2025 INSC 473 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2282/2025

RAKESH KUMAR VERMA … APPELLANT

VS.

HDFC BANK LTD. … RESPONDENT

WITH

CIVIL APPEAL NO. 2286/2025

HDFC BANK … APPELLANT

VS.

DEEPTI BHATIA … RESPONDENT

J U D G M E N T

DIPANKAR DATTA, J.

THE CHALLENGE

1. In the lead appeal

1

, Rakesh has called in question the judgment and

order of the High Court of Judicature at Patna

2

dated 25

th

January, 2022,

allowing a civil revisional application

3

filed by HDFC Bank.

1

Civil Appeal No. 2282/2025

2

Patna High Court, hereafter

3

Civil Revision No. 23 of 2020

2

2. In the connected appeal

4

, HDFC Bank has taken exception to the

judgment and order of the High Court of Delhi

5

dated 12

th

November,

2011, dismissing its civil revisional application

6

.

THE FACTS

3. The lead appeal rests on a simple set of facts, which are as follows:

I. Vide letter dated 24

th

July, 2002, HDFC Bank appointed Rakesh on

the post of Executive, Transaction Banking Group (Operation), in

the Wholesale Banking Operations. Pursuant thereto, Rakesh joined

his service at Wholesale Banking Operations at Exhibition Road,

Patna.

II. The appointment letter of Rakesh had an exclusive jurisdiction

clause, reading as under:

“The terms and conditions set out in this letter of appointment

constitute service conditions applicable to your employment in the

Bank and with regard to any dispute thereof, the Bombay Courts

will have exclusive jurisdiction.”

III. Service of Rakesh was terminated on 28

th

August, 2016 due to

allegations of fraud and misconduct.

IV. Aggrieved thereby, Rakesh instituted a civil suit

7

in the court of the

Sub-Judge-1, Patna, seeking the following relief:

“a) Declaration that termination letter dated 28.06.2016 being

annexure – C hereto is illegal, arbitrary, unreasonable,

unwarranted, unconstitutional, mala fide, bad in law as well as

without jurisdiction, violative of … illegible … on facts, principles of

natural justice and the same may be adjudged null and void and

cancelled.

b) Ad-interim injunction restraining the defendants from giving

any effect to the termination letter dated 28.06.2016 and further

4

Civil Appeal No. 2286/2025

5

Delhi High Court, hereafter

6

Civil Revision Petition No. 79/2021

7

Title Suit No. 212 of 2017

3

directing the defendants to forthwith reinstate the plaintiff in

service with all consequential benefits.

c) Direction to the defendants to reinstate forthwith the plaintiff in

service with all consequential benefits including the arrears of

salary with 18% interest per annum.”

V. On receipt of summons, HDFC Bank filed a petition under Order

VII, Rule 11 of the Code of Civil Procedure, 1908

8

for rejection of

the plaint on the ground that it is the courts in Mumbai which have

jurisdiction and not the court where the suit was instituted.

VI. The petition filed by HDFC Bank came to be dismissed by the trial

court, vide order dated 14

th

December, 2018.

VII. Dissatisfied with the dismissal of the said petition, HDFC Bank filed

the revisional application before the Patna High Court, which has

since succeeded.

4. The connected appeal too rests on similar set of facts, which are as

follows:

I. Deepti was appointed as “Clerk” in Lord Krishna Bank, which was

merged with HDFC Bank in 2009. Vide Employment Agreement

dated 23

rd

March, 2009, Deepti was appointed as an officer in the

Retail Banking Branch at Janak Puri, Delhi. This agreement also

included a similar exclusive jurisdiction clause as the one in the

case of Rakesh. In terms thereof, any dispute between the parties

leading to legal action had to be thrashed out in the competent

court in Mumbai.

8

CPC

4

II. Service of Deepti was terminated on 31

st

May, 2017, also due to

allegations of fraud and misconduct.

III. Aggrieved thereby, Deepti instituted a civil suit

9

in the court of the

Senior Civil Judge, Rohini Courts, Delhi, seeking inter alia the

following relief:

“a) Declare the termination letter dated 31.05.2017 as null and

void since the same is illegal and quash the same;

b) Direct the Defendant to reinstate the Plaintiff in service with all

consequential benefits including back wages and continuity of

services.”

