The Supreme Court has held that a motor accident compensation claim cannot be filed before a Claims Tribunal merely because the insurance company carries on business in that area. The Court clarified the territorial jurisdiction available under Section 166(2) of the Motor Vehicles Act, 1988.
The judgment came in an appeal concerning a claim filed before the Motor Accidents Claims Tribunal at Chennai, even though the accident occurred in Tirupati district, Andhra Pradesh, and the claimant’s pleaded address was in Chittoor district.
Background of the Case
K Rashik was riding a two-wheeler with his brother on October 25, 2022, when a mini truck collided with their vehicle on the Nerabaillu-Yerravaripalem road in Tirupati district. He received treatment at a hospital in Tirupati, while his brother lodged the FIR at Yerravaripalem Police Station.
Rashik filed a compensation claim under Section 166 of the Motor Vehicles Act before the Chennai Tribunal. National Insurance Company Ltd., which was impleaded as a respondent, objected to the Tribunal’s territorial jurisdiction.
The Chennai Tribunal rejected the objection on July 11, 2025, observing that the insurer also had business at Chennai. The Madras High Court later took a different view and transferred the proceedings to the Tribunal at Chittoor. Rashik then approached the Supreme Court.
The Supreme Court examined Section 166(2), which gives a claimant options to file a compensation application before the Tribunal having jurisdiction over the place where the accident occurred, where the claimant resides or carries on business, or where the defendant resides.
The Court noted that the provision uses different language for a claimant and a defendant. While a claimant can rely on both residence and the place where they carry on business, the provision refers to the place where the defendant “resides” and does not mention where the defendant carries on business.
The Bench further held that the insurer cannot be treated as the “defendant” contemplated under Section 166(2). This was because impleading the insurer as a defendant is not mandatory. The principal defendants in such proceedings are ordinarily the owner and/or driver of the offending vehicle.
The Court also rejected the argument that the insurance company could not object to territorial jurisdiction because it had an office in Chennai.
Referring to its earlier three-Judge Bench decision in United India Insurance Co. Ltd. v. Shila Datta & Others, the Court observed that once an insurer is voluntarily impleaded as a party-respondent, it is entitled to raise all grounds available to it in law. This includes an objection concerning territorial jurisdiction.
“Thus, on being impleaded as a defendant in a claim application, the insurer can, in the facts of the case, raise an objection to the territorial jurisdiction of the Tribunal to entertain the claim application.”
The Court considered earlier decisions including Mantoo Sarkar v. Oriental Insurance Co. Ltd., Malati Sardar v. National Insurance Company Limited and Balveer Batra v. The New India Assurance Company.
It explained that those cases involved objections to territorial jurisdiction being raised at the appellate or later stage. In such circumstances, Section 21(1) of the Code of Civil Procedure required the objecting party to establish failure of justice.
In the present case, however, the insurer had raised its objection before the Tribunal itself, at the initial stage. Therefore, the requirements of Section 166(2) applied directly and the test under Section 21(1) of the Code was not applicable.
The Supreme Court found that the claimant’s own pleadings showed his residence in Chittoor district, while the accident had occurred in Tirupati district. There was also no pleading that he carried on business within Chennai. The driver was stated to reside in Chittoor district as well.
The Court therefore held that no part of the cause of action arose within Chennai’s territorial limits. It also stressed that although the Motor Vehicles Act is intended to address the hardships caused by motor accidents, the statutory language must still be respected.
The Supreme Court upheld the Madras High Court’s March 16, 2026 order and confirmed the transfer of the proceedings from Chennai to Chittoor.
It directed that the claim application be tried by the Chittoor Tribunal in accordance with law and expeditiously.
The civil appeal was dismissed with no order as to costs.
Case Details:
Case Title: K Rashik v. National Insurance Company Ltd. and Another
Case Number: Civil Appeal No. 10706 of 2026
Judge: Justice Ujjal Bhuyan and Justice Atul S. Chandurkar
Decision Date: September 16, 2026
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