Supreme Court Holds State Liable for Motor Accident When Vehicle is Requisitioned for Public Purpose, Not Insurer

Case Name: District Magistrate and District Election Officer and Collector, Gwalior, M.P. v. National Insurance Company Limited and Others
Citation: 2026 INSC 279
Date of Judgment/Order: 23 March 2026
Bench: Hon’ble Mr. Justice Sanjay Karol; Hon’ble Mr. Justice Nongmeikapam Kotiswar Singh

Held: The Supreme Court held that when a vehicle is requisitioned by the State for public purposes, the effective control and possession shift to the State authority, and consequently, liability for any accident occurring during such period rests with the requisitioning authority and not with the insurer of the registered owner, as the insurance contract does not extend to such compelled governmental use.

Summary: The case arose from a motor accident involving a bus requisitioned by election authorities for Gram Panchayat elections, which resulted in the death of a motorcyclist. The Motor Accident Claims Tribunal initially fastened liability on the insurer, but the High Court shifted liability to the District Magistrate, being the requisitioning authority, while also enhancing compensation. The State challenged this finding, contending that since the vehicle was insured, liability should remain with the insurer and that imposing liability on public authorities would be inappropriate. The Supreme Court examined the legal effect of requisition under statutory authority and relied on precedents including National Insurance Co. Ltd. v. Deepa Devi and Purnya Kala Devi v. State of Assam. It held that requisition divests the owner of control and vests operational command with the State, thereby making the State the de facto “owner” for liability purposes. The Court distinguished cases involving contractual arrangements from statutory requisition and emphasized that insurance policies cover ordinary use by the owner, not compelled deployment under State control. It further noted that when the State exercises statutory power to requisition property, it must also bear responsibility for consequences arising from such use.

Decision: The Supreme Court dismissed the appeal and upheld the High Court’s finding fastening liability on the State authority, confirming that compensation shall be borne by the requisitioning authority and not the insurer, and disposed of all pending applications accordingly.