State Requisition of Vehicles and Insurance Liability: Supreme Court Draws the Line

The question of liability in motor accident cases becomes legally complex when a privately owned vehicle is requisitioned by the State for public purposes. The Supreme Court of India, in its 2026 judgment in District Magistrate and District Election Officer and Collector, Gwalior, M.P. v. National Insurance Company Limited & Ors., has provided a definitive answer to this issue. The Court clarified that when a vehicle is requisitioned under statutory authority, the liability for accidents arising during such requisition lies with the State authority, and not with the private insurer of the vehicle.

This ruling is significant as it delineates the boundaries between private contractual liability and public law responsibility, particularly in the context of elections, emergency duties, and other governmental functions.

Factual Background

The case arose from a tragic road accident that occurred on 23 January 2010 involving a bus and a motorcycle, resulting in the death of the motorcyclist. The bus, though owned by a private entity (Kidzee Corner School, Gwalior), had been requisitioned by the District Magistrate for Gram Panchayat election duties.

The Motor Accident Claims Tribunal (MACT) awarded compensation of ₹5,13,500 to the legal representatives of the deceased. On appeal, the Madhya Pradesh High Court enhanced the compensation to ₹27,01,556 and shifted liability from the insurance company to the State authority.

The State challenged this shift of liability before the Supreme Court, arguing that the vehicle was insured and hence the insurer should bear the liability.

Issue

• Whether liability for compensation in a motor accident involving a requisitioned vehicle lies with the insurer or with the State authority that requisitioned the vehicle.

Concept of Requisition

The Court began by analysing the concept of “requisition.” It noted that requisition is not a voluntary arrangement but a statutory command compelling the owner to surrender possession of property for public use.

In such situations:

• The owner loses control over the vehicle.
• The vehicle is used exclusively for governmental purposes.
• State authorities determine the deployment, timing, and manner of use.

Thus, requisition fundamentally alters the nature of possession and control.

Judicial Precedents

1. National Insurance Co. Ltd. v. Deepa Devi (2008)

The Court relied heavily on this precedent, which held that when a vehicle is requisitioned, the registered owner loses effective control. The State assumes operational authority, and the owner cannot regulate how the vehicle is used.

This case introduced a pragmatic interpretation; when statutory definitions fail to address such situations, courts must adopt a “common sense approach.”

2. Purnya Kala Devi v. State of Assam (2014)

The Court reiterated that the concept of “owner” under the Motor Vehicles Act should not be confined to registered ownership. Instead, control and possession are decisive factors.

Where the State has requisitioned a vehicle and exercises control, it effectively becomes the “owner” for liability purposes.

Supreme Court’s Analysis

1. Shift in Control Determines Liability

The Court emphasised that liability must follow control. Once the State requisitions a vehicle:

• The owner is divested of control.
• The State determines its use.
• The vehicle is deployed for public purposes.

Therefore, any accident occurring during this period is attributable to the authority exercising control.

2. Insurance Contract and Its Limits

The Court drew a crucial distinction between ordinary use and compelled use:

• Insurance policies are based on risks associated with normal, voluntary use of the vehicle.
• Requisitioned use falls outside this framework.
• The Court observed that extending liability to insurers in such cases would unfairly expand contractual obligations beyond what was agreed.

Thus, insurers cannot be made liable for risks arising out of State-imposed use.

3. Public Law Responsibility

The Court held that when the State exercises statutory power to requisition private property, it must also bear the consequences arising from such use.

This principle is rooted in fairness:

• The owner is compelled to surrender the vehicle.
• The State benefits from its use.
• Therefore, the State must assume liability for risks created during that period.

4. Distinction from Contractual Arrangements

The Court distinguished earlier judgments, such as U.P. SRTC v. National Insurance Co. Ltd. and U.P. SRTC v. Kulsum, in which liability was imposed on insurers.

In those cases:

• Vehicles were operated under contractual agreements.
• The arrangement was voluntary.

In contrast, requisition involves statutory compulsion, making it fundamentally different.

5. Role of the Driver

An interesting aspect addressed by the Court was the role of the driver. Although Section 160 of the Representation of the People Act, 1950, allows requisition of vehicles, it does not explicitly provide for requisition of drivers.

However, in practice:

• Vehicles are often taken along with drivers.
• The State implicitly accepts the driver’s competence.

Thus, the Court held that even the acts of the driver, during requisition, are attributable to the State.

Final Holding

The Supreme Court upheld the High Court’s decision and ruled:

• Liability lies with the requisitioning authority (State).
• The insurer is not liable for accidents occurring during requisition.
• The appeal by the State was dismissed.

Conclusion

The Supreme Court’s ruling marks a significant development in Indian motor accident jurisprudence. By holding that liability rests with the State when a vehicle is requisitioned, the Court has reaffirmed a fundamental legal principle: responsibility must follow control.

The decision strikes a balance between private rights and public functions, ensuring that individuals and insurers are not unfairly burdened with risks arising from governmental actions. At the same time, it reinforces the accountability of the State in exercising its statutory powers.

In essence, the judgment draws a clear and principled line; when the State steps into control, it must also step into liability.

Important Link

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