The Supreme Court has held that the place where an insurance company carries on business does not, by itself, confer territorial jurisdiction on a Motor Accidents Claims Tribunal (MACT) under Section 166(2) of the Motor Vehicles Act, 1988. A bench of Justice Ujjal Bhuyan and Justice Atul S. Chandurkar upheld the Madras High Court’s decision transferring a motor accident claim from Chennai to Chittoor, finding that none of the statutory grounds for filing the claim in Chennai was satisfied.
The Court explained that while Section 166(2) expressly permits a claimant to approach the Tribunal where the claimant “resides or carries on business”, the provision uses only the expression “where the defendant resides” while dealing with a defendant. It does not extend jurisdiction to a place where the defendant merely carries on business.
Background
The case arose from an accident on October 25, 2022, when the appellant was riding a two-wheeler with his brother and a mini truck driven by the second respondent hit the vehicle at Thatimaakulapalli Cross Road in District Tirupati, Andhra Pradesh. The appellant received treatment at a hospital in Tirupati, and his brother subsequently lodged an FIR at Yerravaripalem Police Station.
The appellant filed a compensation claim under Section 166 of the Motor Vehicles Act before the MACT in Chennai. National Insurance Company Limited objected to its territorial jurisdiction, arguing that no part of the cause of action had arisen in Chennai.
On July 11, 2025, the Tribunal rejected the objection on the ground that the insurer also carried on business in Chennai. The insurer challenged that order before the Madras High Court under Article 227 of the Constitution.
On March 16, 2026, the High Court held that the Chennai Tribunal lacked territorial jurisdiction and directed that the proceedings be transferred to the Tribunal at Chittoor. The claimant then approached the Supreme Court.
Arguments Before the Supreme Court
Senior Advocate A. Sirajudeen, appearing for the claimant, argued that the claimant was residing and working in Chennai and was therefore entitled to institute the proceedings there under Section 166(2). He also contended that the Motor Vehicles Act is beneficial legislation and should be interpreted in a manner protecting claimants. Since the insurer had an office in Chennai, it was argued that deciding the claim there would cause it no prejudice. Reliance was placed on the Calcutta High Court’s decision in National Insurance Co. Ltd. v. Alpana Jana & Others.
Counsel for the insurer, S.L. Gupta, countered that the accident occurred in Tirupati and the claimant’s own address in the claim petition showed that he resided in Chittoor district. He argued that no part of the cause of action arose in Chennai and that the jurisdictional objection could not be dismissed as merely technical.
Insurer Can Raise Territorial Jurisdiction Objection
The Supreme Court rejected the contention that the insurer could not question territorial jurisdiction merely because it had an office in Chennai.
Referring to the three-judge bench decision in United India Insurance Co. Ltd. v. Shila Datta & Others, the Court noted that impleading an insurer as a defendant in a Section 166 claim is not mandatory. However, once the claimant chooses to implead the insurer as a party-respondent, the insurer can contest the proceedings on all grounds legally available to it.
The Court consequently held that an insurer impleaded by the claimant can raise an objection to the Tribunal’s territorial jurisdiction.
Where Can a Motor Accident Claim Be Filed?
Interpreting Section 166(2), the Supreme Court said the provision gives a claimant different choices regarding where a compensation application may be instituted. A claim can be filed before the Tribunal having jurisdiction over the area where the accident occurred, where the claimant resides, where the claimant carries on business, or where the defendant resides.
The Court drew particular attention to the distinction made by Parliament between the claimant and the defendant. For a claimant, the statute refers to both residence and the place where business is carried on. In the case of a defendant, however, it refers only to residence.
“The place where the defendant carries on business has been specifically omitted while specifying territorial jurisdiction of a Tribunal.”
The Court also distinguished Section 166(2) from Section 20 of the Code of Civil Procedure, 1908, under which the place where a defendant carries on business can be relevant for determining territorial jurisdiction.
Insurer Not ‘Defendant’ for This Purpose
The Supreme Court further held that the expression “defendant resides” in Section 166(2) does not intend to refer to the insurer as a defendant. It noted that an insurer’s impleadment in a motor accident claim is optional, while the principal contesting defendant would ordinarily be the owner and/or driver of the offending vehicle, among others.
Objection Before Tribunal Different From Post-Award Challenge
The Court also explained the distinction between an objection raised at the initial stage and one pursued after an award.
Where territorial jurisdiction is questioned before the Tribunal at the outset, the requirements of Section 166(2) must be satisfied. If the objection is pursued at the appellate stage after an award, Section 21(1) CPC requires the objecting party to also demonstrate a failure of justice resulting from the lack of territorial jurisdiction.
The Court discussed its earlier decisions in Mantoo Sarkar v. Oriental Insurance Co. Ltd. and Others, Malati Sardar v. National Insurance Company Limited and Others, and Balveer Batra v. The New India Assurance Company and Another. It noted that in those cases the territorial jurisdiction issue was considered at the appellate stage, bringing Section 21(1) CPC into play.
In the present case, however, the insurer had objected before the Tribunal itself and the compensation claim had not yet been adjudicated on merits. The Court therefore held that Section 166(2), rather than the post-award threshold under Section 21(1) CPC, governed the issue.
No Basis for Chennai Tribunal’s Jurisdiction
Examining the pleadings, the Supreme Court found that the claimant had given his residence as Chittoor, the accident occurred in Tirupati district, and there was no pleading that he carried on business elsewhere. The offending vehicle’s driver was also stated to reside in Chittoor district.
The Court therefore found no basis under Section 166(2) for the Chennai Tribunal to exercise jurisdiction.
While acknowledging the beneficial character of the Motor Vehicles Act, the bench said:
“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.”
Decision
The Supreme Court upheld the Madras High Court’s March 16, 2026 order and affirmed the direction transferring the entire proceedings from the Chennai Tribunal to the Tribunal at Chittoor.
It directed the Chittoor Tribunal to decide the compensation claim expeditiously in accordance with law. The civil appeal was dismissed with no order as to costs.
Case Title: K Rashik v. National Insurance Company Ltd. and Another
Case No.: Civil Appeal No. 10706 of 2026
Bench: Justice Ujjal Bhuyan and Justice Atul S. Chandurkar
Date: September 16, 2026
