Jai Laxmi Salt Works Ltd. v. State of Gujarat 1994 (3) SCC 492

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133

    1994 (3) SCC 492: Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant - fault liability - The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133
    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant

    Facts Jai Laxmi Salt Works Ltd. v. State of Gujarat: –

    The State of Gujarat in the year 1954 plan for the restoration of the area of land. This restoration was made from the saltish water of the sea by making a bundh (dam) to stop the area from being saltish. The restoration work was finally achieved in the year 1955 but it led to damage to the nearby property. The appellant had a factory near the bundh made.

    He made several requests before the competent authorities to either desert the bundh or alter the course of weirs so that the factory does not get flooded. The concerned authority did not take any action for the same. Once, during a heavy downpour, the factory of the appellant got drowned in water, resultantly causing a lot of damage to the appellant. He further claimed damages of 4 lakhs from the government. A committee was formed by the government to look into the matter and calculate the actual damages. The damages were around Rs.1,58,735 and which was never paid.

    Issues raised: –

    • Whether Article 36 of the Limitation Act, 1908 or Article 120 applies in the present case?
    • Whether the rule of Rylands v. Fletcher by the Supreme Court is applicable in this case? Has it been modified in the case of State of Punjab v. Modern Cultivators?
    • What is the scope of malfeasance, misfeasance & nonfeasance?

    History of the case: –

    1. Trial Court –

    The suit was dismissed by the Trial Court as they were of the view that the case has got nothing to do with negligence. The damages caused were the result of an act of god further it was also noted by the Court that the suit was barred by time. 

    • High Court –

    When the first appeal was made in High Court, a two-judge bench was created to look into the matter. The two-judge bench failed because of the difference of opinion between the judges. Further, the case went to a third judge who observed that strict liability as articulated by Rylands v. Fletcher although modified by Supreme Court in State of Punjab v. Modern Cultivators was not applicable in regards to the case and Article 36 (3). He further noted that the particular suit is time-barred.

    After another appeal, the Supreme Court granted the suit in favor of the appellant under Article 133 (1) of the Constitution.

    Judgment in Jai Laxmi Salt Works Ltd. v. State of Gujarat: –

    The case was heard by Justice R.M. Shahi. The honorable judge held that the construction of the dam was not a non-natural act that means the government can not do away from the duty of care that it owes towards the residence of the state. Further, he clarified the conflict over Article 36 and said that it is not a residuary article. It is also not applicable to all tortious liability. The exhaustive interpretation is against the very intention of Article 36. Expressions such as ‘strict liability and ‘duty of care may not be under the blanket of Article 36.

    In the following case, the damage was not only caused by negligence but also because of the breach of duty of care by the competent authority. Tortious liability is there but is broad sense under Article 120. The court further held that tortious liability might either be caused by malfeasance, misfeasance, or non-feasance or caused differently; what is important is the causation of tort. The defendant was held liable for breaching its duty of care as the construction of bundh was a common law duty, and any damage suffered by a common man had to be compensated, irrespective of who the accused is. A common man cannot be left deserted because the wrongdoer is a State. The quintessential of tort is duty.

    The court did not follow the principle established in the case of Rylands v. Fletcher whereas it took resort over the principle of the American Courts on the canal. The court applied the principle of ‘fault liability’ as the facts of the case highlighted. The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together.

    In regards to the limitation period, the Honorable judge observed that under Article 36 of the Limitation Act, the period could be determined either from the date when the tort occurred or from when the suit was filed and subsequently dismissed. Hence, the appeal succeeded. The court awarded Rs. 1,58,735 along with three interest brackets of 6%, 9%, and 12% up to January 1993.

    Conclusion: –

    The law of tort is greatly influenced by society at large. The laws are a connection between law and morality. If the compensation is not granted to the appellant then it would be a greater wrong to the appellant. In a developing country, if the common man is not compensated for the wrongdoings of the state in the course of public welfare then it will be a great injustice to the common man. Negligence should not be applied rigidly whereas it should be made flexible as per the changing society. 

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133

    Jai Laxmi Salt Works Ltd. v. State of Gujarat: law of tort: If the compensation is not granted to appellant then it would be a greater wrong to the appellant – fault liability – The rule of strict liability was not modified in the case of State of Punjab v. Modern Cultivators, Strict Liability and Fault Liability do not go together. ARticle 36, Article 132, Article 133