing the oral and F
documentary evidence in detail the learned Judge held that the act of
planning and construction of the bundh was done in a negligent manner
and the damages caused to the appellant were ascribable to the negligence
of the concerned officers in planning and constructing the bundh. The
learned Judge set aside the finding of the Trial Court that the damage
suffered by the appellant was due to an act of God. It was specifically held G
that the appellant proved the negligence on the part of the officers of the
then State Government in planning and construction of the bundh as a
result of which flood water entered the factory of the appellant on 4th and
5th July 1956 causing extensive damage. Yet the suit was dismissed as
H
872 SUPREME COURT REPORTS (1994] 3 S.C.R.

A according to the learned Judge the suit cuuld have been filed within two •.'
years from the date the cause of action arose under Article 36 of the Act.
But since the suit was filed after two years, I J months and 15 days from
the date of incident it was barred by time. The other Judge who constituted
the Bench agreed with learned Judge on the questions of fact but differed
B on applicability of Article 36 of the Act. He held that Article which was
applicable to such cases was the residuary Article 120 of the Act, therefore,
the suit could have been instituted within six years from 5th July 1956 the
date on which the appellant suffered damages. In view of difference of •
opinion between the two learned judges on question of law the following
order was passed :
c
"Since we differ on the questions whether Article 36 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 the STATE DF PUNJAB v. MIS
MODERN CULTIVATORS (supra) is applicable to the facts of
D
the present case, this appeal shall have to be under Clause 36 of
the Letters Patent, referred to third Judge."

The third Judge framed two questions extracted below which according to
him arose on difference of opinion between the learned judges who con-
E stituted the division bench :

"(1) Whether article 36 of the Limitation Act, 1908, applies to the
present case; or Article 120 applies?; and

(2) Whether the rule of strict liability as enunciated in RYLANDS
F 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? 11

Both the questions were answered as under :

G "(1) Article 36 of the Limitation Act, 1908, applies to the present
case and I hold that the suit is barred by limitation.

(2) The rule of strict liability as enunciated in RYLANDS v.
FLETCHER has not in terms been modified by the Supreme Court
in STATE OF PUNJAB v. MIS MODERN CULTIVATORS; and
H in any event, the rule of strict liability as enunciated in RYLANDS

I
>
JAYLAXMISALTWORKSLTD. v. STAfEOFGUJARATiSAHAl,J.] 873

v. FLETCHER even as modified, if it is so held to be modified, is A
not applicable to the facts of the present case."

Are the answers correct? Was Article 36 as it stood in the relevant
period, prior to 1963 exhaustive of torts as held hy the High Court? What
was the scope of malfeasance, misfeasaflce and non-feasance?. Was the rule
of Rylands v. Fletcher (supra) applicable? Has it been modified by our
B
court in State of Punjab v. Modem Cultivators, AIR (1965) SC 17? Prior to
• adverting to these issues it appears appropriate to notice in brief how the
High Court grappled with the problem. Mr. Justice Sheth who agreed on
facts with Mr. Justice Desai, was of the opinion that, liability could arise
out of malfeasance, misfeasance or non-feasance or even independently of c
any of them. But Article 36 applied if it arose out of any one of them only.
He thereafter discussed the rule of strict liability as explained by the
English courts in Rylands v. Fletcher (supra), its modification in Read v. J.
Lyons & Company Ltd. (1947) Appeal Cases 156 the vivicitudes it suffered
subsequently in Rickards v. John Inglis Lothian (1913) Appeal Cases 263 D
and Ba1tlett v. Tottenhm (1932) 1 Chancery 114 both on natural and
non-natural user of land and artificial collection of goods resulting in injury
and various exceptions carved out of it. The learned Judge then discussed
the ratio in the State of Punjab v. Modem Cultivators, (supra) and observed,
that the rule of strict liability as modified by this Court entitled the
E
appellant to successfully claim damages.

