Supreme Court of India· 16 September 2026

Does Section 166(2) of the Motor Vehicles Act, 1988 confer jurisdiction where the defendant merely carries on business, unlike Section 20 of the Code?

K RASHIK v. NATIONAL INSURANCE COMPANY

2026 INSC 996 · CIVIL APPEAL NO.10706 OF 2026
Coram: Justice Ujjal Bhuyan · Justice Atul S. Chandurkar

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Answer

Section 166(2) of the Motor Vehicles Act, 1988 does not confer jurisdiction where the defendant merely carries on business, unlike Section 20 of the Code.

No. Section 166(2) of the Motor Vehicles Act, 1988 does not confer jurisdiction where the defendant merely carries on business, unlike Section 20 of the Code of Civil Procedure, 1908. Section 166(2) uses different expressions for a claimant ('resides or carries on business') and a defendant ('resides'), omitting the defendant's place of business, whereas Section 20 of the Code confers jurisdiction wherever the defendant carries on business; a claimant may sue where he resides, carries on business, where the accident occurred, or where the defendant resides, but not where the defendant merely carries on business. (¶8)

Headnote

Motor Vehicles Act, 1988 — s.166(2) — Territorial jurisdiction — Code of Civil Procedure, 1908 — s.20 — s.21(1) — Insurer as party-respondent — Motor Vehicles Act, 1988 — s.166(2) — Distinct from CPC s.20 — Held: Section 166(2) of the Motor Vehicles Act, 1988 does not confer jurisdiction where the defendant merely carries on business, unlike Section 20 of the Code of Civil Procedure, 1908. A claimant may sue where he resides, carries on business, where the accident occurred, or where the defendant resides. (¶8) Motor Vehicles Act, 1988 — s.166(2) — 'Defendant' excludes insurer — Held further: The word ‘defendant’ in Section 166(2) does not include an insurer, whose impleadment is optional at the claimant's choice. The contesting defendant is principally the owner or driver of the offending vehicle. (¶9) Motor Vehicles Act, 1988 — s.149(2) — Insurer as party-respondent — Held further: An insurer impleaded as a party-respondent, not merely a noticee under Section 149(2), can raise all grounds available to a contesting defendant, including territorial jurisdiction. (¶6) Code of Civil Procedure, 1908 — s.21(1) — Stage of the objection — Held further: An objection to territorial jurisdiction at the original stage is governed by Section 166(2); at the appellate stage it additionally requires proof of failure of justice under Section 21(1) of the Code. Civil Appeal dismissed; claim restored to the Tribunal at Chittoor. (¶10, 14, 16)

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In the Court's own words

Paragraph 8A claimant, thus, has three choices as regards the place where an application for compensation under Section 166(1) of the Act of 1988 could be filed. These are (a) at the place where he resides or (b) the area where the accident occurred or (c) the claimant carries on business. Besides these three options, a fourth option is also available to a claimant inasmuch as a claim application can also be filed within the local limits of the Tribunal where the defendant resides. It is pertinent to note that the words used are ‘within the local limits of whose jurisdiction the defendant resides’. What has been prescribed is the residence of the defendant and not the place where ‘the defendant carries on business’. Notably, in Section 166(2) itself the expression used with reference to a claimant is ‘or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business’, while the expression used with reference to a defendant is ‘the defendant resides’ for the purposes of conferring territorial jurisdiction. Thus, different expressions have been used qua a claimant and a defendant in Section 166(2) itself in the matter of conferring territorial jurisdiction for the making of a claim application. The legislative intent is, thus, clear. 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[^7] as regards the criteria for invoking territorial jurisdiction of the Tribunal. Under Section 20 of the Code, the Court within whose jurisdiction the defendant carries on business also has territorial jurisdiction to try a suit, which stipulation is not found in Section 166(2) of the Act of 1988. G. Insurer, whether a defendant in context of Section 166(2):

Acts & Sections

Section 166(2) of the Motor Vehicles Act, 1988Section 166(1) of the Motor Vehicles Act, 1988Section 168(1) of the Motor Vehicles Act, 1988Section 149(2) of the Motor Vehicles Act, 1988Section 169 of the Motor Vehicles Act, 1988Section 20 of the Code of Civil Procedure, 1908Section 21(1) of the Code of Civil Procedure, 1908

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Also decided in this judgment

Does the word 'defendant' in Section 166(2) of the Motor Vehicles Act, 1988 include an insurer?Can an insurer impleaded as a party-respondent, not merely a noticee, raise all grounds without being restricted to Section 149(2) of the Motor Vehicles Act, 1988?Must a party raising a territorial-jurisdiction objection at the appellate stage additionally show failure of justice, unlike at the original stage?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections