Insurer's Office Location Doesn't Grant Jurisdiction in Motor Accident Cases: Supreme Court
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Disallowing forum shopping in motor accident claims, the Supreme Court has ruled that a claimant cannot haul an insurance company to a jurisdiction where no cause of action arose simply because the insurer operates a branch office there.
A bench of Justice Ujjal Bhuyan and Justice Atul S. Chandurkar dismissed an appeal challenging the transfer of a claim petition from Chennai to Chittoor, holding that the statutory choice under Section 166(2) of the Motor Vehicles Act, 1988 does not extend to the place where an insurer carries on business.
Key Takeaways
- Strict Limits on Forum Selection
Section 166(2) of the Motor Vehicles Act, 1988 confers jurisdiction based on the residence of the claimant, the accident site, or the residence of the defendant, specifically excluding the insurer's place of business.
- Distinction from CPC
Unlike Section 20 of the Code of Civil Procedure, 1908, the MV Act deliberately omits the phrase 'carries on business' regarding defendants.
- Pre-Award vs. Post-Award Objections
Challenges to territorial jurisdiction at the initial stage are governed strictly by Section 166(2) of the MV Act, whereas post-award appellate challenges require proof of 'failure of justice' under Section 21 of the Code of Civil Procedure, 1908.
Jurisdiction in Motor Accident Claims
The Supreme Court affirmed that an insurance company, once voluntarily impleaded as a party-respondent by the claimant, possesses full rights to raise an objection against territorial jurisdiction at the initial stage of the proceedings.
The Apex Court, in its reasoning, observed that "While a claimant can file a claim application also at the place where he carries on business, he may also choose to file it at the place where the defendant resides. The place where the defendant carries on business has been specifically omitted while specifying territorial jurisdiction of a Tribunal. Section 166(2) is distinctly worded from Section 20 of the Code of Civil Procedure, 1908 as regards the criteria for invoking territorial jurisdiction of the Tribunal."
Ratio
Under Section 166(2) of the Motor Vehicles Act, 1988, the term 'defendant' refers primarily to the owner or driver of the offending vehicle and does not include the insurer for jurisdictional purposes. Consequently, a Motor Accidents Claims Tribunal does not acquire territorial jurisdiction merely because the impleaded insurer carries on business within its local limits. Furthermore, when an objection to territorial jurisdiction is raised by an impleaded insurer at the original stage before the Tribunal, the claimant must strictly satisfy Section 166(2) requirements without relying on Section 21(1) of the Code of Civil Procedure, 1908.
Background
The dispute originated from a road accident on October 25, 2022, in Tirupati District, Andhra Pradesh, where the appellant was riding a two-wheeler and was struck by a mini truck. The appellant, who resided in District Chittoor, Andhra Pradesh, filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accidents Claims Tribunal at Chennai, alleging that the insurer maintained its head office in Chennai.
The Motor Accidents Claims Tribunal, Chennai rejected the insurer's objection to its territorial jurisdiction on July 11, 2025. However, on a Civil Revision Petition filed under Constitution of India, the Madras High Court set aside the Tribunal's order on March 16, 2026, and transferred the proceedings to the Tribunal at Chittoor, holding that no part of the cause of action had arisen in Chennai.
Appealing to the Supreme Court, the claimant contended that the Motor Vehicles Act, 1988 is beneficial legislation and cited National Insurance Co. Ltd. vs Alpana Jana & others to argue that the insurer suffered no prejudice. Conversely, the insurer relied on United India Insurance Co. Ltd. vs. Shila Datta & Others to maintain that an impleaded insurer can raise all legal defenses. The Apex Court analyzed appellate-stage jurisdictional rulings like Mantoo Sarkar vs. Oriental Insurance Co. Ltd. and Others ( "2008 INSC 1453": 2008 CaseBase(SC) 54), Malati Sardar vs. National Insurance Company Limited and Others ( "2016 INSC 12": 2016 CaseBase(SC) 156), and Balveer Batra vs. The New India Assurance Company and Another, clarifying that Section 21 of the Code of Civil Procedure, 1908 applies only post-award. Finding no statutory support for filing the claim in Chennai, the Supreme Court upheld the Madras High Court's decision.
Case Details:
Case No.: Civil Appeal No. 10706 of 2026
Neutral Citation: 2026 INSC 996
Case Title: K Rashik v. National Insurance Company Ltd. and Another
Appearances:
For the Petitioner(s): Mr. A. Sirajudeen, Senior Advocate
For the Respondent(s): Mr. S.L. Gupta, Advocate
Source: 2026 CaseBase(SC) 7000
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