Insurer’s Office Does Not Create MACT Jurisdiction: Section 166(2) Strictly Governs Pre-Award Venue

Case: K RASHIK v. NATIONAL INSURANCE COMPANY LTD.

Citation: 2026 INSC 996 | Court: Supreme Court of India | Date: 16 September 2026

Introduction

This decision clarifies the territorial jurisdiction of Motor Accidents Claims Tribunals under Section 166(2) of the Motor Vehicles Act, 1988. The Supreme Court held that the existence of an insurer’s office or business establishment at a particular place does not, by itself, permit a motor-accident claim to be filed before the Tribunal situated there.

The appellant, K Rashik, was injured when a mini truck struck the two-wheeler he was riding in District Tirupati, Andhra Pradesh. He filed a compensation claim before the Motor Accidents Claims Tribunal at Chennai. National Insurance Company Limited objected at the outset, contending that none of the jurisdictional connecting factors specified in Section 166(2) existed in Chennai.

The Chennai Tribunal rejected the objection because the insurer carried on business in Chennai. The Madras High Court reversed that decision under Article 227 of the Constitution and directed transfer of the claim to the Tribunal at Chittoor. The principal questions before the Supreme Court were:

  • whether an impleaded insurer may challenge the Tribunal’s territorial jurisdiction;
  • whether the insurer’s office or business in Chennai conferred jurisdiction under Section 166(2); and
  • whether proof of prejudice or failure of justice was necessary when the objection was raised before adjudication of the claim.

Summary of the Judgment

The Supreme Court dismissed the claimant’s appeal and upheld the transfer to Chittoor. It laid down the following propositions:

  1. An insurer voluntarily impleaded as a party-respondent may raise every legally permissible defence, including an objection to territorial jurisdiction.
  2. Section 166(2) permits a claim to be filed before the Tribunal having jurisdiction over:
    • the place where the accident occurred;
    • the place where the claimant resides;
    • the place where the claimant carries on business; or
    • the place where the defendant resides.
  3. Unlike Section 20 of the Code of Civil Procedure, 1908, Section 166(2) does not confer jurisdiction on the basis that the defendant “carries on business” within the Tribunal’s territory.
  4. The “defendant” whose residence is relevant under Section 166(2) does not include the insurer merely because the claimant has chosen to implead it. The expression principally refers to the owner or driver of the offending vehicle and other substantive defendants.
  5. Where territorial jurisdiction is challenged at the initial, pre-award stage, the requirements of Section 166(2) must be satisfied. The insurer need not additionally establish prejudice or failure of justice under Section 21 of the Code.
  6. Where the objection is pursued only at the appellate or post-award stage, Section 21 applies and the objector must demonstrate that the lack of territorial jurisdiction caused a failure of justice.

Analysis

1. Statutory interpretation of Section 166(2)

The Court closely compared the language used for a claimant with that used for a defendant. In relation to the claimant, Parliament expressly employed the phrase “resides or carries on business.” In relation to the defendant, however, it used only “resides.”

This difference was treated as deliberate. A court cannot insert “carries on business” into the portion dealing with the defendant when Parliament specifically omitted those words. Consequently, even if the insurer had an office or conducted business in Chennai, that fact could not independently confer jurisdiction on the Chennai Tribunal.

The Court contrasted Section 166(2) with Section 20 of the Code of Civil Procedure. Section 20 expressly recognizes the place where a defendant carries on business as a basis for civil-court jurisdiction. The absence of equivalent language in Section 166(2) was decisive.

2. The insurer is not the relevant “defendant” for fixing venue

The Court held that the expression “defendant resides” in Section 166(2) was not intended to refer to an insurer. An insurer need not necessarily be impleaded by the claimant. Under Section 168(1), the Tribunal must notify the insurer even where it has not been made a party.

Territorial jurisdiction therefore cannot fluctuate merely because one claimant chooses to implead the insurer while another does not. The relevant defendants for this purpose are principally the owner and driver of the offending vehicle. Permitting the insurer’s office network to determine jurisdiction would effectively introduce a jurisdictional basis omitted by Parliament.

3. Application to the claimant’s pleadings

The claimant’s own application showed that:

  • the accident occurred in District Tirupati, Andhra Pradesh;
  • he was treated in Tirupati;
  • the First Information Report was registered in District Tirupati;
  • his pleaded residential address was in Chittoor District, Andhra Pradesh;
  • the driver was also stated to reside in Chittoor District; and
  • there was no pleading that the claimant carried on business in Chennai.

His assertion that he was about 150 kilometres from Chennai and that the insurer had an office there did not satisfy Section 166(2). No statutory connecting factor linked the claim to Chennai.

4. Beneficial legislation cannot override clear statutory language

The claimant argued that the Motor Vehicles Act is beneficial legislation and should be construed in favour of accident victims. The Court accepted the welfare-oriented character of the statute but emphasized that purposive interpretation has limits.

A beneficial statute should be interpreted to advance its object where the language permits more than one reasonable construction. It cannot justify adding words that Parliament deliberately omitted. Thus, the remedial purpose of the Act could not create territorial jurisdiction unsupported by Section 166(2).

5. Pre-award and post-award objections distinguished

A central contribution of the judgment is its distinction between the stage at which territorial jurisdiction is challenged:

  • Initial or pre-award stage: The Tribunal must directly apply Section 166(2). If none of its connecting factors exists, the matter cannot proceed before that Tribunal. Proof of prejudice is unnecessary.
  • Appellate or post-award stage: Section 21(1) of the Code becomes relevant. A completed adjudication will not ordinarily be disturbed merely for a territorial defect unless the objection was properly raised and the defect caused a failure of justice.

This distinction prevents technical jurisdictional objections from undoing completed trials without real injustice, while still requiring strict compliance when the issue is raised before the merits are adjudicated.

Precedents Cited

United India Insurance Co. Ltd. v. Shila Datta & Others

This three-Judge Bench decision governed the insurer’s right to object. It distinguishes an insurer that is merely a noticee under Section 149(2) from an insurer that has been impleaded as a party-respondent.

A mere noticee is generally confined to the statutory defences available under Section 149(2). By contrast, once an insurer is made a party—either voluntarily by the claimant or under Section 170—it may raise all defences available to a respondent. Relying on this principle, the Court held that National Insurance Company was entitled to challenge territorial jurisdiction because the claimant had himself impleaded it.

The quoted passage also referred to Nicolletta Rohtagi for the restricted position of an insurer that remains only a statutory noticee.

Mantoo Sarkar v. Oriental Insurance Co. Ltd. and Others

In this case, an award had already been passed by the Nainital Tribunal. The claimant was a migrant seasonal labourer working in Nainital, and the insurer failed to show prejudice from the proceeding being conducted there. Applying Section 21(1) of the Code, the Supreme Court restored the award through Article 142.

The present judgment explained that Mantoo Sarkar v. Oriental Insurance Co. Ltd. and Others concerned an objection pursued at the appellate stage after adjudication. It therefore did not excuse non-compliance with Section 166(2) where the objection was raised before trial.

Malati Sardar v. National Insurance Company Limited and Others

There, the insurer challenged the Kolkata Tribunal’s jurisdiction after compensation had been awarded. The Supreme Court held that, without proof of prejudice or failure of justice, the award could not be set aside merely for territorial irregularity.

Although that decision observed that there was no bar to filing where the insurer—the principal contesting party—carried on business, the present Court confined its relevance to the post-award setting governed by Section 21. It does not establish that an insurer’s business office is an original jurisdictional ground under Section 166(2).

BALVEER BATRA v. THE NEW INDIA ASSURANCE COMPANY and Another

The Tribunal in that case held that it lacked territorial jurisdiction but nevertheless decided the remaining issues against the claimant. The Supreme Court ruled that, once jurisdiction was declined, findings on the merits ought not to have been recorded. Because the defendants had fully contested the case and no failure of justice was shown, the proceedings were restored for adjudication.

The case reinforced the principle that the consequences of territorial defects depend upon the stage reached and whether the completed proceedings caused substantive injustice.

National Insurance Co. Ltd. vs Alpana Jana & others

The claimant relied on this Calcutta High Court decision to support jurisdiction at the place where the insurer conducted business. The Supreme Court did not adopt that submission. Its textual analysis of Section 166(2)—particularly the omission of “carries on business” for a defendant—led to the opposite conclusion in a pre-award challenge.

Complex Concepts Simplified

Territorial jurisdiction
The geographical authority of a court or Tribunal to hear a particular dispute.
Cause of action
The material facts giving rise to a legal claim, such as the accident, injury and resulting liability.
Impleadment
The formal inclusion of a person or entity as a party to legal proceedings.
Noticee and party-respondent
A noticee is informed of proceedings and may have limited statutory defences. A party-respondent is formally joined and may ordinarily raise all available defences.
Failure of justice
Real prejudice or unfairness caused by the jurisdictional defect, rather than a merely technical irregularity.
Beneficial legislation
A law intended to protect or compensate a vulnerable class. It is interpreted liberally, but not contrary to its express wording.
Article 227
The High Court’s constitutional power of supervision over subordinate courts and tribunals.
Article 142
The Supreme Court’s power to pass orders necessary to do complete justice in a case before it.

Impact of the Judgment

  • Claimants cannot create MACT jurisdiction merely by selecting a place where a national insurer maintains an office.
  • Claim petitions must specifically plead facts establishing one of the territorial links in Section 166(2).
  • Insurers impleaded as respondents may raise territorial objections without obtaining separate permission under Section 170.
  • Tribunals must decide preliminary jurisdictional objections by applying Section 166(2), rather than demanding proof of prejudice.
  • Appellate courts should not overturn completed awards for territorial defects unless Section 21’s failure-of-justice threshold is met.
  • The ruling limits forum shopping while preserving valid awards from belated technical challenges.

Conclusion

K RASHIK v. NATIONAL INSURANCE COMPANY LTD. establishes that an insurer’s office or business location is not an independent basis for territorial jurisdiction under Section 166(2) of the Motor Vehicles Act. The statutory expression “defendant resides” cannot be expanded to include the place where an insurer carries on business.

The judgment also creates a clear procedural distinction: strict statutory compliance governs an objection raised before the award, whereas a post-award objection must additionally demonstrate failure of justice under Section 21 of the Code of Civil Procedure. As Chennai had no relevant statutory connection with the accident, claimant, driver or pleaded business of the claimant, the transfer of the proceedings to Chittoor was correctly upheld.