Mr. Justice Desai did not agree with Mr. Justice Sheth on ap-
plicability of strict liability as erection of dam by the Government on own
land to save other land could not be held to be non-natural user. He,
F
however, held that the act of planning and construction of the bundh in
question was done in a negligent manner. He, therefore, set aside finding
of the Trial Court that it was an act of God. Having held so the learned
_, Judge relied on Essoo Bhayaji v. The Steamship Savitri, l.L.R. 11 Bombay
133 and observed as under :
G
"this decision lays down a principle that for all actions of tort not
specifically provided for in other articles of schedule I, the proper
article to apply will be Article 36, which is a residuary article so
-1
far as actions based on torts including negligence are concerned.
Having considered Articles 19 to 27, we find that they provide for H
874 SUPREME COURT REPORTS [1994] 3 S.C.R.

A actions in cases of specific types of torts."

And as Article 36 of the Act applied to actions based on negligence, and
the suit was filed after two years from the date of cause of action arose the
Trial Court did not commit any error in dismissing the suit as beyond time.

B When the matter went to the learned Third Judge Mr. Justice Divan
held, that the decision in Essoo Bhayaji (supra) and Jadu Nath Dandput
v. Hari Kar, I.LR. 36 Cal. 41 even though not referred received imprimatur •
in National Bank, Lahore v. Sohan Lal Saiga/ & Ors., AIR (1965) SC 1663.
Consequently so far actions in torts were concerned Article 36 was
C residuary article the period of limitation under which would start from the
time the tort took place. The learned Judge was further of opinion that
even if question of liability was based on the rule in Rylands v. Fletcher,
(supra) as modified in Modem Cultivators (supra) instead of negligence the
same result would follow so far as limitation was concerned as liability
D based on rule of this decision was as much liability in tort as on negligence
the only difference being that in the former it is unintended and even
independent of negligence. The learned Judge held that, the words,
'malfeasance', 'misfeasance' and non-feasance' were to be understood.

11
as synonymous with the compendious expression, 'torts' and there-
E fore they must be read as equivalent to tort and the period of
limitation would start from the time when the tort takes place.'.'

To determine if the law stated, seemingly, so simply by the learned
third Judge yet so broadly, is accurate understanding of the exhaustiveness
F of the expression used in Article 36 as extending to all kinds of torts it may +
be necessary to understand the meaning and scope of torts and the width
and ambit of the expression used in Article 36. 'Tort' dictionarily means
'breach of duty leading to da~age'. Same meaning attaches to it in law.
Salmond has defined it as,

G "a civil wrong for which the .remedy is a common law action in
unliquidated damages and which is not exclusively the breach of a
contract or the breach of a trust or other merely equitable obliga-
tion."

H Winfield has defined tortuous law arising from, breach of a duty primarily
JAYLAXMISALTWORKS LTD. v. STATEOFGUJARAT[SAHAl,J.] 875

fixed by law; this duty is towards persons generally and its breach is A
redressable by an action for unliquidated damages. In general, torts consist
of some act done without just cause or i.:xcuse. 'The Law of Torts exist for
the purpose of preventing men from hurting one another whether in
respect of their property, their presence, their reputations or anything
which is theirs.' Injury and damage are two basic ingredients of tort. B
Although these may be found in contract as well but the violations which
may result in tortuous liability arc breach of duty primarily fixed by the law
while in contract they are fixed by the parties t_hemselves. Further in tort
the duty is towards persons generally. In contract it is towards specific
person or persons. An action for tort is usually a claim for pecuniary
compensation in respect of damages suffered as result of the invasion of a
c
legally protected interest. But law of torts being a developing law its
frontiers are incapable of being strictly barricated. Liability in tort which
in course of time has become known as 'strict liability', 'absolute liability',
'fault liability' have all gradually grown and with passage of time have
become firmly entrenched. 'Absolute liability' or 'special use bringing with D
it increased dangers to others' Rylands v. Fletcher (supra) and 'fault liability'
are different forms which give rise to action in torts. The distance between
'strict liability' and 'fault liability' arises from presence and absence of
mental element. A breach of legal duty wilfully, or deliberately or even
maliciously is negligence emanating from fault liability but injury or damage E
resulting without any intention yet due to lack of foresight etc. is strict
liability. Since duty is the primary yardstick to determine the tortuous
liability its ambit keeps on widening on the touchstone_ of fairness, prac-
ticality of the situation etc. In Donoghue v. Stevenson, (1932) AC 562 a
manufacturer was held to be liable to ultimate consumer on the principle F
of duty to care. In Anns & Ors. v. Merton London Borough Council (1978)
' AC TlB it was, rightly, observed,

