Claim petition is maintainable at a place where insurance company is carrying on its business #indianlaws

The provision for territorial jurisdiction has to be interpreted consistent with the object of facilitating remedies for the victims of accidents. Hyper technical approach in such matters can hardly be appreciated. There is no bar to a claim petition being filed at a place where the insurance company, which is the main contesting parties in such cases, has its business.

In the instant matter, claim petition was filed under Section 166 of the Motor Vehicles Act, 1988 (“the Act”) seeking compensation before the Motor Accidents Claims Tribunal. The award passed by the Tribunal was challenged before the High Court on the only ground of lack of territorial jurisdiction of the Tribunal.

High Court upheld the objection taken by Insurer and set aside the award as was passed by the Tribunal. The correctness of this impugned order was questioned before the Supreme Court.

High Court in its impugned order had given following observation:

“In the instant case admittedly the accident took place in Hooghly. The claimant, as evident from the cause title, resides at Hoogly. The owner, the respondent, too resides at Hooghly. Hooghly, no doubt, is beyond the territorial jurisdiction of the Tribunal at Kolkata. The argument of the respondent-claimant that the Kolkata Tribunal exercises jurisdiction since the regional office of the insurance company is situated within its territorial limits cannot be accepted as the last option under section 166(2) cannot be construed to mean the residential address of the company as a company can have a business or an office address and not a residential address. Therefore, the Tribunal at Kolkata had no jurisdiction to entertain the claim petition.”

The question before the apex Court thus was whether the Tribunal at Kolkata had the jurisdiction to decide the claim application under Section 166 of the Act when the accident took place outside Kolkata jurisdiction and the claimant also resided outside Kolkata jurisdiction, but the Respondent being a juristic person carried on business at Kolkata. Further question that arose was whether in absence of failure of justice, the High Court could set aside the award of the Tribunal on the ground of lack of territorial jurisdiction.

It was held that the jurisdiction of the Tribunal is wider than the civil court. The Tribunal could follow the provisions of Code of Civil Procedure (CPC). In view of Section 21 of the Code of Civil Procedure (which provides that no objection to the place of suing should be allowed by an appellate or revisional court, unless there was a consequent failure of justice), objection of lack of territorial jurisdiction could not be entertained in the absence of any prejudice. Distinction has to be drawn between a jurisdiction with regard to subject matter on the one hand and that of territorial and pecuniary jurisdiction on the other. A judgment may be nullity in the former category, but not in the later.

The Court further held that the provision in question is a benevolent provision for the victims of accidents of negligent driving. The provision for territorial jurisdiction has to be interpreted consistent with the object of facilitating remedies for the victims of accidents. Hyper technical approach in such matters can hardly be appreciated. There is no bar to a claim petition being filed at a place where the insurance company, which is the main contesting parties in such cases, has its business. In such cases, there is no prejudice to any party. High Court’s impugned order was accordingly set aside.

[Malati Sardar vs. National Insurance Company Limited]

(SC, 05.01.2016 – Civil Appeal No. 10 of 2016)