Insurer's Office Location Cannot Confer Tribunal Jurisdiction Under Section 166, Supreme Court Holds

A Supreme Court division bench upholds the Madras High Court's transfer of a motor accident claim to Chittoor, ruling that an insurer's branch office location cannot ground territorial jurisdiction under the Motor Vehicles Act, 1988.

The Supreme Court has dismissed a motor accident claimant's appeal challenging the transfer of his compensation proceedings from the Motor Accidents Claims Tribunal at Chennai to the one at Chittoor, Andhra Pradesh. A division bench of Justice Ujjal Bhuyan and Justice Atul S. Chandurkar held that the presence of an insurer's office at the place where the claim was filed cannot, by itself, confer territorial jurisdiction on a Tribunal under Section 166(2) of the Motor Vehicles Act, 1988. The bench also clarified that the word “defendant” in Section 166(2) does not include an insurer, and that an insurer impleaded as a party-respondent by the claimant is fully entitled to contest territorial jurisdiction on all permissible grounds.

How the Dispute Reached the Supreme Court

On 25 October 2022, K Rashik was riding his two-wheeler along with his brother in District Tirupati, Andhra Pradesh, when a mini truck driven by the second respondent struck them. Rashik underwent treatment as an in-patient at a hospital in Tirupati. His brother lodged a First Information Report on 28 October 2022 at Yerravaripalem Police Station, District Tirupati.

Rashik filed a claim application under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accidents Claims Tribunal at Chennai. His address as stated in the claim application was in Chittoor District, Andhra Pradesh. There was no pleading in the claim application indicating that any part of the cause of action had arisen within the territorial limits of Chennai.

National Insurance Company Limited, impleaded as a respondent, raised an objection on 11 March 2025 to the territorial jurisdiction of the Chennai Tribunal. It argued that no part of the cause of action had arisen there. The learned Member of the Tribunal, by order dated 11 July 2025, rejected this objection, holding that since the insurer had its business at Chennai, the Tribunal there had jurisdiction.

The insurer filed a Civil Revision Petition under Article 227 of the Constitution. A learned Single Judge of the Madras High Court, by order dated 16 March 2026, held that since the accident occurred at Chittoor, Andhra Pradesh, and the claimant resided there, the Tribunal at Chennai had no territorial jurisdiction. The High Court set aside the Tribunal's order and directed transfer of the proceedings to the Tribunal at Chittoor. Rashik appealed to the Supreme Court.

Whether the Insurer Could Raise a Jurisdiction Objection

Senior Advocate Mr. A. Sirajudeen, appearing for the claimant, argued that the insurer had no valid basis to raise a territorial objection because it had an office at Chennai and would suffer no prejudice. The Court rejected this contention.

Relying on the three-judge bench decision in United India Insurance Co. Ltd. v. Shila Datta & Others (2011 INSC 759), the Court held that an insurer impleaded as a party-respondent by the claimant — rather than merely notified under Section 149(2) — is entitled to raise all grounds available to contest the claim, without being restricted to the limited grounds under Section 149(2). Territorial jurisdiction is one such ground. Since Rashik himself had impleaded the insurer as a defendant, the insurer was fully entitled to raise the objection.

Reading Section 166(2): Three Options for a Claimant

The Court examined Section 166(2) of the Act of 1988, which allows a claimant to file a claim application before the Tribunal having jurisdiction over: (a) the area where the accident occurred; (b) the place where the claimant resides or carries on business; or (c) the place where the defendant resides.

The bench drew attention to a deliberate textual distinction within Section 166(2) itself. With reference to the claimant, the provision uses the phrase “resides or carries on business”, whereas with reference to the defendant, only “resides” is used. The place where the defendant carries on business was specifically omitted. The Court contrasted this with Section 20 of the Code of Civil Procedure, 1908, which does permit suit at the place where the defendant carries on business. That stipulation is absent from Section 166(2).

