K Rashik vs National Insurance Company Ltd & Anr

Supreme Court Clarifies Territorial Jurisdiction Under Section 166(2) Motor Vehicles Act

Case Snapshot

Case Name: K Rashik v. National Insurance Company Ltd. & Anr.
Citation: 2026 INSC 996
Bench: Justice Atul S. Chandurkar & Justice Ujjal Bhuyan
Date of Judgment: September 16, 2026
Area of Law: Motor Accident Compensation, Territorial Jurisdiction, Section 166(2) MV Act

The Judgment in One Line

Supreme Court holds insurer’s Chennai office does not confer territorial jurisdiction; claim must be filed where accident occurred or claimant/defendant resides.

Why this Judgement Matters

This judgment settles the scope of territorial jurisdiction under Section 166(2) of the Motor Vehicles Act, 1988. It clarifies that an insurer’s place of business is irrelevant for jurisdiction; only the claimant’s residence/business or the defendant’s residence, or the place of accident, matters. It also confirms that an insurer impleaded as a party can raise all defences, including territorial jurisdiction. The ruling will prevent forum-shopping and ensure claims are heard by the appropriate Tribunal.

Background

The appellant met with an accident on 25.10.2022 in Tirupati, Andhra Pradesh. He filed a claim under Section 166 MV Act before the Tribunal at Chennai. His address in the claim was Chittoor, Andhra Pradesh. The accident occurred in Tirupati. The driver/owner also resided in Chittoor. The insurer had an office in Chennai. The insurer objected to Chennai Tribunal’s jurisdiction. The Tribunal rejected the objection, holding insurer’s Chennai office conferred jurisdiction. The Madras High Court set aside this order and transferred the claim to Chittoor. The claimant appealed to the Supreme Court.

Issues Before the Court

Whether the Tribunal at Chennai had territorial jurisdiction under Section 166(2) MV Act.
Whether the insurer, having been impleaded as a party, could raise an objection to territorial jurisdiction.
Whether Section 21 CPC applies when the objection is raised before the Tribunal at the initial stage.
Whether the insurer’s business office at Chennai confers jurisdiction.

What Did the Supreme Court Hold?

Section 166(2) Options Are Exhaustive

A claim can be filed where: (a) the accident occurred; (b) the claimant resides or carries on business; or (c) the defendant resides.
The words “defendant resides” do not include “carries on business.” This differs from Section 20 CPC.
The insurer is not intended to be the “defendant” for this clause because impleading the insurer is optional.

Insurer Can Object to Jurisdiction

Relying on United India Insurance v. Shila Datta, the Court held that once an insurer is impleaded as a party, it can raise all grounds available to a defendant, including territorial jurisdiction.
The insurer is not restricted to grounds under Section 149(2) when impleaded as a party.

Objection at Initial Stage vs Appellate Stage

If objection is raised before the Tribunal at the initial stage, Section 166(2) governs.
If raised at appellate stage after award, Section 21 CPC applies: the objector must show failure of justice.
In this case, the objection was raised before the Tribunal; hence, Section 166(2) applied.

No Cause of Action at Chennai

Claimant resided in Chittoor. Accident occurred in Tirupati. Driver resided in Chittoor.
No part of cause of action arose in Chennai.
Insurer’s Chennai office is irrelevant under Section 166(2).

Purposive Interpretation Cannot Override Plain Language

The Act is beneficial, but interpretation must flow from plain statutory language.
An interpretation without statutory support cannot be accepted.

Key Legal Principles

Under Section 166(2) MV Act, territorial jurisdiction lies where the accident occurred, or where the claimant resides/carries on business, or where the defendant resides.
The insurer’s place of business does not confer jurisdiction; “defendant” does not include insurer for this purpose.
An insurer impleaded as a party can raise all defences, including territorial jurisdiction.
If territorial jurisdiction is challenged at the initial stage, Section 166(2) applies; if challenged after award, Section 21 CPC applies and failure of justice must be shown.
A beneficial statute cannot be interpreted contrary to its plain language.
Impleading the insurer is optional; the Tribunal must issue notice to the insurer regardless.