"the broad general principle of liability for foreseable damage is
so widely applicable that the function of the duty of care is not so
much to identify cases where liability is imposed as to identify those G
where it is not, ............. .

Truly speaking 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. Therefore, it would be primitive to class strictly or close finality H
876 SUPREME COURT REPORTS [1994] 3 S.C.R.

A the ever-expending and growing horizon of tortuous liability. Even for
social development, orderly growth of the society and cultural refincncss r
the liberal approach to tortuous liability by courts is more conducive.

In between strict liability and fault liability there may be numerous
circumstance in which one may be entitled to sue for damages. And it may
B be partly one or the other or may be both. In a welfare society construction
of dam or bundh for the sake of community is essential function and use
of land or accumulation of water for the benefit of society cannot be
non-natural user. But that cannot absolve the State from its duty of being
responsible to its citizens for such violations as are actionable and result
c in damage, loss or injury. What is fundamental is injury and not the manner
in which it has been caused. 'Strict liability', 'absolute liability, 'fault
liability', and 'neighbour proximity', are all refinements and development
of law by English courts for the benefit of society and the common man.
Onee the occasion for loss or damage is failure of duty, general or specific,
D the cause of action under tort arises. It may be due to negligence, nuisance,
trespass, inevitable mistake etc. It may be even otherwise. In a developed
or developing society the concept of duty keeps on changing and may
extend to even such matters as was highlighted in Donoghue v. Stevenson
(supra) where a manufacturer was held responsible for injury to a con-
sumer. They may individually or even collectively give rise to tortuous
E liability.Since the appellant suffered loss on facts found due to action of
respondent's officers both at the stage of construction and failure to take
steps even at the last moment it was liable to be compensated.

But to be actionable and get redress from court it must assume legal
F · shape by falling in one or the other statutorily, judicially or even otherwise
recognised category of wrong. That is why the appellant based his claim •
on negligence. Therefore, it is necessary to determine what is the ambit of
it as it was vehemently urged that once the State was found guilty of
negligence the appellant could succeed not only by establishing negligence
but also approaching the court within the statutory pe;iod provided under
G the Law of Limitation and the courts were precluded from invoking either
the rule of strict liability or any other concept. According to the learned
counsel civil liability should be dealt within the forecorner of statutory
enactments both for sake of certainly and uniformity irrespective of
whether the party benefited was the State or an individual. For this sub-
H mission advanced with plausibility it appears necessary to determine how
JAYLAXMISALTWORKSLTD. v.STATEOFGUJARATISAHAl.J.] 877

wide or narrow is the ambit of negligence in realm of torts. Can it be strictly A
"\ compartmentalised? When the State was found reluctant in discharge of
its duties or public responsibility then was it negligence alone or it was
something more or less?

'Negligence' ordinarily means failure to do statutory duty or other-
wise giving rise to damage. Winfield has defined 'neglignece' as under : B
" "Negligence" as a -tort is the breach of a legal duty to take care
which results in damage, undesired by the defendant, to the plain-
tiff. Thus its ingredients are -

(a) a legal duty on the part of A towards B to exercise care in such c
conduct of A as falls wit__hin the scope of the duty:

(b) breach of that duty ;

consequential damage to B. "
D
According to Dias,

"liability in negligence is technically described as arising out of
damage caused by the breach .of a Quty to take care 11 •

