Introduction:

The Supreme Court of India, comprising Justice Ujjal Bhuyan and Justice Atul S. Chandurkar, has clarified the territorial jurisdiction of Motor Accident Claims Tribunals (MACTs) under Section 166(2) of the Motor Vehicles Act, 1988. In K Rashik v. National Insurance Company Ltd. & Anr., the Court held that the provision allowing a claimant to institute compensation proceedings where he carries on business cannot be extended to an insurance company merely because the insurer maintains a business office within that jurisdiction. The Court further clarified that the expression “defendant resides” in Section 166(2) does not include the place where an insurance company carries on business.

The judgment, delivered on September 16, 2026, arose from an appeal challenging the Madras High Court’s decision that the MACT at Chennai lacked territorial jurisdiction to entertain the claimant’s compensation petition. The High Court had directed that the proceedings be pursued before the Tribunal at Chittoor, where the claimant resided and where the accident occurred in the geographical area identified in the proceedings.

The central legal question before the Supreme Court was whether the existence of an insurance company’s office within a particular territory could independently confer jurisdiction upon the MACT situated there, even when the accident, the claimant’s residence and the other relevant jurisdictional factors did not connect the claim to that place.

The dispute required the Court to examine the precise language of Section 166(2), the distinction between the jurisdictional rules under the Motor Vehicles Act and those under the Code of Civil Procedure, 1908, and the legal position of an insurer impleaded as a respondent in a motor accident compensation claim.

The Court also considered an important procedural distinction: whether an objection to territorial jurisdiction raised before the Tribunal begins adjudicating the claim should be treated in the same manner as an objection raised after an award has already been passed.

While recognising that the Motor Vehicles Act is beneficial legislation intended to provide relief to victims of road accidents, the Supreme Court emphasised that the beneficial purpose of a statute cannot justify an interpretation unsupported by its actual language. The Court ultimately dismissed the claimant’s appeal, upheld the Madras High Court’s order and directed that the compensation claim be adjudicated by the MACT at Chittoor.

The ruling provides guidance on the proper interpretation of territorial jurisdiction under Section 166(2), particularly where the insurer’s presence in a particular city is the principal basis relied upon to institute proceedings there.

Arguments of the Parties:

The appellant, K Rashik, approached the Supreme Court challenging the Madras High Court’s conclusion that the MACT at Chennai lacked territorial jurisdiction. The appellant’s case was that the Tribunal should be permitted to entertain the compensation claim because he resided and worked at Chennai and the insurance company involved in the proceedings also maintained a business office there.

Senior Advocate A. Sirajudeen, appearing for the appellant, submitted that Section 166(2) should be interpreted in a manner that facilitates access to compensation proceedings for accident victims. According to the appellant, the fact that he resided and worked at Chennai provided a sufficient basis for allowing the claim to proceed before the Tribunal situated there.

The appellant sought to emphasise the beneficial character of the Motor Vehicles Act. It was argued that the legislation was enacted to provide an effective remedy to persons suffering injuries or losses in motor vehicle accidents and should therefore receive an interpretation that avoids unnecessary procedural obstacles for claimants.

On this basis, the appellant contended that the objection to territorial jurisdiction should not be allowed to defeat the compensation proceedings on a technical ground, particularly when the insurer itself had an office at Chennai.

The appellant further relied upon the decision of the Calcutta High Court in National Insurance Co. Ltd. v. Alpana Jana. The reliance was intended to support the contention that the presence of the insurance company within the territorial limits of the Tribunal could be considered while determining whether the proceedings were maintainable at that place.

Another aspect of the appellant’s submission concerned the insurer’s right to object to territorial jurisdiction. Since the insurer had voluntarily been impleaded as a respondent and carried on business at Chennai, the appellant questioned whether it should be permitted to challenge the jurisdiction of the very Tribunal where it maintained an office.

