JUDGMENT

R. M. SAHAI, J. - This appeal by grant of certificate under Article 133(1)(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 Article 36 of the limitation Act, 1908 (Ed. : Now covered by Art. 113 of Limitation Act, 1963) (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 Article 36 could apply to rule laid down in Rylands v. Fletcher (LR (1868) 3 HL 330 : 37 LJ Ex 161 : [1861-73] All ER Rep 1) raises a question of general importance which required to be authoritatively decided by this Court.

2. The certificate granted by the high Court under Article 133(1)(a) of the Constitution was in following terms :

"The main question involved is that of limitation and whether the rule in Rylands v. Fletcher (LR (1868) 3 HL 330 : 37 LJ Ex 161 : [1861-73] All ER Rep 1), would result in invoking the provisions of Article 36 of the old Limitation Act or whether Article 39 of the Act would be the appropriate Article or whether the residuary Article 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 Article 133(1)(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 appellants factory which was existing from before led to increased flow and discharge of water on appellants 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 appellants 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 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 on 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 may defences raised the two main were that there was no negligence either in the construction of the bundh or