These text books thus make it amply clear that the axis around which E
the law of negligence revolves is duty, duty to take care, duty to take
reasonable care. But concept of duty, its reasonableness, the standard of
care required can.not be put in straight jacket. It cannot be rigidly fixed.
The right of yesterday is duty of today. The more advanced society becomes
the more sensitive it grows to violation of duties by private or even public F
• functionaries. Law of Torts and particularly the branch of negligence is
consistently influenced and transformed by social, economic and political
development. The rule of strict liability developed by English courts in
Rylands v. Fletcher (supra} was judicial development of the liability in
keeping with ·growth of society and necessity to safeguard the interest of a
common man again.st hazardous activities carried on by others on their own G
premises even though innocently. By conservative standard it could not be
termed as negligence as damage arose not by violation of duty. Yet the law
was expended to achieve the ohjective of protecting the common man not
by narrowing the horizon of legal injury but by-widening it. In Donoghue
v. Stevenson (supra) the House of Lords held a duty to take care as a H
878 SUPREME COURT REPORTS [1994] 3 S.e.R.

A specific tort in itself. Even improper exercise of power by the authorities
giving rise to damage has been judicially developed and distinction has (

been drawn between power coupled with duty. Where there is duty the
exercise may not be proper if what is done was not authorised or not done
in the bonafide interest of the public. In David Geddis v. Proprietors of the
B Bann Reservoir, (1878) 3 AC 430 the failure to keep the reservoir clear as
a result of blameworthy negligence leading to overflow was held to be liable
for negligence. It was reiterated in Tate and Lyle Industries v. Greater
London Council & Anr., (1983) 2 AC 509. It was held that where public
right was interfered which resulted in public nuisance the claim for

C
damages was maintainable. The English courts have extended the principle
of strict liability to varied situations. Thus the distinction arising out of
damage due to negligence and even without it rather unintentionally and
innocently is firmly established branch of law of tort. In Read v. J. Lyons
-
& Co. Ltd., (1947) AC 156 it was observed that damage caused by escape
of cattle to another land was a case of pure trespass constituting a wrong
D without negligence. Thus negligence is only descriptive of those sum total
of activities which may result in injury or damage to the other side for
failure of duty both legal or due to lack of foresight and may comprise of
more than one concepts known or recognised in law, intended or unin-
tended.

E Was the ratio in Rylands v. Fletcher (supra) modified by this Court
in Modem Cultivators (supra) If so to what extent? What is its effect on
facts of this case? That was a case where the land of the plaintiff used for
silting operation was flooded due to escape of canal water. It was claimed
that in absence of proof of negligence the suit was not liable to be decreed.
The Court did not apply the principle laid down in Rylands v. Fletcher,
F (supra) 'that any occupier of land who brings or keeps upon it anything
likely to do damage if it escapes is bound at his peril to prevent it escape
and is liable for all the direct consequences of its escape, even if he has
·been guilty of no negligence ................. a principle derivatively created from
the rule of ".strict liability" ............ as canal syst<>ms are essential to the life of
G a nation and land that is used as canals is suh1ected to an ordinary use and
not of unnatural use'. The Court preferred to rely on the principle
developed by American courts on canal breaks and applied the principle
of 'fault liability' which may even be inferred from circumstances. The view
of the High Court, therefore, that the rule of strict liability was modified
by this Court in Modem Cultivators (supra) does not appear lo be correct.
H 'Absolute liability', or 'Strict liability' and, 'Fault liability' do not go
JAY LAXMI SALT WORKS LTD. v. STATEOFGUJARAT(SAHAI,J.] 879

together. A
. '
With this background it may now be examined if the High Court,
even after recording the findings in favour of the appellant, was justified
in throwing out the suit because Article 36 is residuary Article extending
to all kinds of torts. The Article as it stood at material time prior to 1963
read as under : B

11
Time from which
Description of suit Period of limitation
., period begins to run
.............................
36. For compensation for Two years When the malfea- c
any malfeasance, misfeasance sance, misfeasance
or nonfeasance independent or non-feasance
of contract and not herein takes place.
specially provided for."
D
In Black's Law Dictionary the meaning of each of these expression is
explained as under :

"Malfeasance - Evil doing; ill conduct. The commission of some act
which is positively unlawful; the doing of an act which is wholly
wrongful and unlawful; the doing of an act which person ought not E
to do at all or the unjust performance of some act which the party
had no right or which he had contracted not to do. Comprehensive
term including any· wrongful conduct that affects, interrupts or
interferes with the performance of official duties.
F
.• Misfeasance - The improper performance of some act which a man
may lawfully do.

