Court case(1994) 4 SCC 1

The State of Gujarat constructed a reclamation bund (an earthen embankment) to reclaim land from the sea, close to the appellant company's salt works. The bund was built without adequate outlets for the rain water that would collect behind it. In a season of heavy rain the water accumulated, could not drain, the bund gave way and the salt works on the other side were flooded and destroyed. The company sued the State for the loss. The High Court accepted that the State had been negligent but dismissed the suit as time-barred, treating it as a claim for "malfeasance, misfeasance or nonfeasance" under the short limitation article and counting time from the construction of the bund.

Sahai J. allowed the appeal. The State, in constructing the bund, owed a duty of care to the neighbouring owners to foresee and guard against the consequences of blocking the natural drainage of water; the failure to provide adequate outlets was a breach of that duty, and the damage was its direct result. The Court treated the matter as an ordinary case of negligence by a public authority, which could not shelter behind any immunity for a public work. On limitation it held that the suit was within time: the claim was one for damage caused by negligence, to which the short article for "malfeasance, misfeasance or nonfeasance" did not apply, and in such a tort the cause of action is complete only when the damage results, not when the negligent act is done. The judgment discusses the nature of negligence as a tort, the classification of wrongs as malfeasance, misfeasance and nonfeasance, and the growing willingness of the law to make the State answerable for its negligence.