The appellant’s arguments, therefore, proceeded on two related grounds. First, the beneficial object of the Motor Vehicles Act required a claimant-friendly interpretation of the jurisdictional provision. Second, the insurer’s business presence at Chennai, combined with the appellant’s assertion that he resided and worked there, was sufficient to support the jurisdiction of the Chennai Tribunal.

The respondent, National Insurance Company Limited, opposed the appeal and defended the Madras High Court’s order. Its principal submission was that the territorial jurisdiction of a MACT must be determined in accordance with the conditions expressly prescribed under Section 166(2) of the Motor Vehicles Act.

The insurer disputed the factual basis of the appellant’s claim that Chennai was the appropriate forum. It pointed out that the claimant’s own address mentioned in the compensation petition showed that he resided at Chittoor. The insurer also relied upon the fact that the accident had occurred in the area connected with the Chittoor Tribunal, rather than Chennai.

According to the respondent, neither the accident nor the claimant’s residence established a territorial connection with Chennai. It therefore argued that the appellant could not rely merely upon the existence of an insurance company’s office to bring the proceedings within the jurisdiction of the Chennai Tribunal.

The insurer further submitted that the objection could not be dismissed as a purely technical issue. Territorial jurisdiction determines the authority of a Tribunal to entertain and adjudicate a claim, and the statutory requirements must be satisfied before the proceedings can continue.

The respondent accordingly maintained that the MACT at Chennai had no jurisdiction under Section 166(2) and that the Madras High Court had correctly directed the claimant to approach the Tribunal at Chittoor.

The competing submissions placed before the Supreme Court thus required it to determine whether the claimant’s asserted connection with Chennai was sufficient under the statute and, more particularly, whether the insurer’s place of business could be treated as an independent jurisdictional ground.

Court’s Judgment:

The insurer’s right to contest territorial jurisdiction

The Supreme Court first examined the appellant’s contention that the insurance company should not be permitted to challenge the territorial jurisdiction of the Chennai Tribunal because it maintained an office in the city.

The Court rejected this argument by distinguishing between the circumstances in which an insurer becomes a party to motor accident compensation proceedings and the rights available to it after it has been impleaded.

The bench explained that the impleadment of an insurance company as a respondent in a claim petition is not invariably mandatory. An insurer may be notified of the proceedings without necessarily being made a party to the claim. However, where the claimant chooses to implead the insurer as a respondent, or the Tribunal directs its impleadment in accordance with Section 170 of the Motor Vehicles Act, the insurer acquires the right to contest the claim on grounds legally available to a defendant.

The Court relied upon the Supreme Court’s decision in United India Insurance Co. Ltd. v. Shila Datta & Others to explain this distinction.

In that case, the Supreme Court had clarified that a statutory notice issued to an insurer under Section 149(2) does not automatically make the insurer a party to the compensation proceedings. Such a notice primarily informs the insurer that a claim has been made concerning a policy issued by it and that it may become liable to satisfy an award passed by the Tribunal.

The judgment in Shila Datta further recognised that an insurer cannot insist, as a matter of right, upon being impleaded as a respondent merely because it has received such a notice. Nevertheless, the insurer may be made a party either at the instance of the claimant or through an order of the Tribunal under Section 170.

Once the insurer becomes a party-respondent, its procedural position changes. It is entitled to raise the contentions available to resist the claim, subject to the applicable statutory restrictions.

Applying this principle, the bench held that the respondent insurance company could not be prevented from questioning the territorial jurisdiction of the Chennai Tribunal merely because it had an office there.

The fact that the insurer maintained a business establishment within a particular territory did not extinguish its right to challenge whether the Tribunal had jurisdiction under the governing statutory provision.

The Court’s reasoning made clear that the insurer’s right to raise a jurisdictional objection and the legal sufficiency of the grounds supporting that objection are separate matters. The insurer was entitled to raise the objection, but the Tribunal was required to determine its validity by applying Section 166(2).

