- (1.) This appeal by grant of certificate under Art. 133(l)(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 Art. 36 of the Limitation Act, 1908 (referred to as 'the Act') as it stood prior to 1963 to claim of damages founded on negligence. The High Court was of opinion that the controversy whether Art. 36 could apply to rule laid down in Rylands v. Fletcher, (LR (1868) 3 HL 330) raises a question of general importance which required to be authoritatively decided by this Court.
(2.) The certificate granted by the High Court under Art. 133(l)(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 invoking the provisions of Art. 36 of the old Limitation Act or whether Art. 39 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 petitioner before us as well of general public importance and hence the certificate is granted under Art. 133(l)(a) of the Constitution".
(3.) Although the finding of fact recorded by the High Court that the State was guilty of negligence has become final since the State did not 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. In 1954 the State of Saurashtra, which now is part of State of Gujarat, made a plan for reclamation of vast area of land from saltish water of sea by erecting a 'reclamation bundh' so as to prevent the sea water flowing in several creeks in the area on the seaside of the bundh from flowing further 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 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 location 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 the appellant found that the level in the river was rising he ran from one authority to the other requesting them to lessen the level of water and avoid increased flow near his factory with no result. By the time his running 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 and the Government for redress and claimed damages of approximately Rupees Four Lakhs. 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 of Rs. 1,58,735. Since this amount 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 the State Government. Various issues were framed. The trial Court dismissed the suit as it did not find any negligence as the damage was an act of 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 not be termed as non-natural user as, "the dam was erected over the land and streams of water. The purpose was to 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 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 officers concerned 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 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 according to the learned Judge the suit could have been filed within 2 years from the date the cause of action arose under Art. 36 of the Act. But since the suit was filed after 2 years, 11 months and 15 days from the date of the incident it was barred by time. The other Judge who constituted the Bench agreed with learned Judge on the questions of fact but differed on applicability of Art. 36 of the Act. He held that Article which was applicable to such cases was the residuary Art. 120 of the Act, therefore, the suit could have been instituted within 6 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 : "Since we differ on the questions whether Art. 36 applies to the present case or Art. 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 of Punjab v. Modern Cultivators is applicable to the facts of 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 constituted the Division Bench : "(1) Whether Art. 36 of the Limitation Act, 1908, applies to the present case; or Art. 120 applies and (2) Whether the rule of strict liability as enunciated in Rylands v. Fletcher (LR (1868) 3 HL 330) and as modified by the Supreme Court in State of Punjab v. Modern Cultivators (AIR 1965 SC 17) is applicable to the facts of the present case." Both the questions were answered as under : "(1) Art. 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. Modern Cultivators; and in any event, the rule of strict liability as enunciated in Rylands v. Fletcher even as modified, if it is so held to be modified, is not applicable to the facts of the present case.";