JAY LAXMI SALT WORKS Ltd. vs STATE OF GUJARAT (1994 SCC (4) 1)

By Divay Kakkar, Bba.Llb (H)

Vivekananda Institute of Professional Studies (VSLLS)

 

INTRODUCTION

Tort refers to a civil wrong that causes the claimant to suffer loss/harm, that results in legal liability for the person who commits this act towards the one who suffered.

Tort Law is majorly concerned with Civil cases. It comes into force to help a person when a wrong has been done to him and help him claim compensation from the ones who did wrong to the claimant, generally monetary compensation. The main essence of Tort Law is to provide whole compensation for proven wrongs.

The case of Jay Laxmi Salt Works vs. the State of Gujarat is a Landmark Judgement in the evolvement of Tort Law as it decides when the State could be held legally liable for its act of negligence. The innocence of the common public was taken into consideration while deciding the fate of the case.

Malfeasance is the doing of an act that is wholly wrongful and unlawful

Misfeasance is the improper performance of some act which a man may lawfully do

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

 

FACTS OF THE CASE

In the year 1954, The Government of the State of Gujarat passed a provisional contract of construction of a Dam (Bandh) to make sure that the land doesn’t get wasted. The Dam was built successfully in the year 1955. The appellant side i.e., Jay Laxmi Salt Works Ltd. wrote several applications to the related authorities about either shifting the location of the project or completely sacking the project, but in vain. The concerned authorities didn’t take any appropriate action regarding this issue and continued the construction work. On the 5th of July, [1]1956, there was heavy rainfall around that area and the water level in the dam reached above the safe level. Subsequently, the Appellant’s factory premises were flooded with the excess water from the dam, causing severe damage to the property and material. The appellant party approached the Hon’ble Court with a claim of compensation worth Rs. 4 lakhs. The authorities vouched for a private evaluation of losses, for this purpose, a Committee was formed, namely Charotar Gram Udhar Sahkari Mandali Limited and the loss turned out to be Rs. 1,58,735, which were never paid. Hence, the Appellant moved forward to Trial.

 

ISSUES

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

 

TRIAL TIMELINE

Trial Court- In the Trial Court, the suit was dismissed by the bench as they were of the point of view that the case has got no relation with negligence. The damages that the appellant faced were the outcome of an act of God. Another main point highlighted by the jury was that the suit was time-barred.

High Court- When the case was first presented in the High Court, a Bench of two Judges was established to overlook the matter. The Bench couldn’t reach a mutual decision due to the difference in opinions of both the Judges, the case was referred to a third Judge and the following statement was formed:

“Since we differ on the question 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 [2]and as modified by the Supreme Court in the State of Punjab v. Modern Cultivators [3]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 was of the view that strict liability as articulated by Rylands v. Fletcher, although amended by the Supreme Court of India in the judgement of State of Punjab v. Modern Cultivators was not relevant to the case and Article 36 of the Limitation Act was applicable. He also quoted that the Suit was time-barred.

Hence, the appellant moved to the Supreme Court of India, where the suit was granted in the Appellant’s favour.[4]

JUDGEMENT

The Judgement of the Court was delivered by Hon’ble Justice R.M. Sahai as follows-

“Therefore, the computation for purposes of limitation under Article 36 could commence either from the date when malfeasance, misfeasance or nonfeasance occurred or from the date when the damage took place or where the claim is lodged within the period allowed by law and the damage is ascertained then from the date the claim is rejected. It is the improper performance 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 arises from the date the Government refused to pay the amount determined by the Committee. Since the rejection was not communicated nor the copy of the report was supplied despite the request the suit could not be said to be barred by time.

As a result, this appeal succeeds. The decree and order passed by the two courts below are set aside. In 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.”[5]

 

ANALYSIS

While the High Court ruled the judgement in favour of the Respondent i.e., the State of Gujarat on the basis that the construction of Dam was not a non-natural act the main purpose of the construction was the welfare of the public, the Supreme Court ruled that even though the construction of the Dam was a non-natural act, this doesn’t imply that the Government can walk away from its responsibility of care that it owes to the general public.

