The Supreme Court today (16.09.2026) has held that while Section 166(2) of the Motor Vehicles Act, 1988 permits a claimant to file a compensation claim at a place where he himself “carries on business,” the same expression does not extend to the insurer, and an insurer company cannot be treated as a defendant for the purpose of conferring territorial jurisdiction merely because it carries on business at that place.

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 held that the Motor Accidents Claim Tribunal (MACT), Chennai lacked territorial jurisdiction to entertain his claim petition, since neither the accident nor his residence fell within its jurisdiction.

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), 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.

Before the Supreme Court, Senior Advocate A Sirajudeen argued for the claimant that since he resided and worked at Chennai, the MACT Chennai had jurisdiction under Section 166(2), and that being a beneficial legislation, the Act ought to be interpreted to protect claimants' interests. It was submitted that the respondent's objection was merely technical, particularly since it also had an office at Chennai, relying on a Calcutta High Court decision in National Insurance Co Ltd v Alpana Jana.

On the contrary, the respondent submitted that the accident occurred at Tirupati and the claimant's own address in the claim petition showed he resided at Chittoor, so no part of the cause of action arose at Chennai, and the objection could not be brushed aside as merely technical.

Rejecting the claimant's argument that the insurer had no locus to raise the objection since it also had an office at Chennai, the Supreme Court held that impleadment of an insurer as a defendant in a claim petition is optional, but once impleaded as a party-respondent, the insurer is entitled to raise all grounds available to any contesting defendant.

Relying on United India Insurance Co Ltd v Shila Datta & Others, the bench reiterated that “when a statutory notice is issued under section 149(2) by the tribunal, it is clear that such notice is issued not to implead the insurer as a party-respondent but merely to put it on notice that a claim has been made in regard to a policy issued by it and that it will have to bear the liability as and when an award is made in regard to such claim. Therefore, it cannot, as of right, require that it should be impleaded as a party-respondent. But it can however be made a party-respondent either by the claimants voluntarily in the claim petition or by the direction of the Tribunal under section 170 of the Act. Whatever be the reason or ground for the insurer being impleaded as a party, once it is a party-respondent, it can raise all contentions that are available to resist the claim.”

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.”

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.”

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.

“The stage at which an objection based on lack of territorial jurisdiction is being considered is, therefore, relevant. If the same is raised before the Tribunal at an initial stage of the proceedings, as in the present case, the provisions of Section 166(2) of the Act of 1988 would guide the Tribunal in the matter. If such objection is considered post award at an appellate stage, the threshold required would be to demonstrate failure of justice by virtue of the Tribunal exercising jurisdiction despite absence of territorial authority to do so,” the bench observed.

It, 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.”

With regards to the present case, the Court noted 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.

The Court held that “the appellant filed a claim application under Section 166 of the Motor Vehicles Act, 19882 before the Motor Accidents Claims Tribunal, Chennai. The first respondent, National Insurance Company Limited on being served with the claim application raised an objection to the territorial jurisdiction of the Tribunal at Chennai. According to it, no part of cause of action had arisen within the jurisdiction of the Tribunal at Chennai and in view of Section 166(2) of the Act of 1988, the said Tribunal had no territorial jurisdiction.”

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.”

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

Click here to read the judgment

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