Interpretation of Section 166(2) of the Motor Vehicles Act

The principal issue in the appeal concerned the interpretation of Section 166(2) of the Motor Vehicles Act, 1988.

The provision specifies the territorial limits within which an application for compensation arising out of a motor vehicle accident may be instituted. It permits a claimant to approach a Tribunal having jurisdiction over the area where the accident occurred, where the claimant resides or carries on business, or where the defendant resides.

The Supreme Court observed that the provision creates distinct jurisdictional alternatives for the claimant. These alternatives are intended to provide flexibility in selecting the appropriate forum for pursuing compensation.

However, the bench emphasised that the language used by Parliament in identifying these alternatives is significant. The provision expressly refers to the place where the claimant resides or carries on business, while the corresponding reference to the defendant is confined to the place where the defendant resides.

According to the Court, this difference cannot be treated as accidental or insignificant.

The legislature has expressly included the claimant’s place of business as a permissible basis for territorial jurisdiction. In contrast, it has not included the defendant’s place of business within the corresponding jurisdictional clause.

The bench therefore held that the expression “carries on business” cannot be transferred from the claimant’s jurisdictional option to the defendant’s jurisdictional option.

In explaining this distinction, the Court observed that the place where the defendant carries on business has been specifically omitted while defining the territorial jurisdiction of a Tribunal under Section 166(2).

This omission was central to the Court’s conclusion. If Parliament intended the place where a defendant carries on business to constitute an independent basis for jurisdiction, it could have expressly included that expression in the provision.

The Court was therefore unwilling to interpret the provision as though it contained language that Parliament had not enacted.

The judgment establishes that the claimant’s statutory right to institute proceedings at the place where he carries on business is personal to the claimant and cannot automatically be extended to an insurance company impleaded as a respondent.

Consequently, the mere fact that the insurer carries on business at Chennai cannot independently confer territorial jurisdiction upon the MACT situated there.

Distinction between Section 166(2) and Section 20 of the CPC

The Supreme Court also examined the appellant’s reliance upon the jurisdictional principles contained in Section 20 of the Code of Civil Procedure, 1908.

Section 20 of the CPC provides for the institution of civil suits in courts having jurisdiction over specified locations, including, in appropriate circumstances, the place where a defendant carries on business.

The appellant’s reliance upon this provision was relevant because it provides a broader reference to the defendant’s business establishment than the language employed in Section 166(2) of the Motor Vehicles Act.

However, the bench held that the two provisions are differently worded and cannot be treated as interchangeable.

Section 166(2) is a special statutory provision governing the territorial jurisdiction of Motor Accident Claims Tribunals. Its language must therefore be examined independently, rather than supplemented by importing a jurisdictional ground expressly available under the general civil procedure provision.

The Court noted that Section 166(2) specifically refers to the claimant’s residence and place of business but does not similarly refer to the defendant’s place of business.

The distinction between the two provisions was therefore deliberate in its legal effect, irrespective of whether the wording of Section 20 might permit a civil suit to be instituted at a place where a defendant carries on business.

The Court’s approach demonstrates that jurisdictional provisions must be interpreted according to their own statutory language. A rule applicable to ordinary civil suits cannot automatically be applied to proceedings before a specialised Tribunal when the governing legislation prescribes a different jurisdictional framework.

This distinction was particularly important in the present case because the appellant sought to rely upon the insurer’s Chennai office as a basis for jurisdiction, despite the absence of the corresponding statutory language in Section 166(2).

Why the insurer’s business office cannot determine the Tribunal’s jurisdiction

The Supreme Court next examined whether an insurance company could be treated as a “defendant” for the purpose of determining territorial jurisdiction under Section 166(2).

The bench observed that the role of an insurer in motor accident compensation proceedings differs from that of a defendant whose presence is necessarily required for the claimant to pursue the underlying claim.

