Supreme Court: In a civil appeal concerning liability arising out of a motor accident involving a bus requisitioned by the State for Gram Panchayat elections, a Division Bench of Sanjay Karol* and Nongmeikapam Kotiswar Singh, JJ., upheld the view that liability to pay compensation would lie with the State authority and not the insurer. The Court held that liability attaches to the authority exercising effective control rather than the registered owner or its insurer.
The Court further distinguished cases involving contractual use of vehicles, emphasizing that requisition is a statutory, non-consensual act. Accordingly, it held that upon requisition, complete control and possession of the vehicle vest in the State, and therefore, the State, having assumed control for public purposes, must bear liability for the accident, and dismissed the appeal.
Background
In a motor accident involving a bus and a motorcycle that resulted in the death of the motorcycle rider, the bus, though owned by a school in Gwalior, had been requisitioned by the appellant for Gram Panchayat election purposes and was under the control of the election authorities at the time of the accident. The legal representatives of the deceased had filed a claim petition before the Motor Accident Claims Tribunal, Gwalior, which had awarded compensation of ₹5,13,500 along with interest at 6% per annum. Aggrieved, both the Insurance Company and the claimants had preferred appeals before the High Court of Madhya Pradesh, where the former had challenged the fastening of liability upon it and the latter had sought enhancement of compensation. By the impugned judgment dated 8th January, 2024, the High Court had allowed both appeals by shifting the liability from the respondent to the appellant and enhancing the compensation to ₹27,01,556. The appellant had thereafter approached the Court assailing the shifting of liability upon it.
Analysis, Law, and Decision
The issue for consideration before the Court was whether the High Court was correct in fastening liability upon the appellant, a State functionary, instead of the respondent, an Insurance Company. The Court noted that it is undisputed that the vehicle in question stands requisitioned by the appellant for Gram Panchayat elections. The Court while referring to the meaning of “requisition” and relying upon National Insurance Co. Ltd. v. Deepa Devi (2008) 1 SCC 414 and Purnya Kala Devi v. State of Assam (2014) 14 SCC 142, clarified that that when a public authority requisitions a privately owned vehicle, the nature of possession and control changes entirely, as the owner is divested of custody and decision-making power and the vehicle is placed at the disposal of the State for governmental functions. It noted that during this period, the owner neither directs its use nor derives any benefit, and therefore, if an untoward incident occurs, responsibility would properly rest with the requisitioning authority and not with the insurer.
The Court emphasized that once requisitioned, the vehicle is operated under official directions, with the authority determining its deployment, purpose, and conditions, while the owner has no say in these matters. It further observed that the insurer’s liability cannot be extended, since the insurance contract is premised on a wholly different footing, covering only ordinary, private or commercial use.
The Court further clarified that requisition is not a voluntary arrangement but a command issued under statutory authority, and the owner is compelled to part with possession; hence, such compelled use cannot reasonably be characterized as regular use within the usual contemplation of the policy and that fastening liability on the insurer would extend the contract beyond the risk that was agreed to be covered and would be unfair, as it would make the insurer liable for a use neither authorized nor controlled by the insured.
When the State steps in, assumes control, and deploys the vehicle, it also assumes the corresponding responsibility, and that the exercise of statutory requisition power carries with it an obligation to answer for the consequences, failing which it would impose upon private parties and their insurers the burden of risks generated exclusively by governmental action.
The Court while rejecting the contention that the insurer would continue to be liable despite it being operated by the authority, distinguished U.P. SRTC v. National Insurance Co. Ltd. 2021 SCC OnLine SC 3278 and U.P. SRTC v. Kulsum (2011) 8 SCC 142 on the ground that in those cases the vehicles operated under an agreement, as opposed to the present case involving a requisition by the authority under a special statute. The Court observed that where a vehicle is requisitioned for public functions and an incident occurs during the period of such requisition, liability ought properly to be borne by the requisitioning authority, and not by the insurer engaged by the owner for the vehicle’s regular and voluntary use.
The Court, further considering the scope of Section 160 of the Representation of the People Act, 1950 observed that while Section 160 grants power to the State to requisition premises and vehicles, it does not expressly contemplate requisition of drivers. In the case at hand, the authority having consciously requisitioned the vehicle along with its driver and utilizing his services, is deemed to have accepted his competence, thereby retaining complete operational control. Viewed thus, the liability rested squarely upon the requisitioning authority.
Finding no infirmity in the impugned judgment, the Court held the appeal to be devoid of merit and dismissed the same accordingly.
[DM and District Election Officer and Collector, Gwalior v. National Insurance Company Ltd., Special Leave Petition (Civil) No.22910 of 2025, decided on 23-3-2026]
*Judgement authored by: Justice Sanjay Karol
Advocates who appeared in this case:
Archana Pathak Dave, senior counsel, amicus curiae