2026 INSC 736 | 22 July 2026
What the case was about
This judgment examined the limits of liability under the Motor Vehicles Act, 1988. The core issue was whether the family of a deceased passenger is entitled to compensation merely because the victim had travelled in a car before being found dead, or whether the statute demands something more. The Supreme Court held that compensation is not payable simply because a motor vehicle figures somewhere in the narrative of a death. The phrase “arising out of” in Sections 165 and 166 of the Act requires a causal link between the death and the use of the vehicle. Because no such link was established on the facts, the Court set aside the awards passed by the Motor Accident Claims Tribunal and the High Court.
The key facts
On 29 November 2009, Anand got into a car driven by the appellant, Dilip Agarwal, who was his friend. Three days later, on 3 December 2009, Anand was found dead near Binjkot village. His wife, Rajshri Agarwal, lodged FIR No. 963 of 2009 and also filed a claim petition under Section 166 of the Motor Vehicles Act before the Fourth Additional Motor Accident Claims Tribunal, Raigarh, seeking approximately Rs. 26,00,000 in compensation. She alleged that Anand had been killed inside the vehicle.
In the connected criminal proceedings, the Sessions Court convicted Dilip, but the High Court acquitted him, primarily because the prosecution’s “last seen” theory could not be proved. Nevertheless, the Tribunal held that the death was covered under Sections 165 and 166 of the Motor Vehicles Act because Anand’s injuries were inflicted while he was inside the vehicle, and it awarded compensation. The High Court affirmed the award on the same footing. Dilip then filed special leave petitions before the Supreme Court.
The questions before the Court
The bench, comprising Justice Sanjay Karol and Justice Augustine George Masih, framed the matter succinctly: “whether the death of Anand ‘arises out of’ the use of the motor vehicle thereby making Dilip and/or his insurer liable to compensate the respondents?” (para 5). Embedded within this were three specific issues. First, does the phrase “arising out of” require a causal link between the death and the use of the motor vehicle, or is it enough that a vehicle was somehow involved? Second, can a murder ever qualify as an “accident” under the Motor Vehicles Act, and is the distinction between a murder simpliciter and an accidental murder relevant here? Third, even applying the civil standard of preponderance of probabilities, had any causal link between the use of the vehicle and Anand’s death been established?
What the Court decided and why
The Supreme Court allowed the appeals, set aside the awards of the Tribunal and the High Court, and held that no liability arose under the Motor Vehicles Act.
A causal link is mandatory. The Court underscored that liability “cannot be fastened only because of accident and motor vehicle. ‘Arising out of’ is the causal link. Without this, liability falls” (para 8). It surveyed precedents including Shivaji Dayanu Patil v. Vatschala Uttam More and the Australian decision in Government Insurance Office of N.S.W. v. R.J. Green to explain that although “arising out of” calls for a less proximate connection than “caused by,” it still mandates a causal relationship between the injury or death and the vehicle’s use (paras 6–7).
The Rita Devi distinction. The Tribunal had seemingly placed reliance on Rita Devi v. New India Assurance Co. Ltd., where the primary felonious intent was theft of a vehicle and the driver’s murder was an unintended consequence. The Court explained that Rita Devi concerned a situation where the predominant intent was theft, giving rise to a connected death (para 9). It held, however, that “this distinction between primary and secondary felonious act cannot be made in the present case” because what transpired was a “perfectly innocuous set of circumstances”: Anand knew Dilip and sat in his car voluntarily, only to be found dead three days later (para 10). The Court also noted that in the criminal case, “the last seen theory was not proved” (para 10).
No causal link on the evidence. The Court acknowledged that claimants in a motor accident petition need only establish their case on a preponderance of probabilities and need not prove the exact manner in which injuries were sustained (paras 11–12). Even so, it stressed that “simply because there was a car somehow involved in a chain of circumstances that led to his death, the provisions of MV A would apply. Some link whatsoever between the car, and the death has to be established” (para 13). It ultimately concluded: “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” (para 14). Consequently, it held that there could be no liability under the Act and set aside the judgments below. Taking note of the peculiar facts, the Court directed that if any compensation amount had already been paid to the respondents, it “shall not be subjected to any recovery” (para 14).
Why it matters
The decision is an important reminder that compensation under the Motor Vehicles Act is not automatic. A claimant must demonstrate some causal nexus—forensic, direct, or circumstantial—between the death or injury and the use of the vehicle. The ruling also narrows the application of the Rita Devi principle: the doctrine that an unintended death arising from a predominant felonious intent such as vehicle theft may be compensable does not extend to everyday, innocuous circumstances where a passenger voluntarily enters a car and no use of the vehicle is shown to have contributed to the death. For tribunals, insurers, and vehicle owners, the judgment clarifies that “arising out of the use of the motor vehicle” is a substantive threshold, not a formality, and cannot be satisfied by conjecture or the bare mention of a car in the chain of events leading to a death.