The Supreme Court of India has held that statutory liability to award compensation under the Motor Vehicles Act, 1988 cannot be imposed merely because a motor vehicle was somehow involved in a broader chain of circumstances leading to a person’s death or injury. A bench of Justice Sanjay Karol and Justice Augustine George Masih ruled that a distinct causal link between the use of the vehicle and the death or injury must be established. Setting aside the decisions of the Motor Accident Claims Tribunal (MACT) and the High Court that had awarded compensation to the family of a deceased man, the apex court observed that even under the civil standard of preponderance of probabilities, liability cannot fall upon the owner or insurer without proof connecting the death to the vehicle’s use.
Background of the Case
The case originates from an incident on November 29, 2009, when a man named Anand accompanied his friend, Dilip Agarwal (the appellant), in a vehicle driven by Dilip. Three days later, on December 3, 2009, Anand’s dead body was found near Binjkot village under PS Chalradhar Nagar. His wife, Rajshri, lodged FIR No. 963 of 2009 at PS Kotwali, Raigarh. The police filed a criminal chargesheet alleging that three individuals, including Dilip, conspired, kidnapped, killed Anand in a premeditated manner, and disposed of his body.
In the criminal prosecution (Sessions Trial No. 38 of 2010), the trial court convicted Dilip on November 30, 2012, under Sections 365, 302, 201, and 120B of the Indian Penal Code, 1860. However, on November 18, 2015, the High Court acquitted Dilip of all charges, finding that the “last seen theory” relied upon by the prosecution could not be established.
Parallelly, Rajshri and her three children filed Claim Case No. 37 of 2011 under Section 166 of the Motor Vehicles Act, 1988, before the Fourth Additional Motor Accident Claims Tribunal, Raigarh. Seeking compensation of approximately Rs 26,00,000, they alleged that Anand was killed inside Dilip’s vehicle and therefore the vehicle was used in the commission of the offence.
Findings of the Lower Courts
The Tribunal held that while rashness and negligence were not proved, Anand’s death fell within the scope of Sections 165 and 166 of the Motor Vehicles Act. It observed that the dominant intention was not murder, but that the injuries leading to his death were inflicted while inside the vehicle. The Tribunal further noted that Dilip failed to deny the claimants’ version. Consequently, the Tribunal awarded Rs 5,64,000 with 7% interest per annum.
On appeal, the High Court concurred with the Tribunal’s findings and enhanced the total compensation to Rs 8,60,832 with 6% interest on the enhanced amount. Dilip subsequently appealed these orders before the Supreme Court.
Legal Analysis and Judicial Precedents
The Supreme Court framed the central question as whether Anand’s death arose out of the use of the motor vehicle, thereby rendering Dilip or his insurer liable for compensation under the Act.
Analyzing the statutory requirement, the Court stated: “The phrase ‘arising out of’ has to be understood in the context of two other words, ‘accident’ and ‘motor vehicles’.”
Clarifying how liability is triggered under the Act, 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 examined several landmark precedents interpreting the statutory expressions:
- Bruhat Bangalore Mahanagara Palike v. K.K. Umesh Kumar (2026): Addressing a claim where a falling tree branch injured a passenger in a parked autorickshaw.
- Shivaji Dayanu Patil v. Vatschala Uttam More: Holding that “use” has a wider connotation covering stationary or breakdown vehicles, referencing English law in Union of India v. E.B. Aaby’s Rederi A/S and the Australian High Court decision in Government Insurance Office of N.S.W. v. R.J. Green (opinions of Lord Barwick C.J. and Windeyer J.).
- National Insurance Co. Ltd. v. Swaran Singh (2004): Noting that a victim’s right to claim statutory compensation arises from unforeseen situations where harm is suffered due to others’ wrongdoing.
- Rita Devi v. New India Assurance Co. Ltd. (2000): Differentiating between murder simpliciter and accidental murder. Quoting from the decision, the Court noted: “The difference between a ‘murder’ which is not an accident and a ‘murder’ which is an accident, depends on the proximity of the cause of such murder. In our opinion, if the dominant intention of the Act of felony is to kill any particular person then such killing is not an accidental murder but is a murder simpliciter, while if the cause of murder or act of murder was originally not intended and the same was caused in furtherance of any other felonious act then such murder is an accidental murder.”
Addressing the standard of proof, the bench recognized that civil claim petitions under Section 166 of the Motor Vehicles Act are governed by the “preponderance of probabilities” standard rather than proof beyond reasonable doubt, as reiterated in ICICI Lombard General Insurance Co. Ltd. v. Rajani Sahoo (2025) (referencing Mathew Alexander v. Mohd. Shafi, N.K.V. Bros. (P) Ltd. v. M. Karumai Ammal, Bimla Devi v. Himachal RTC, and Dulcina Fernandes v. Joaquim Xavier Cruz), and detailed in N.G. Dastane (Dr) v. S. Dastane (1975) (referencing Dixon J. in Wright v. Wright and Lord Denning in Blyth v. Blyth).
However, the Supreme Court stressed that even under the lighter civil standard, no causal link was established in the present case.
Evaluating the reasoning of the lower courts, the apex court observed: “A perusal of the judgments of the Courts below in a sense assume that the injuries suffered by the deceased took place while Dilip and Anand were in the car. How such a conclusion came about, is best known to them. The evidence-on-record does not point to any forensic proof having been recovered from the car for example blood, skin cells, hair etc. Neither it is anybody’s case that Dilip’s car is involved in any collision.”
The Court emphasized: “Now true it is that the claimants need not establish the particular manner in which injuries have been sustained by the injured or the deceased but that does not mean that simply because there was a car somehow involved in a chain of circumstances that led to his death, the provisions of MVA would apply. Some link whatsoever between the car, and the death has to be established.”
Decision of the Court
Concluding its analysis, the bench ruled: “Pursuant to the aforesaid discussion, there is an alleged accidental murder and there is a motor vehicle, but the relationship between the two specifically involving a motor vehicle has not been established. There cannot be, consequently, any liability under the MVA.”
The Supreme Court allowed the appeals and set aside the judgments of the Tribunal and the High Court. Considering the peculiar facts of the case, the Court directed that any compensation amount already paid to the respondents shall not be recovered.
Case Details
Case Title: Dilip Agarwal v. Rajshri Agarwal & Ors.
Case No.: Civil Appeal Nos. of 2026 (Arising out of SLP(C) Nos. 9002-03 of 2026)
Bench: Justice Sanjay Karol and Justice Augustine George Masih
Date: July 22, 2026