On the facts, Rashik's address in the claim application pointed to Chittoor District. The accident occurred in District Tirupati. The driver of the offending vehicle was also stated to reside in District Chittoor. There was no averment that Rashik carried on business at Chennai or elsewhere, and no part of the cause of action had arisen within the territorial limits of the Chennai Tribunal.

Whether “Defendant” in Section 166(2) Includes an Insurer

The claimant had argued that since the insurer had its head office at Chennai, the Chennai Tribunal had jurisdiction under the “defendant resides” limb of Section 166(2). The Court rejected this reading.

The bench held that the word “defendant” in Section 166(2) does not include an insurer. The reasoning was structural: impleading an insurer is optional, not mandatory. The contesting defendant in a claim application is principally the owner and/or driver of the offending vehicle. Section 168(1) of the Act of 1988 separately requires the Tribunal to give notice of the application to the insurer regardless of whether the insurer is impleaded. The Court observed that this separate notification mechanism is one reason why the expression “or carries on business” was not used in relation to the defendant in Section 166(2) — an insurer is not always expected to be arrayed as a defendant.

When Section 21 of the Code Applies — and When It Does Not

Much of the Court's analysis addressed a distinction that runs through several prior decisions: the stage at which a territorial jurisdiction objection is raised determines the legal standard applicable.

Where the objection is raised after an award has been passed and is contested at the appellate stage, Section 21(1) of the Code of Civil Procedure applies. Under that provision, a party must not only show that an objection was raised before the Tribunal, but also that the Tribunal's exercise of jurisdiction despite the absence of territorial competence resulted in a failure of justice. Without demonstrating failure of justice, an appellate court cannot interfere on grounds of territorial jurisdiction alone.

The Court reviewed three earlier decisions to explain this boundary. In Mantoo Sarkar v. Oriental Insurance Co. Ltd. and Others (2008 INSC 1453), the objection was raised at the appellate stage and the insurer failed to point to any prejudice. The Court exercised jurisdiction under Article 142 and restored the Tribunal's award. In Malati Sardar v. National Insurance Company Limited and Others (2016 INSC 12), again an appellate-stage objection, the Court held that in the absence of any shown prejudice, the award could not be disturbed. In Balveer Batra v. The New India Assurance Company and Another (2024 INSC 361), where the objection was raised before the Tribunal but the Tribunal still decided all other issues against the claimant before dismissing for want of jurisdiction, the Court set aside the findings on merits and directed fresh adjudication.

In all three cases, the objection was examined post-award at an appellate stage, attracting Section 21(1). The present case is different. The insurer raised its objection before the Tribunal at the very outset, before any adjudication on the merits of the claim. The claim application still awaits decision on merits. In those circumstances, the Court held, Section 21(1) of the Code is not attracted. The requirements of Section 166(2) of the Act of 1988 must be satisfied at the threshold.

Purposive Interpretation Has Limits

Rashik's counsel urged that the Act of 1988 is beneficial legislation and should be interpreted in a manner that protects the claimant's interests. The Court accepted that the statute is indeed intended to redress hardships flowing from motor vehicle accidents and must be read with that purpose in mind. However, the bench cautioned that a purposive interpretation cannot override the plain language of a statutory provision. An interpretation that finds no support in the text of the statute cannot be accepted.

On the averments in the claim application, the Court found the position clear: the claimant resided in Chittoor District, the accident occurred in District Tirupati, and neither the claimant's residence nor the accident site fell within the territorial limits of the Chennai Tribunal. The insurer's office at Chennai could not supply a jurisdictional hook that the statute does not provide.

Order

The Supreme Court upheld the order dated 16 March 2026 of the learned Single Judge of the Madras High Court. The direction to transmit the entire proceedings from the Tribunal at Chennai to the Tribunal at Chittoor was confirmed. The claim application filed by Rashik is to be tried by the Tribunal at Chittoor in accordance with law, expeditiously. The Civil Appeal was dismissed with no order as to costs. The pending Interlocutory Application was also disposed of.