Also, the High Court stated that the Suit was time-barred as it should have been filed within 2 years according to Article 36 of the Limitation Act, 1908, but was filed after 2 years, 11 months and 15 days. The Supreme Court ruled that this case should not just be limited to the narrow scope of Article 36, instead, Article 120 shall be applied and a Suit can be filed within 6 years. The time taken into consideration for filing the Suit should not be estimated from the date when the construction of the Dam began but from when the accident took place. The court also quoted that the appellant cannot claim damages from the day when the construction began because as per Torts Law, a claim for compensation can only be made after the injury has been caused.

The court also made the difference between malfeasance, non-feasance and misfeasance pretty clear. Malfeasance and non-feasance bring in motive, intention and malice. Malfeasance and misfeasance necessarily import intention, knowledge and malice; therefore, they may not be applicable in every tortious liability arising out of violation of public duties. Evil doing or ill conduct postulates something more than mere commission or omission. On the other hand, Non-feasance is the omission to discharge a duty, but the omission to give rise to an action in torts must have one out of malice or bad faith. Hence, Misfeasance, Malfeasance and Non-feasance would only apply in certain cases where either the officers or the State are liable not only for breach of care and duty, it should also be supported by malice or bad faith. In this particular case, even though there was negligence on the part of the State and its Officials in the construction of the Dam, the terms Misfeasance, Malfeasance and Non-Feasance would not be appropriate to fit in this case as they import wider meanings.

Fourthly, The Bench did not consider the ratio of the case of Rylands v. Fletcher but gave preference to the principle developed by American Courts on canal breaks and applied the principle of ‘fault liability, which was also quite evident from the circumstances. Hence, the view of the High Court that the rule of strict liability, which was modified in the case of State of Punjab v. Modern Cultivators, doesn’t apply to the current case. Strict Liability and Faulty Liability don’t go together.

In between Strict Liability and Fault Liability, there might be various other circumstances in which one party is eligible to sue for damages. Even though the dam was being built for the sake of the community, it was an essential function and the use of land or water was not an act of non-natural user. But this doesn’t absolve the State’s responsibility towards its citizens for such violations which result in damage or injuries. The main point of concern is the injury and not how it was caused. If the cause of loss or damage is the failure of duty, either general or specific, the action under Tort Law comes into the limelight.

Hence, the appeal was successful. The court awarded Rs. 1,58,735 along with three interest brackets of 6%, 9%, and 12% up to January 1993.

As per Justice R.M. Sahai, the basic idea of the Law of Torts is founded and based on the moral point that no one has the right to injure or harm someone intentionally or even innocently. Therefore, it would be a mistake on the part of the Court to ignore the negligence of the State and devoid the Appellant of his right of claim of compensation.[6]

In my opinion, the Judgement delivered by the Supreme Court Bench was a legitimate and reasonable one as the negligent act of the State should not be defended and the injury/loss of the common public should not remain uncompensated. If the compensation would not have been granted to the appellant, then it should have been a greater wrong to the appellant.  Everyone should be given fair treatment without any bias, which has been accomplished in this judgement. This judgement is not only a landmark judgement in the field of Torts Law but has also instilled the faith of the common public in the Judicial System of India.

 

 

CONCLUSION

Tort Law is such a branch of the Law Department that is deeply co-related to changes in the socio, political and economic aspects of the Society. In the modern era, it is not only limited to injury and damage, rather it also takes into account defective planning, mistake and discharge of Public duty. The basic duty of care is the foundation stone on which the whole Tort law is based. In a developing country like India, it will be a herculean task for the common man to arrange finances for paying court fees and still being denied justice and compensation just because the state acted negligent while working for the welfare of the society. Hence, Tort law should not be rigidly applied in the cases of negligence, rather, it should be applied flexibly while taking into account the changing nature of society. Tort law is ever-expanding and its orderly growth can be a key factor in better Social development. It will not only result in better and fair judgements but also make the public more confident about their Judicial System.

[1] https://lexpeeps.in/jayalakshmi-salt-works-pvt-ltd-v-state-of-gujrat/

[2] Rylands v Fletcher (1868) LR 3 HL 330

[3] Punjab v. Modern Cultivators 1964 SCR (8) 273

[4] https://legalacharya.com/caseanalysis/jai-laxmi-salt-works-ltd-v-state-of-gujarat-1994-3-scc-492/

[5] https://indiankanoon.org/doc/1503529/

[6] https://www.gktoday.in/topic/what-was-observed-by-justice-k-r-m-sahai-in-the-case-of-jay-laxmi-salt-works-pvt-ltd-v-state-of-gujarat/

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