Non-feasance - Non performance of some act which ought to be .
performed, omission to perform a required duty at all, or total
neglect of duty."
G

Stroud defines it as under :

.. "Misfeasance - There is no such distinct wrongful act known to the
law as 'misfeasance'. H
880 SUPREME COURT REPORTS [1994] 3 S.C.R.

A Non-feasance - The decisions as to 'non- feasance' cannot be
•
invoked to excuse a highway authority from liability for nuisance
caused by a defective stud brought on to the highway, not for the
purpose of the highway, but for purposes of traffic regulation under
the Road Traffic Acts."

B
The words are undoubtedly of very wide import. They are strong expres-
sions as well. Malfeasance and non-feasance bring into motive, intention,
malice etc. Law of torts, however, is not confined and cannot be strictly
categorised. Where the State undertakes common law duty its actions may
give rise to common law tort. Negligence in performance of duty is only a
c step to determine if action of Government resulting in loss or injury to
common man should not go uncompensated. If construction of bundh is
· common law or public duty then any loss or damage arising out of it gives
rise to tortuous liability not in the conservative sense bnt certainly in the
modern and devel~ping sense. A common man, a man in the street cannot
D be left high and dry because wrongdoer is State. The basic element of tort
is duty. And that comes into play fully when there is a common law duty.
Since construction of bundh was a common law duty any injury suffered by
a common man was public tort liable to be compensated. Can it be said to '
be covered in the expressions used in Article 36? Malfeasance and mis-
feasance necessarily import intention, knowledge and malice, therefore,
E they may not be available in every tortous liability arising out of violations
of public duty. Evil doing or ill conduct postulates something more than
mere omission or commission. Misfeasance is now recognised as imputable
to discharge of duty arbitrarily. In Calveley and Ors. v. Chief Constable of
the Merseyside Police and Other, {1989) 1 All E.R. 1025, it was held that
F for the tort of misfeasance it was necessary that the public officer must
have acted maliciously or with bad faith. In Dunlop v. Wool/ahra Municipal
Council, (1981) 1 All E.R. 1202 it was held that without malice the claim
for misfeasance could not be accepted. Non-feasance on the other hand is
omission to ·aischarge duty. But the omission to give rise to action in torts
must be impressed with some characteristic, namely inalice or !Jad faith.
G Tile expressions 'malfeasance', 'misfeasance', and 'non-feasance' would,
therefore, apply in those limited cases where the State or its officers are
liable not only for breach of care and duty but it must be activated with
malice or bad faith. The defective planning in construction of a bundh,
therefore, may be negligence, mistake, omission but to say that it can only
/
H be either malfeasance, misfeasance or non-feasance is not correct. Obser-
...
JAYLAXMISALTWORKS LTD. v. STATEOFGUJARAT[SAHAI,J.] 881

vations in Bhayaji (supra) to the following effect, A
'The words malfeasance, misfeasance, or non-feasance inde-
1 11

pendent of contract" used in article 36, are of the widest import,
and embrace all possible acts or omissions, commonly known as
torts by English lawyers; that is to say, wrongs independent of
contract. 11
B
were made in different context and was not intended to be so widely stated
as has been understood by the High Court as the Court while examining
various articles of Limitation Act for purposes of deciding if the claim was
covered in one or the other articles observed,
c
"I rather from such a perusal come to the conclusion that it was
intended that two years should be the outside time allowed for
bringing a suit founded upon tort, except in· certain well-defined
particular instances. 11
D
Similarly Jadu Nath Dandput v. Hari Kar, (supra) was a case of illegal
distress and carrying of the standing crops. the Court did not agree that it
> was a case squarely covered under Article 36 as the cause of action arose
partly under Article 36 and partly under Article 49. But what impressed
the High Court was the extract from Stephen's Commentaries t9 the
following effect, E
11
Personal actions are actions founded either on contracts or on
torts; tha( is to say, they are either actions ex contracatu or actions
er delicto; torts being wrongs independent of contract; and being
either (i) nonfeasances, or the omission of acts which a man was
bylaw bound to do, or (ii) malfeasance, or the commission of acts, F
which wereAhemselves unlawful."

