When the State Takes the Wheel: Supreme Court Pins Accident Liability on Authorities, Not Insurers

In a ruling that clarifies the buck stops with the government when it commandeers private vehicles for public duty, the Supreme Court of India has dismissed an appeal by the District Magistrate of Gwalior, upholding the Madhya Pradesh High Court's decision to shift liability from National Insurance Company Limited to state authorities. Justices Sanjay Karol and Nongmeikapam Kotiswar Singh delivered the judgment on March 23, 2026, in District Magistrate, Gwalior v. National Insurance Company Limited (2026 INSC 279), emphasizing that requisition fundamentally alters control and responsibility.

A Fatal Collision on Election Duty

The tragedy unfolded on January 23, 2010, in Gwalior, Madhya Pradesh, when a bus owned by Kidzee Corner School—requisitioned by the District Magistrate for Gram Panchayat elections—collided with a motorcycle ridden by Rajesh Mandil, killing him instantly. The legal heirs filed Claim No. 25/2010 before the Fifth Additional Motor Accident Claims Tribunal (MACT), Gwalior, which awarded ₹5,13,500 plus 6% interest against the insurer.

Two appeals followed in the Madhya Pradesh High Court: one by the insurer challenging liability, and another by the claimants seeking higher compensation. In its January 8, 2024, order (Misc. Appeal No. 703/2012 et al.), the High Court enhanced the award to ₹27,01,556 but redirected liability to the District Magistrate and Election Officer, reasoning that requisition placed the vehicle under state control. The state appealed via SLP (C) No. 22910/2025, arguing insurance coverage should prevail.

State's Plea: Don't Discourage Public Service

The appellant-District Magistrate contended that the bus was insured, making the insurer liable under the Motor Vehicles Act, 1988. Imposing responsibility on public officials, they argued, would deter authorities from requisitioning vehicles for essential duties like elections, as they lack ownership or insurable interest. Citing U.P. SRTC v. National Insurance Co. Ltd. (2021) and U.P. SRTC v. Kulsum (2011), the state urged that insurers remain on the hook even for government-operated vehicles.

The insurer and claimants countered that requisition—defined as a statutory compulsion under the Representation of the People Act, 1950 (Section 160)—transfers effective possession and control to the state, rendering the private owner blameless.

Decoding Control: Precedents Steer the Verdict

The Court drew heavily from National Insurance Co. Ltd. v. Deepa Devi (2008) 1 SCC 414, where it held that requisitioned vehicles escape the registered owner's control: "Save and except for legal ownership, for all intent and purport, the registered owner of the vehicle loses entire control thereover." Similarly, in Purnya Kala Devi v. State of Assam (2014) 14 SCC 142, a three-judge bench clarified Section 2(30) MV Act's "owner" definition as functional—encompassing those in possession/control, like requisitioning states—over mere registration.

Crucially, the bench distinguished SRTC cases as involving voluntary agreements with state transport firms, not compulsory statutory requisitions. Amicus Curiae Ms. Archana Pathak Dave's reliance on those precedents was rejected, as this case involved a private school bus seized for elections.

The Court also addressed drivers: Though employed by the owner, they operate under state directions during requisition, implicitly endorsing state responsibility.

Key Observations from the Bench

  • On Requisition's Impact : "The owner is divested of custody and decision-making power, and the vehicle is placed at the disposal of the State for governmental functions."

  • Insurer's Limits : "To fasten liability upon the insurer in these circumstances would be to extend the contract beyond the risk that was agreed to be covered... When the State steps in, assumes control, and deploys the vehicle for its own purposes, it assumes with that control the corresponding responsibility."

  • Broader Principle : "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."

These observations, echoed in reports like underscore fairness in risk allocation.

No Reprieve for the State: Appeal Dismissed

"The appeal is bereft of merit" and "dismissed along with any pending applications," the Court held, affirming the High Court's order. Practically, state authorities must now cover the ₹27 lakh-plus award. This precedent fortifies protections for vehicle owners/insurers in compulsory requisitions while urging governments to insure against such risks or hire independently. For future election duties or emergencies, it signals: If you requisition, you respond.