Facts
Rajshri Agarwal, wife of the deceased Anand, filed a claim under S.166 MVA seeking compensation on the allegation that Anand was kidnapped, murdered, and his body disposed of after travelling in the appellant Dilip Agarwal's car. Dilip was initially convicted under S.365, S.302, S.201 and S.120B IPC, but was acquitted by the High Court as the prosecution failed to prove the "last seen" theory. Despite the acquittal, the MACT awarded compensation, holding that Anand's death arose out of the use of the vehicle. The High Court affirmed the award with enhancement. The appellant challenged these findings before the Supreme Court.
Issues Framed
Whether the death of Anand "arises out of" the use of the motor vehicle, thereby making the owner and insurer liable under the Motor Vehicles Act, 1988.
Court's Reasoning
(a) Legal Rule
The Court reiterated that the expression "arising out of" is wider than "caused by", but it nevertheless requires a causal relationship between the use of the vehicle and the injury. Liability under the MVA cannot arise merely because an accident and a motor vehicle are involved; the vehicle must have a causal connection with the injury or death.
(b) Precedents Relied Upon
The Court relied upon Bruhat Bangalore Mahanagara Palike v. K.K. Umesh Kumar, Shivaji Dayanu Patil v. Vatschala Uttam More, National Insurance Co. Ltd. v. Swaran Singh, Rita Devi v. New India Assurance Co. Ltd., ICICI Lombard General Insurance Co. Ltd. v. Rajani Sahoo, Mathew Alexander v. Mohd. Shafi, and N.G. Dastane (Dr) v. S. Dastane to explain the scope of "arising out of", the distinction between criminal and civil standards of proof, and the doctrine of preponderance of probabilities.
(c) Application to Facts
The Court held that even on the civil standard of preponderance of probabilities, the respondents failed to establish any causal nexus between Anand's death and the use of Dilip's vehicle. There was no forensic evidence linking the vehicle to the injuries, no evidence of collision, and nothing to show that the injuries were sustained inside the vehicle. The courts below had merely assumed that the injuries occurred in the car without evidentiary basis. Simply because the car formed part of the sequence of events leading to Anand's disappearance did not attract liability under the MVA. (Paras 13–14)
(d) Treatment of Counterarguments
The Court accepted that claimants in motor accident claims need not prove the precise manner of the accident and that civil proceedings are governed by the standard of preponderance of probabilities. Nevertheless, it held that this relaxed standard does not dispense with the requirement of proving some causal link between the vehicle and the death.
Held
The Supreme Court set aside the judgments of the MACT and the High Court, holding that the respondents failed to establish that Anand's death arose out of the use of the motor vehicle. Consequently, no liability arose under the Motor Vehicles Act, 1988. However, the Court directed that compensation already paid should not be recovered from the respondents.
Relevant Para
Para 13
"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."
"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."
Case Details
Citation: 2026 INSC 736
Decided on: 22 July 2026
Case Title: Dilip Agarwal v. Rajshri Agarwal & Ors.
Court: Supreme Court of India
Bench: Sanjay Karol, J.; Augustine George Masih, J.