A bench of Justice Ujjal Bhuyan and Justice Atul S Chandurkar held so while dismissing an appeal filed by a claimant, upholding a Madras High Court order which had transferred a claim petition from the Tribunal at Chennai to the Tribunal at Chittoor, Andhra Pradesh, where the accident had actually occurred.

The appellant (claimant) had filed a claim application under Section 166 of the MV Act before the MACT Chennai. The insurer (respondent) objected to the MACT's territorial jurisdiction under Section 166(2) of the Motor Vehicles Act, 1988, contending that no part of cause of action had arisen at Chennai. The MACT, however, rejected the objection, holding that since the insurer also had a business office at Chennai, it did not lack jurisdiction. The insurer subsequently challenged the finding before the Madras High Court under Article 227 of the Constitution, which held that since the accident occurred at Chittoor, only MACT, Chittoor had jurisdiction.

Aggrieved by the Madras High Court's finding, the claimant approached the Supreme Court.

The Supreme Court examined the pleadings and found that the claimant's own claim application undercut his case as in the entire claim application, there was no pleading indicating the manner in which some part of cause of action arose within the territorial limits of the Tribunal at Chennai.

The claimant's address in the claim application was recorded as being in Chittoor, Andhra Pradesh. The accident took place in Tirupati. The Court noted that in his counter affidavit to the insurer's objection, the claimant had only stated that he resided 150 kilometers away from the Chennai Tribunal and that the insurer's head office was at Chennai.

The claimant contended that since the insurer had an office at Chennai, no prejudice was caused to it and its objection to jurisdiction was merely technical. Relying on United India Insurance Co Ltd v Shila Datta & Others, the bench rejected the contention.

The Court further explained that impleading an insurer as a party-responded is not mandatory, it is optional. However, once the insurer is impleaded as a party, rather than being a mere noticee under Section 149(2), its rights change substantially. Quoting the case the bench reiterated that “if the insurer is only a noticee, it can only raise such of those grounds as are permissible in law under section 149(2). But if he is a party respondent, it can raise, not only those grounds which are available under section 149(2), but also all other grounds that are available to a person against whom a claim is made.”

Perusing Section 166(2), the Court explained that a claimant has effectively four options for filing a claim application, such as, at the place where he resides, or the area where the accident occurred, or the claimant carries on business, or within the local limits of the Tribunal where the defendant resides. The Court noted a crucial distinction in the language of the provision that while a claimant may file where he resides or carries on business, the corresponding option for the defendant is confined to where the defendant resides, with no reference to the defendant's place of business. The bench, thus, observed that the place where the defendant carries on business has been specifically omitted while specifying territorial jurisdiction of a Tribunal. It observed as follows:

“A claimant, thus, has three choices as regards the place where an application for compensation under Section 166(1) of the Act of 1988 could be filed. These are (a) at the place where he resides or (b) the area where the accident occurred or (c) the claimant carries on business. Besides these three options, a fourth option is also available to a claimant inasmuch as a claim application can also be filed within the local limits of the Tribunal where the defendant resides. It is pertinent to note that the words used are 'within the local limits of whose jurisdiction the defendant resides'. What has been prescribed is the residence of the defendant and not the place where 'the defendant carries on business'.”

The Court went on to explain the reason for the distinction stating that, “while a claimant can file a claim application also at the place where he carries on business, he may also choose to file it at the place where the defendant resides. The place where the defendant carries on business has been specifically omitted while specifying territorial jurisdiction of a Tribunal.”

The bench also distinguished this from Section 20 of the Code of Civil Procedure, 1908 (CPC), which permits a suit to be filed where the defendant carries on business, noting that Section 166(2) of the Act is distinctly worded and does not carry the same stipulation.

Further, the Court held that the word 'defendant' in Section 166(2) does not include the insurer, since impleadment of the insurer is not mandatory but optional, and in any event Section 168(1) obliges the MACT to issue notice to the insurer independently of impleadment. The bench reasoned that “perhaps one of the reasons for not using the expression 'or carries on business' in Section 166(2) of the Act of 1988, as an insurer is not always expected to be arrayed as a defendant.”

Significantly, the bench has drawn an important distinction between when an objection to territorial jurisdiction is raised before the Tribunal at the original stage, and when it is raised at the appellate stage or after an award has been passed. The Court held:

“In original proceedings of a claim application before the Tribunal, Section 166(2) of the Act of 1988 provides for various options to a claimant to make an application for compensation under Section 166(1). The requirements prescribed in the matter of territorial jurisdiction would, therefore, have to be satisfied. However, when an objection to territorial jurisdiction of the Tribunal is pursued at an appellate stage or at any later stage after the award is passed, the requirements prescribed under Section 21(1) of the Code have to be satisfied.”

Tracing the precedents laid down in Mantoo Sarkar v Oriental Insurance Co Ltd, Malati Sardar v National Insurance Company Limited, and Balveer Batra v The New India Assurance Company, the Court clarified that these cases dealt with objections to territorial jurisdiction raised at the appellate or post-award stage, where Section 21(1) of the CPC requires the objecting party to additionally demonstrate “failure of justice.” However, the Court held that this threshold does not apply where the objection is raised before the MACT at the threshold, before adjudication on merits.

In the present case, the objection was raised before the Tribunal itself before any adjudication on merits. The Court, thus, held that “in the present case, the claimant himself impleaded the insurer as a party to the claim application and it raised an objection to territorial jurisdiction before the Tribunal itself. As the claim application of the claimant awaits adjudication by the Tribunal on merits, the requirements of Section 166(2) of the Act of 1988 have to be satisfied and Section 21(1) of the Code is not attracted.”

In other words, since the claim had not yet reached an award, the claimant could not take shelter under the “no failure of justice” standard that applies to post-award appellate challenges. He had to show that his claim application actually satisfied one of the four options under Section 166(2).

While acknowledging that the MV Act is beneficial legislation meant to redress the hardships of accident victims and must be interpreted keeping that objective in mind, the Court observed that “an interpretation which does not flow from the plain reading of the statutory provisions despite a purposive interpretation cannot be commended. An interpretation that does not find any statutory support cannot be accepted and an interpretation that is in tune with the plain language of the statute ought to be preferred.”

Applying the aforesaid, the Court found that the claimant's own pleadings showed his address to be in Chittoor, and that the accident occurred in Tirupati. It was also noted that there was no averment that he carried on business at Chennai, even the driver of the vehicle with which the accident was met, resided in Chittoor.

“It is, thus, clear that no part of cause of action had arisen within the local limits of District Chennai so as to clothe the Tribunal there with territorial jurisdiction. The error committed by the Tribunal at Chennai in holding that it had territorial jurisdiction was rightly corrected by the High Court by setting aside that order,” the bench held.

In the light of aforesaid, the Supreme Court upheld the Madras High Court's order and directed that the claim application be tried by the MACT at Chittoor.

Case: K Rashik v National Insurance Company Ltd & Anr

Citation : 2026 LiveLaw (SC) 940

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Appearance:

For Appellant: Mr A Sirajudeen, Sr. Adv.; Mr Narender Kumar Verma, AOR; Mr CR Jaya Sukin, Adv.; Ms Yashika Anand, Adv.; Ms Seerat Nissar Bhat, Adv.; Ms Jyoti Zongluju, Adv.; Mr M.dhandapani, Adv.; Mr Roshan Chapagain, Adv.; Mr Abhishek Tyagi, Adv.; Mr Praveen Kumar L., Adv.; Ms Laveena Tak, Adv.

For Respondent: Mr Sanathana Bhaarath, AOR; Mr SL Gupta, Adv