The claimant’s compensation claim arises from the motor vehicle accident and the resulting injury, death or loss. The insurer’s involvement is connected with the insurance policy and the statutory or contractual liability that may arise in relation to the compensation awarded.

As explained in Shila Datta, an insurer may receive notice of a claim without necessarily being impleaded as a party. The statutory framework thus recognises that the insurer’s participation is not invariably a prerequisite for the institution of the compensation proceedings.

The bench also referred to Section 168(1) of the Motor Vehicles Act, which requires the Tribunal to issue notice to the insurer independently of whether the claimant has formally impleaded it as a respondent.

This statutory arrangement was relevant to the Court’s interpretation of the word “defendant” in Section 166(2).

If an insurer is not necessarily required to be arrayed as a defendant in every claim petition, its place of business cannot automatically become a jurisdictional factor governing the institution of the claim.

The Court explained that the omission of the words “or carries on business” from the clause concerning the defendant may be understood in the context of the insurer’s position under the Act.

The insurer is not always expected to be impleaded as a defendant. Consequently, treating its business establishment as a separate jurisdictional ground would introduce a basis for territorial jurisdiction that is not supported by the statutory text.

The bench accordingly rejected the proposition that the insurer’s office at Chennai could, by itself, confer jurisdiction upon the MACT situated there.

This interpretation does not mean that an insurer can never be a party to proceedings before a Tribunal having territorial jurisdiction. Rather, it means that the insurer’s business location cannot independently establish that jurisdiction under Section 166(2).

Where the accident, the claimant’s residence or place of business, or the defendant’s residence provides the necessary statutory connection, the proceedings may be instituted before the appropriate Tribunal. The insurer’s presence may be relevant to the conduct of those proceedings, but it cannot replace the jurisdictional requirements laid down by Parliament.

The significance of when a territorial jurisdiction objection is raised

Another important aspect of the judgment concerned the stage at which an objection to territorial jurisdiction is raised.

The appellant’s arguments required the Supreme Court to consider earlier decisions dealing with territorial jurisdiction in motor accident compensation proceedings, particularly Mantoo Sarkar v. Oriental Insurance Co. Ltd., Malati Sardar v. National Insurance Company Limited and Balveer Batra v. The New India Assurance Company.

The bench examined these authorities in the context of Section 21(1) of the Code of Civil Procedure, 1908, which governs objections relating to the place of suing.

Section 21(1) provides that an objection concerning the territorial jurisdiction of a court cannot ordinarily be entertained by an appellate or revisional court unless the objection was raised at the earliest opportunity and there has also been a consequent failure of justice.

The requirement of demonstrating a failure of justice is particularly relevant where a party challenges territorial jurisdiction after the proceedings have already progressed and an adjudication has taken place.

The Supreme Court clarified that the earlier decisions relied upon by the appellant concerned objections raised at the appellate or post-award stage. Those cases therefore involved the application of the procedural threshold prescribed under Section 21(1) of the CPC.

The bench distinguished such situations from the present case, where the insurer had challenged the territorial jurisdiction of the Tribunal at the initial stage of the proceedings, before the compensation claim had been adjudicated on its merits.

The Court held that the stage at which the objection is considered is legally significant.

Where an objection is raised before the Tribunal at the threshold, the question must be determined by applying the jurisdictional requirements of Section 166(2) of the Motor Vehicles Act.

In contrast, where the objection is raised after an award has been passed and the matter reaches an appellate or revisional forum, the requirements of Section 21(1) of the CPC become relevant, including the requirement to establish a failure of justice.

The bench explained that the earlier decisions could not be relied upon to establish that every objection to territorial jurisdiction must necessarily satisfy the failure-of-justice requirement, regardless of the stage at which it is raised.

Such an interpretation would overlook the distinction between an objection raised before the Tribunal commences adjudication and one raised after the proceedings have culminated in anaward.

In the present case, the compensation application was still awaiting adjudic