Causal link between motor vehicle use and death is essential to establish liability under Motor Vehicles Act.

On November 29, 2009, the deceased, Anand, left in a vehicle driven by his friend, the appellant Dilip Agarwal. Three days later, Anand’s body was discovered near Binjkot village.

Dilip was initially convicted for murder and conspiracy by the Trial Court, but was subsequently acquitted by the High Court as the "last seen theory" could not be proved.

Parallel to the criminal case, Anand’s wife and children filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 (MVA), alleging that Anand was killed inside Dilip’s vehicle and thus the death arose out of the use of a motor vehicle.

The Tribunal awarded compensation, holding that the dominant intention was not murder and that injuries occurred while in the vehicle; the High Court upheld this and enhanced the compensation.

The court applied Sections 165 and 166 of the Motor Vehicles Act, 1988, regarding compensation for accidents "arising out of the use of motor vehicles".

It relied on Shivaji Dayanu Patil v. Vatschala Uttam More, which interpreted "use" in a wider sense to include stationary vehicles, and Rita Devi v. New India Assurance Co. Ltd., which distinguished "murder simpliciter" (where the dominant intention is to kill) from "accidental murder" (where death occurs in furtherance of another felonious act, like vehicle theft).

The court also applied the principle of "preponderance of probabilities" as the standard of proof in civil/compensation cases, as established in Bimla Devi v. Himachal RTC and N.G. Dastane (Dr) v. S. Dastane.

The Court reasoned that for liability to be fastened under the MVA, there must be a causal relationship—a "causal link"—between the death and the use of the motor vehicle.

While civil cases require a lower standard of proof (preponderance of probabilities) compared to criminal cases, the Court found that even this lighter standard was not met.

The Court noted there was no forensic evidence (blood, skin cells, hair) recovered from the car, nor was there any collision.

Unlike Rita Devi, where the murder was incidental to the theft of the vehicle, the facts here showed no link between the vehicle and the felonious act beyond the mere presence of the deceased in the car three days prior to the body being found.

The Court held that simply because a car was "somehow involved in a chain of circumstances," it does not automatically trigger MVA provisions without a specific link between the car's use and the death.

The Supreme Court set aside the judgments of the Tribunal and the High Court, allowing the appeal; however, in the interest of equity, the Court directed that any compensation already paid to the respondents shall not be recovered.