The Supreme Court has ruled that compensation under the Motor Vehicles Act cannot be granted merely because a motor vehicle was connected to a chain of events leading to a person's death. The Court held that claimants must establish a clear causal connection between the use of the vehicle and the death before liability under the Act can arise.
A Bench of Justice Sanjay Karol and Justice Augustine George Masih allowed the appeals filed by Dilip Agarwal, setting aside the orders of the Motor Accident Claims Tribunal (MACT) and the High Court that had awarded compensation to the deceased's family.
Background of the Case
The dispute arose from the death of Anand, who was last seen travelling in a vehicle driven by Dilip Agarwal on November 29, 2009. Three days later, Anand's body was found near Binjkot village in Chhattisgarh. Following an FIR lodged by Anand's wife, Rajshri Agarwal, a criminal investigation was initiated.
A charge sheet alleged that Anand had been kidnapped and killed as part of a criminal conspiracy. However, while the trial court had convicted Dilip Agarwal, the High Court later acquitted him after finding that the prosecution had failed to prove the "last seen" circumstance relied upon in the criminal case.
Separately, Anand's wife and children filed a compensation claim before the MACT under the Motor Vehicles Act, arguing that since the vehicle had allegedly been used during the incident, compensation was payable. The Tribunal awarded over ₹5.64 lakh with interest, and the High Court later enhanced the amount to ₹8.60 lakh.
Court's Observations
The Supreme Court clarified that while the phrase "arising out of the use of a motor vehicle" has a broad meaning under the Motor Vehicles Act, there must still be a real connection between the vehicle and the injury or death.
The Bench observed:
“Liability under this Act cannot be fastened only because of accident and motor vehicle. ‘Arising out of’ is the causal link. Without this, liability falls.”
The Court also explained that although claim petitions are decided on the preponderance of probabilities rather than the stricter criminal standard of proof, even that lower threshold was not satisfied in the present case.
The judges noted that there was no forensic material connecting the vehicle with the injuries suffered by Anand. There was no allegation that the vehicle had met with any collision, nor was there evidence such as blood, hair, skin cells or any other material linking the car to the death.
“The evidence-on-record does not point to any forensic proof having been recovered from the car,” the Bench observed while concluding that the necessary causal relationship had not been established.
Decision
Allowing the appeals, the Supreme Court held that although there was an alleged unlawful killing and a motor vehicle figured somewhere in the factual background, the legal requirement of proving that the death arose out of the use of the motor vehicle had not been established.
Accordingly, the Court set aside the judgments of the MACT and the High Court. At the same time, considering the peculiar facts of the case, it directed that any compensation already paid to the claimants should not be recovered from them.
Case Details
Case Title: Dilip Agarwal v. Rajshri Agarwal & Ors.
Case Number: Civil Appeal Nos. of 2026 (Arising out of SLP (C) Nos. 9002–03 of 2026)
Judges: Justice Sanjay Karol and Justice Augustine George Masih
Decision Date: July 22, 2026
