Motor Vehicles Act: Supreme Court Clarifies Causal Link Required Between Vehicle And Death For Compensation

The Supreme Court has held that where a person is allegedly murdered and a motor vehicle is only incidentally involved, compensation cannot be awarded under the Motor Vehicles Act (MVA) unless there is a clear causal link between the vehicle and the death.

A Bench of Justices Sanjay Karol and Augustine George Masih allowed an appeal filed by Dilip Agarwal, setting aside the orders of the Motor Accident Claims Tribunal (MACT) and the Bombay High Court, which had held him and his insurer liable to pay Rs 8,60,832 with 6% interest to the deceased's wife.

"What is to be understood in the facts of this case is the causal relationship between the death and the motor vehicle," the Bench said.

What was the case?

According to the facts, Anand got into a vehicle driven by his friend, Dilip Agarwal, on November 29, 2009. Three days later, on December 3, 2009, his body was found near Binjkot village under PS Chalradhar Nagar.

Anand's wife, Rajshri Agarwal, lodged FIR No. 963 at PS Kotwali, District Raigarh.

The charge sheet alleged that three accused persons, acting in furtherance of a conspiracy, kidnapped Anand, murdered him in a premeditated manner and disposed of his body.

Rajshri and her three children then filed a claim petition seeking around Rs 26 lakh in compensation, alleging that Anand had been killed inside Dilip's vehicle and that the vehicle had been used in the commission of the offence.

In the criminal trial, Dilip was convicted under Sections 365, 302, 201 and 120B of the Indian Penal Code [corresponding to Sections 140, 103, 238 and 61 of the Bharatiya Nyaya Sanhita (BNS)]. However, the high court later acquitted him on November 18, 2015, primarily because the prosecution failed to prove the "last seen" theory on which its case rested.

Why did the MACT and high court award compensation?

Although the tribunal found that rashness and negligence had not been proved, it held that Anand's death was covered under Sections 165 and 166 of the Motor Vehicles Act.

It reasoned that the dominant intention was not to murder Anand and that the injuries leading to his death were inflicted while he was inside the vehicle. The tribunal also observed that Dilip had failed to specifically deny the claimants' version of events and therefore accepted their account. It awarded Rs 5,64,000 with 7% interest.

The Bombay High Court agreed with the tribunal's findings and enhanced the compensation.

What did the Supreme Court say about 'arising out of' the use of a motor vehicle?

The principal question before the Supreme Court was whether Anand's death "arose out of" the use of the motor vehicle so as to make Dilip and his insurer liable under the Motor Vehicles Act.

The Bench referred to its recent decision in Bruhat Bangalore Mahanagara Palike v. K K Umesh Kumar (2026), which discussed the meaning of the expression "arising out of" while dealing with the injury of an autorickshaw passenger caused by a falling tree branch.

Court reiterated that the phrase must be understood in the context of the words "accident" and "motor vehicle".

"Accidents which may be of the varieties must arise out of use of motor vehicle. Liability under this Act cannot be fastened only because of accident and motor vehicle. 'Arising out of' is the causal link. Without this, liability falls," the Bench said.

Why did the Supreme Court reject the compensation claim?

Examining the facts, Court held that no causal relationship had been established between Anand's death and the use of the vehicle.

It noted that Anand had voluntarily travelled with Dilip, whom he knew, and was found dead only three days later. The criminal court had already held that the prosecution failed to prove the "last seen" theory, which the Supreme Court described as a weak piece of evidence.

The Bench acknowledged that while civil proceedings require proof on the standard of preponderance of probabilities rather than proof beyond reasonable doubt, even that lower standard had not been met in the present case.

"We are of the view that even on this lighter standard, there is no causal link that has been established. A perusal of the judgments of the courts below in a sense assume that the injuries suffered by the deceased took place while Dilip and Anand were in the car. How such a conclusion came about, is best known to them," the Bench observed.

Court also pointed out that there was no forensic evidence recovered from the vehicle, such as blood, skin cells or hair, linking the car to the alleged murder.

Further, it was not the case of any party that the vehicle had met with a collision or accident. The only evidence was that Anand had suffered injuries caused by hard and blunt objects.

Court clarified that while claimants are not required to establish the exact manner in which injuries were sustained, they must still prove some connection between the use of the vehicle and the death.

"Now true it is that the claimants need not establish the particular manner in which injuries have been sustained by the injured or the deceased but that does not mean that simply because there was a car somehow involved in a chain of circumstances that led to his death, the provisions of MVA would apply. Some link whatsoever between the car, and the death has to be established," the Bench said.

Holding that the case involved an alleged murder and a motor vehicle, but no proven causal relationship between the two, Court concluded: "There cannot be, consequently, any liability under the MVA."

Accordingly, it set aside the judgments of the tribunal and the Bombay High Court.

However, considering the peculiar facts of the case, Court directed that any compensation already paid to the claimants would not be recovered.

Case Title: Dilip Agarwal Vs Rajshri Agarwal & Ors.

Bench: Justices Sanjay Karol and Augustine George Masih

Date of Judgment: July 22, 2026