IV. HDFC Bank filed its written statement stating that the cause of

action arose wholly in Mumbai and the courts in Delhi have no

jurisdiction.

V. The trial court, vide order dated 17

th

April, 2021, answered the

preliminary issue as to whether it had jurisdiction to try the suit

and held that the exclusive jurisdiction clause did not fully oust the

jurisdiction of the courts in Delhi.

VI. Dissatisfied with the order of the trial court, HDFC Bank filed the

civil revisional application before the Delhi High Court which, as

noted above, stands dismissed.

THE IMPUGNED JUDGMENTS

5. The impugned judgment in the lead appeal, after condoning the delay in

filing of the civil revisional application, allowed the same on the ground

that courts in Patna do not have the jurisdiction in light of the exclusive

jurisdiction clause and that such a clause would operate in matters of

9

Civil Suit No. 1164 of 2017

5

termination of service too. Relying on the decision of the Supreme Court

in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd.

10

, the Patna High

Court observed that while the general principle is that the suit could be

instituted at any place where a substantial part of the cause of action

arises, however, when a clause such as the one in the instant case exists,

the jurisdiction will lie with the court at the place which has been

expressly agreed to by and between the parties, i.e., the courts in

Bombay in the instant case.

6. The impugned judgment and order in the connected appeal dismissed

the civil revisional application on the ground that Deepti was residing in

Delhi, was working in Rohini, Delhi and the termination letter was served

upon her in Delhi and that the exclusive jurisdiction cl ause in the

employment agreement did not oust the jurisdiction of the courts in

Delhi. The learned Judge relied on the decision of a coordinate Bench of

the Delhi High Court in Vishal Gupta v. L & T Finance

11

while declining

to grant relief to HDFC Bank in exercise of revisional jurisdiction.

THE QUESTION

7. The pure question of law arising for decision on these appeals is, whether

the civil suits could have been instituted in courts in Patna and Delhi by

Rakesh and Deepti, respectively, in view of the specific clause(s) in the

appointment letter/employment agreement that the courts in Mumbai

would have exclusive jurisdiction to decide disputes by and between the

contracting parties?

10

(2013) 9 SCC 32

11

2009 SCC OnLine Delhi 2806

6

ANALYSIS AND REASONS

8. Before we proceed to appreciate the rival claims, it would be appropriate

to notice the applicable legal regime.

9. Section 28 of the Indian Contract Act, 1872

12

ordains:

28. Agreements in restraint of legal proceedings, void. — Every

agreement,—

(a) by which any party thereto is restricted absolutely from enforcing his

rights under or in respect of any contract, by the usual legal proceedings

in the ordinary tribunals, or which limits the time within which he may

thus enforce his rights; or

(b) which extinguishes the rights of any party thereto, or discharges any

party thereto, from any liability, under or in respect of any contract on

the expiry of a specified period so as to restrict any party from enforcing

his rights, is void to the extent.

…”

10. It is also important to refer to Section 20 of the CPC which is reproduced

hereunder:

20. Other suits to be instituted where defendants reside or cause

of action arises. — Subject to the limitations aforesaid, every suit shall

be instituted in a Court within the local limits of whose jurisdiction—

(a) the defendant, or each of the defendants where there are more than

one, at the time of the commencement of the suit, actually and

voluntarily resides, or carries on business, or personally works for gain;

or

(b) any of the defendants, where there are more than one, at the time

of the commencement of the suit, actually and voluntarily resides, or

carries on business, or personally works for gain, provided that in such

case either the leave of the Court is given, or the defendants who do not

reside, or carry on business, or personally works for gain, as aforesaid,

acquiesce in such institution; or

(c) The cause of action, wholly or in part, arises.

Explanation. —A corporation shall be deemed to carry on business at its

sole or principal office in India or, in respect of any cause of action arising

at any place where it has also a subordinate office, at such place.

