The Supreme Court dismissed the appeal, observing that where a vehicle is under the statutory requisition and control of the state, liability for an accident occurring during such a period lies with the requisitioning authority and not the insurer.
The case arose from an accident dated January 23, 2010, between a bus and a motorcycle, killing the rider of the latter. The bus, though owned by a private school, had been requisitioned by the appellant, District Magistrate, for Gram Panchayat election duty. The Motor Accident Claims Tribunal awarded compensation of Rs. 513,500/- along with 6% interest and fastened liability on the insurer. In appeal, the High Court allowed both appeals and shifted the liability from the insurer to the appellant, enhancing compensation to Rs. 2,701,556/-.
Before the Supreme Court, the appellant submitted that the vehicle was insured and liability ought to remain with the insurer, and fastening liability on public authorities would be erroneous as they do not have either ownership of the vehicle or any insurable interest. However, the respondent supported the impugned judgment.
Hearing the appeal, the bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh noted that the vehicle was undisputedly under requisition and control of the state at the relevant time. Relying on National Insurance Co. Ltd. Vs. Deepa Devi [(2008) 1 SCC 414] and Purnya Kala Devi Vs. State of Assam [(2014) 14 SCC 142], the court held that during requisition, the registered owner loses control over the vehicle and the authority exercising control assumes responsibility and also observed that the concept of owner must be understood in terms of possession and control and not merely legal ownership.
The Court rejected the contention that the insurer should remain liable, distinguishing cases where vehicles are operated under contractual arrangements, and held that requisition under the statutory power stands on a different footing. It further observed that once the state assumes control and deploys the vehicle for public purposes, it must also bear the consequences arising from such use, and liability cannot be shifted to the insurer whose contract covers ordinary use by the owner. The court also noted that though drivers are not expressly requisitioned under statute, their services are effectively utilized by the authorities, and by doing so, the authorities accept responsibility for operation of the vehicle during such period.
Accordingly, the court held that liability stood fastened on the appellant and dismissed the appeal.
Appearance:
For Petitioner- Mr. Siddharth Sharma, Adv. Mr. Shashank Singh, AOR Mr. Ankit Singh, Adv. Mr. Milind Modi, Adv.
For Respondent- Mr. Manu Luv Shalia, Adv. Ms. Manjeet Chawla, AOR Ms. Jyoti, Adv. Mr. Manek Sharma, Adv. Mr. Abid Ali, Adv.