That is why is was observed that these decisions even though not noticed
received approval in National Bank of Lahore Ltd. v. Sohqn Lal S,f!igal &
Others (supra). Although the Court held that claim for damages for los~ or G
contents from the lockers arose out of breach of contract and it was not a
case which could be considered to be covered under tort yet while dealing
with argument advanced on Article 36 the Court observed.

"Article 36 applied to acts or omissions commonly known as torts
by English lawyers. They are wrongs independent uf contract. H
i

882 SUPREME COURT REPORTS [1994] 3 S.C.R.

A Article 36 applies to actions "ex-delicto" whereas Article ll5 ap-
plies to actions '1ex contractu 11 •

These torts are often considered as of three kinds, viz., non-
feasance or the omission of some act which a man is by law bound
to do, misfeasance, being the improper performance of some lawful
B act, or malfeasance, being the commission of some act which is in
itself unlawful".

This extract was understood by the High Court as demarcating all viola- •'
tions either as 'exdelicto' or :ex contractu'. But it was erroneous under-
r standing of the decisions to hold that Article 36 was residuary Article and
applied to all tortuous liabilities. The Court itself had taken care by using
the word 'often'. Even in England where the law of torts has been
developed demarcations have not been frozen so rigidly as has been
attempted to be done by the High Court. Use of expression, 'not herein
D specifically provided for' in Article 36 was to make it residuary Article lo
such wrongs for which limitation was provided in the Article but the
interpretation placed by the High Court that it was exhaustive of all torts
was not conformity with principle of interpretation nor the scheme and
r
purpose of the enactment. This Court in National Bank case extracted the
English principle to demonstrate that it was residuary provision to distin-
E guish it from contractual obligations but it could not be narrowed down so
as to be exhaustive of all torts. As explained earlier damages arising out of
strict liability or duty to take care as was in Donoghue v. Stevenson (supra)
or public law duty may not be strictly covered in these expression. As has
been explained earlier the damage was caused to the appellant not only
F because of negligence of officers but also because it was due to failure in
discharge of public duty and mistake at various stages. Liability in tort may
arise as observed by Salmond without fault. The basic ingredients of torts,
namely, injury and damage due to failure to observe duty has been found
to have been established. Jn the conservative sense it was negligence. But
in modern sense and present day context it was not only negligence but
G mistake, defective planning, failure to discharge public duty. It was thus
tort not in the narrow sense but in the broader sense to which Article 120
applied. The suit, therefore, could not be thrown out as it was filed beyond
two years from the date the incident took place. The substantial question
of law if Article 36 was exhaustive of all torts is thus answered in the
H negative. Further the rule in Rylands v. Fletcher, (supra) has not been
JAYLAXMISALTWORKSLID. v.STATEOFGUJARAT[SAJW,J.J 883

•· modified by our Court in Modem Cultivators (supra). And the article of A
Limitation Act applicable to the facts of the case was Article 120 and not
Article 36.

Even assuming that Article 36 of the Act applied, was the suit filed
after expiry of two years from the date the incident took place, barred by
time? In other words what is the exact point of time from when the period B
of limitation has to be computed. The First Schedule to the Act as it then
stood made three divisions, one, for suits, second for appeal and third for
applications. The nature and description of the suit is mentioned in the 1st
Column of the Schedule, period of limitation in the 2nd and the time from
which the period begins to run in the 3rd and the last column. In contents c
the former deals when the right to sue accrues the latter when the right
shall come to an end if not exercised within the period provided as it
cannot remain uncertain or in doubt or in suspense forever and the last
deals with computation, namely, the point from which the limitation begins
to run. A look on the entries in the first division would indicate that D
different point of time has been adopted for different nature of suits. In
some it is from the date of the order, in others from the date of knowledge.
In yet others when the cause of action accrues ·etc. For compensation for
damages it is linked either with nature of claim, namely, if it is one time of
cause of action or recurring cause of action etc. That is why in some of
these items the period begins to run from the time and date of the incident E
and in others from the date of knowledge. In Article 36 the time begins to
run,

