1994 (5) TMI 267 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of Article 36 of the Limitation Act, 1908.
2. Rule of strict liability as enunciated in Rylands v. Fletcher.
3. Negligence in the planning and construction of the bundh.
4. Computation of the period of limitation.

Summary:

1. Applicability of Article 36 of the Limitation Act, 1908:
The High Court granted a certificate under Article 133(1)(a) of the Constitution of India, raising a substantial question of law about the applicability of the period of limitation as provided in Article 36 of the Limitation Act, 1908, to a claim of damages founded on negligence. The High Court framed the issue as whether Article 36, Article 39, or the residuary Article 120 applies to the case. The trial court dismissed the suit as barred by time, applying Article 36, which provides a two-year limitation period for compensation for any malfeasance, misfeasance, or nonfeasance independent of contract. The third Judge held that Article 36 applied, and the suit was barred by limitation. The Supreme Court, however, concluded that Article 36 was not exhaustive of all torts and that the suit was not barred by time under Article 120, which allows a six-year limitation period.

2. Rule of Strict Liability as Enunciated in Rylands v. Fletcher:
The High Court was divided on whether the rule of strict liability as enunciated in Rylands v. Fletcher and modified by the Supreme Court in State of Punjab v. Modern Cultivators applied to the facts of the case. The third Judge held that the rule of strict liability had not been modified by the Supreme Court and was not applicable to the present case. The Supreme Court affirmed that the rule in Rylands v. Fletcher had not been modified by the Court in Modern Cultivators and that strict liability was not applicable.

3. Negligence in the Planning and Construction of the Bundh:
The High Court found that the State was guilty of negligence in planning and constructing the bundh, which led to the flooding of the appellant's factory. The trial court's finding that the damage was an act of God was set aside. The Supreme Court agreed with the High Court's finding of negligence and held that the State was liable to compensate the appellant for the damages caused.

4. Computation of the Period of Limitation:
The Supreme Court examined the point of time from which the period of limitation should be computed. The Court held that in cases of negligence, strict liability, or violation of public duty, time begins to run not before the damage takes place. The Court concluded that the limitation period could commence either from the date when the damage took place or from the date when the claim was rejected by the authorities. Since the authorities refused to pay damages even though it was assessed at their own direction, the computation of the period for filing the suit arose from that date. Consequently, the suit was not barred by time.

Conclusion:
The Supreme Court allowed the appeal, set aside the decree and order passed by the lower courts, and decreed the appellant's suit for Rs. 1,58,735 with costs and interest. The Court held that Article 120 of the Limitation Act, 1908, applied to the facts of the case, and the suit was not barred by time.