11. This is the umpteenth time that this Court has been called upon to deal

with a clause in contracts restricting adjudication of disputes exclusively

to the jurisdiction of a court of a party’s choice, not disagreed by the

12

Contract Act

7

other party

13

. In fact, the principles pertaining to institution of suits and

the jurisdiction of the courts in a case where the parties have by

agreement, conferred jurisdiction on courts at a particular place, have

been laid down by this Court in numerous cases which are entirely

consistent and have not required a relook. A perusal of a couple of these

decisions may not be inapt for a proper decision on these appeals.

12. This Court in Hakam Singh v. Gammon (India) Ltd.

14

held that:

4. The Code of Civil Procedure in its entirety applies to proceedings

under the Arbitration Act. The jurisdiction of the courts under the

Arbitration Act to entertain a proceeding for filing an award is accordingly

governed by the provisions of the Code of Civil Procedure. By clause 13

of the agreement it was expressly stipulated between the parties that

the contract shall be deemed to have been entered into by the parties

concerned in the city of Bombay. In any event the respondents have

their principal office in Bombay and they were liable in respect of a cause

of action arising under the terms of the tender to be sued in the courts

at Bombay. It is not open to the parties by agreement to confer by their

agreement jurisdiction on a Court which it does not possess under the

Code. But where two courts or more have under the Code of Civil

Procedure jurisdiction to try a suit or proceeding an agreement between

the parties that the dispute between them shall be tried in one of such

Courts is not contrary to public policy. Such an agreement does not

contravene Section 28 of the Contract Act.

(emphasis supplied)

13. A decade later, another coordinate Bench had the occasion to deal with

a similar exclusive jurisdiction clause in Globe Transport

Corpn. v. Triveni Engg. Works

15

. One sentence in p aragraph 3

captures the essence of the law, reading as follows:

3. It is now settled law that it is not competent to the parties by

agreement to invest a court with jurisdiction which it does not otherwise

possess but if there are more than one forums where a suit can be filed,

it is open to the parties to select a particular forum and exclude the other

13

exclusive jurisdiction clause

14

(1971) 1 SCC 286

15

(1983) 4 SCC 707

8

forums in regard to claims which one party may have against the other

under a contract. …

14. A few years later came the decision in A.B.C. Laminart Pvt. Ltd. v.

A.P. Agencies, Salem

16

. This Court held that:

21. From the foregoing decisions it can be reasonably deduced that

where such an ouster clause occurs, it is pertinent to see whether there

is ouster of jurisdiction of other courts. When the clause is clear,

unambiguous and specific accepted notions of contract would bind the

parties and unless the absence of ad idem can be shown, the other courts

should avoid exercising jurisdiction. As regards construction of the

ouster clause when words like “alone”, “only”, “exclusive” and the like

have been used there may be no difficulty. Even without such words in

appropriate cases the maxim “expressio unius est exclusio alterius” —

expression of one is the exclusion of another — may be applied. What is

an appropriate case shall depend on the facts of the case. In such a case

mention of one thing may imply exclusion of another. When certain

jurisdiction is specified in a contract an intention to exclude all others

from its operation may in such cases be inferred. It has therefore to be

properly construed.

15. In Swastik Gases (P) Ltd. (supra), a three-judge Bench of this Court

succinctly articulated the purport of an exclusive jurisdiction clause in

any contract in the following words:

32. For answer to the above question, we have to see the effect of the

jurisdiction clause in the agreement which provides that the agreement

shall be subject to jurisdiction of the courts at Kolkata. It is a fact that

whilst providing for jurisdiction clause in the agreement the words like

“alone”, “only”, “exclusive” or “exclusive jurisdiction” have not been used

but this, in our view, is not decisive and does not make any material

difference. The intention of the parties—by having Clause 18 in the

agreement—is clear and unambiguous that the courts at Kolkata shall

have jurisdiction which means that the courts at Kolkata alone shall have

jurisdiction. It is so because for construction of jurisdiction clause, like

Clause 18 in the agreement, the maxim expressio unius est exclusio

alterius comes into play as there is nothing to indicate to the contrary.

This legal maxim means that expression of one is the exclusion of

another. By making a provision that the agreement is subject to the

jurisdiction of the courts at Kolkata, the parties have impliedly excluded

the jurisdiction of other courts. Where the c ontract specifies the

jurisdiction of the courts at a particular place and such courts have

jurisdiction to deal with the matter, we think that an inference may be

drawn that parties intended to exclude all other courts. A clause like this

16

(1989) 2 SCC 163

9

is not hit by Section 23 of the Contract Act at all. Such clause is neither

forbidden by law nor it is against the public policy. It does not offend

Section 28 of the Contract Act in any manner.

