Insurance Cover Doesn’t Extend to State-Controlled Use of Vehicle: Supreme Court

The Supreme Court held that an insurer is not liable for accidents caused by a vehicle when it is under requisition by the State for public purposes.

The Court emphasised that during such requisition, control and possession of the vehicle shift entirely to the State authority, and the owner has no say in its use. Relying on earlier precedents, it observed that liability must follow control rather than mere ownership.

Since insurance contracts are based on normal use of the vehicle, they do not cover risks arising from compulsory State use.

Accordingly, the Court held the State authority liable and dismissed the appeal.

[District Magistrate & District Election Officer & Collector, Gwalior (M.P.) v. National Insurance Company Ltd. & Ors.]