Important Precedents

United India Insurance Co. Ltd. v. Shila Datta – Three-Judge Bench held that an insurer impleaded as a party can raise all grounds, not just those under Section 149(2).
Mantoo Sarkar v. Oriental Insurance Co. Ltd. – Objection to territorial jurisdiction at appellate stage requires proof of prejudice/failure of justice under Section 21 CPC.
Malati Sardar v. National Insurance Co. Ltd. – Reiterated that absence of prejudice prevents interference with jurisdiction at appellate stage.
Balveer Batra v. New India Assurance Co. – Tribunal should not decide merits after finding lack of territorial jurisdiction; Section 21 CPC applies at appellate stage.

Practical Impact

For Advocates: File motor accident claims only where Section 166(2) permits. Do not rely on the insurer’s branch office. If the insurer is impleaded, expect all defences, including jurisdiction.
For Future Litigation: This judgment will be cited to oppose claims filed in forums with no cause of action. It also clarifies the stage-based application of Section 21 CPC.
For Tribunals: They must examine jurisdiction strictly under Section 166(2) when objection is raised at the initial stage.

Lawcurb Quick Insight

The Court drew a key distinction: Section 20 CPC allows jurisdiction where the defendant carries on business, but Section 166(2) MV Act deliberately omits that phrase for defendants. This omission is intentional because the insurer is not a necessary defendant.

Lawcurb Practice Note

Before filing a claim, verify: (i) place of accident; (ii) claimant’s residence/business; (iii) defendant’s residence. Do not file solely because the insurer has an office there. If objection is raised late, argue failure of justice is not shown.

Remember this Ratio

Under Section 166(2) MV Act, an insurer’s business office does not confer territorial jurisdiction; the claim must be filed where the accident occurred or the claimant/defendant resides.

Final Outcome

Civil Appeal dismissed.
Madras High Court order dated 16.03.2026 upheld.
Proceedings transferred from Chennai Tribunal to Chittoor Tribunal.
Claim to be tried expeditiously by Chittoor Tribunal.
No order as to costs.
Pending application disposed of.

Lawcurb Verdict

This judgment is a clear and timely clarification on territorial jurisdiction under the Motor Vehicles Act. By holding that an insurer’s business office does not create jurisdiction, the Court prevents forum-shopping and ensures claims are heard where the cause of action arises. The distinction between initial-stage and appellate-stage objections is practical and legally sound. A well-reasoned judgment.

Exam Lens

Question 1: What are the options for filing a motor accident claim under Section 166(2) MV Act? Does the insurer’s place of business confer jurisdiction?

Answer: Section 166(2) allows filing where: (a) the accident occurred; (b) the claimant resides or carries on business; or (c) the defendant resides. The insurer’s place of business does not confer jurisdiction. The words “defendant resides” do not include “carries on business,” unlike Section 20 CPC. The insurer is not intended to be the defendant for this clause because impleading the insurer is optional.

Question 2: Can an insurer impleaded as a party object to territorial jurisdiction? What is the effect of Section 21 CPC?

Answer: Yes. Once impleaded as a party, the insurer can raise all defences, including territorial jurisdiction (Shila Datta). If the objection is raised before the Tribunal at the initial stage, Section 166(2) governs. If raised at the appellate stage after award, Section 21 CPC applies: the objector must show failure of justice. In this case, the objection was at the initial stage, so Section 166(2) applied.

Question 3: How should a beneficial statute like the MV Act be interpreted? Can purposive interpretation override plain language?

Answer: The MV Act is beneficial, but it must be interpreted according to its plain language. Purposive interpretation cannot override express statutory words. The Court held that an interpretation without statutory support cannot be accepted. The plain language of Section 166(2) excludes the insurer’s business office as a jurisdictional ground.

This report is prepared by Lawcurb for educational and informational purposes only. It is a concise summary of the judgment and should not be construed as legal advice. Readers are encouraged to refer to the original judgment before relying on any legal proposition.