"when the malfeasance, misfeasance or non·feasance takes place."
, F
The word 'when' means at what time. The time according to finding
recorded by the High Court was negligence in act of planning and con-
struction of bundh. When did it take place. Take has many shades of
meaning. How it should be understood, precisely, in a set of circumstance
depends on the context in which it has been used. Literally speaking it can
mean when it happens but that would not be consistent with the purpose G
of its use and may defeat the very objective as malfeasance or non- feasance
arose not on 4th or 5th July but when dam was starte.d in 1955 and in any
, case when completed in 1956. At that time there could have been no
occasion for the appellant to claim any damages. Therefore, time obviously
' cannot be said to run either from the date the construction of bundh was H
884 SUPREME COURT REPORTS IJ994] 3 S.C.R.

A commenced or it \Vas completed. Therefore, the computation has to he
from some other point. For instance, \vhcrc there is a single wrong the time
may start running immediately. In cases of assault, baltery or death the
cause of action may arise immediately. The limitation may he counted from
that very point. ll is the individual or tlu: single act whith by itself furnishes
the cause of action. But there may be others where even though injury may
B have been caused but the cause of action may not arise unless something
more happens. For instance if one accumulates something hazardous on its
own premises and it leaks then the cause of action will arises not by
accumulation or even by mere leakage but cause of damage and injury.
Therefore, the construction of the words, '\vhen' and 'takes place' used in
c Article 36 has to be construed liberally so as not to deprive the person who
suffers damages. In wrongs like negligence, strict liability or violation of
public duty time beings to run not before the damage takes place. But the
computation under the Article has to be from malfeasance, misfeasance
and non-feasance. It has been explained earlier that the negligence or
D violation in such duty \vhich results in damage could not furnish the starting
point. What could be the other point? The cause of action to claim
damages arises when the actual loss has taken place. It is thus not the date
on which negligence or mistake took place but the date when injury is
suffered. But computation has to be from misfeasance or non- feasance etc.
that is violation of duty. This duty has to be different than the duty which
E was the cause of negligence. Therefore in such actions which are latent in
nature the aggrieved party has to make a claim for damages and it is the
failure in discharge of this duty in this regard which too can furnish the
starting point of limitation. Since the authorities refused lo pay da~ages
even though it was got assessed at their own direction the computation of
F the period for filing suit could arises from that date. Otherwise it would '
cause great injustice. A common man, an average citizen who in a develop-
ing country cannot afford to pay huge court fee would be deprived of his
just claim only because he was pursuing his remedy vigilantly in the
government of a welfare State.
r
I
.)..

G Therefore the computation for purposes of limitation under Article
36 could commence either from the date when malfeasance, misfeasance
or non-feasance occurred or from the date when the damage took place
t
or where claim is lodged within period allowed by law and the damage is
ascertained then from the date the claim is rejected. It is the improper
H performance of duty or arbitrary action of the authorities in not accepting
JAYLAXMISALTWORKSLTD. v.STATEOFGUJARAT[SAHAJ,J.] 885

the claim when damage was found by the official committee to have taken A
place. The limitation to file the suit on facts of"this case arise from the date
the Govt. refused to pay the amount determined by the committee. Since
the rejection was not communicated nor the copy of the report was
supplied despite request the suit could not be said to be barred by time.

In the result, this appeal succeeds. The decree and order passed by B
the two courts below are set 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 or objected 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% C
per annum from 1982 to December 1992 and at the rate of 12% per annum
from January 1993 till the amount is paid.

G.N. Appeal allowed.

·\. j