In a significant ruling, the Supreme Court of India has clarified who bears responsibility when a privately owned vehicle, requisitioned for public duty, is involved in an accident. The Court held that liability lies with the State authority that had taken control of the vehicle not the insurance company.
Background of the Case
The case arose from a fatal road accident on January 23, 2010, in Gwalior, where a bus collided with a motorcycle, resulting in the rider’s death. The bus belonged to a private school but had been requisitioned by district authorities for Gram Panchayat election duties.
Following the incident, the victim’s family approached the Motor Accident Claims Tribunal, which awarded compensation of ₹5.13 lakh with interest. However, the matter escalated when both the insurance company and the victim’s family challenged the ruling before the Madhya Pradesh High Court.
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The High Court not only enhanced the compensation to over ₹27 lakh but also shifted liability from the insurer to the District Magistrate and election authorities.
Hearing the appeal, a bench led by Justice Sanjay Karol examined whether the High Court was correct in fastening liability on the State authority.
The Court emphasized a key legal principle: control determines responsibility.
It noted that once a vehicle is requisitioned under statutory powers, the original owner effectively loses control over its use. The State authority decides how, when, and where the vehicle is operated.
“The owner has no say in the manner of deployment once the vehicle is requisitioned,” the bench observed, underlining that legal responsibility must follow actual control of the vehicle.
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The Court relied on earlier precedents, including National Insurance Co. Ltd. v. Deepa Devi, to reinforce that when a vehicle is under State control, the definition of “owner” extends to the authority in possession and control.
Rejecting the appellant’s argument, the Court clarified that insurance policies are designed to cover ordinary, private, or commercial use of a vehicle not its compulsory deployment for government purposes.
“The insurer assesses risk based on normal use. When the State assumes control for its own functions, it also assumes responsibility,” the bench explained.
It further distinguished cases where vehicles are used under contractual arrangements, noting that requisition is not voluntary but a statutory command.
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Concluding that the High Court’s findings were legally sound, the Supreme Court dismissed the appeal filed by the District Magistrate and election authorities.
The Court held that since the bus was under the control of State authorities during election duty, liability for compensation rightly rests with the requisitioning authority, and not the insurance company.
Case Title: District Magistrate & District Election Officer & Collector, Gwalior v. National Insurance Company Ltd. & Ors.
Case Number: Civil Appeal arising out of SLP (C) No. 22910 of 2025
Judge: Justice Sanjay Karol, Justice Nongmeikapam Kotiswar Singh
Decision Date: March 23, 2026