(emphasis supplied)

16. There are multiple other decisions of this Court upholding similar

exclusive jurisdiction clauses. The decisions in Patel Roadways Ltd. v.

Prasad Trading Co.

17

, Angile Insulations v. Davy Ashmore India

Ltd.

18

, New Moga Transport Co. v. United India Insurance Co.

Ltd.

19

, Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia

20

,

Rajasthan SEB v. Universal Petrol Chemicals Ltd.

21

and A.V.M.

Sales Corpn. v. Anuradha Chemicals (P) Ltd.

22

are some of them

providing ample guidance in this behalf.

17. The issue as to how an exclusive jurisdiction clause has to be read and

understood is, thus, no longer res-integra.

18. A bare perusal of the above decisions leads to the conclusion that for an

exclusive jurisdiction clause to be valid, it should be (a) in consonance

with Section 28 of the Contract Act, i.e., it should not absolutely restrict

any party from initiating legal proceedings pertaining to the contract, (b)

the Court that has been given exclusive jurisdiction must be competent

to have such jurisdiction in the first place, i.e., a Court not having

jurisdiction as per the statutory regime cannot be bestowed jurisdiction

by means of a contract and, finally, (c) the parties must either impliedly

17

(1991) 4 SCC 270

18

(1995) 4 SCC 153

19

(2004) 4 SCC 677

20

(2005) 10 SCC 704

21

(2009) 3 SCC 107

22

(2012) 2 SCC 315

10

or explicitly confer jurisdiction on a specific set of courts. These three

limbs/criteria have to be mandatorily fulfilled.

19. Swastik Gases (P) Ltd. (supra) is wholly applicable to the facts at

hand, and being a larger Bench decision, binds us.

20. However, in none of the precedents of this Court, noticed above, did an

service/employment contract fell for consideration. According to Mr.

Deshmukh and Mr. Chaturvedi, learned counsel for Rakesh and Deepti,

respectively, the decision in Vishal Gupta (supra) correctly explains the

legal position vis-à-vis service/employment contracts and, therefore,

this Court may consider accepting the forward-looking posture and

practical view expressed by the learned Judge. It has been contended

that in an unequal battle between the mighty lion (employer) and the

timid rabbit (employee), where the dice is heavily loaded from the

inception against the employee, no further embargo ought to be placed

in his/her pursuit for justice by pinning him/her down to the courts in

the city (Mumbai) mentioned in the appointment letter/employment

agreement.

21. At this stage, it would be appropriate to glance through a legal position

having a bearing on these appeals. There is a gulf of difference between

a public service and a service contract with a private employer. The

origin of government service is contractual. There is an offer and

acceptance in every case. But once appointed to his post or office, the

government servant acquires a status and his rights and obligations are

no longer determined by the consent of bo th the parties, but by the

11

statute or statutory rules as framed. In other words, the legal position

of a government servant is more one of status than that of contract. A

government servant may not be tied down by his employer to a court at

a particular place, should a dispute arise for adjudication by a law court.

Articles 14, 16 and 21 could stand in the way. On the other hand, service

in the private sector is governed by the terms of the employment

contract entered into by and between the parties inter-se. Like any other

contract, even in an employment contract, a concluded contract pre-

supposes the existence of at least two parties with mutual rights and

obligations. Once a concluded contract comes into existence, it is

axiomatic that such rights and obligations of the parties are governed by

the terms and conditions thereof. Since there is a prior meeting of minds

of the contracting parties, their intentions have to be gathered from the

contract (appointment letter/employment agreement , here) and looking

at the same, it can safely be inferred that the contracting parties were

ad idem on the terms of the appointment letter/employment agreement

which specified courts in Mumbai exclusively as the situs of dispute

resolution.

22. Nowadays, the private sector employs individuals pan-India for providing

services to reach people in the last mile. Therefore, it may not be

possible for all employers in the private sector to contest suits at far-off

places from the registered office. This seems to be the overwhelming

reason why exclusion clauses are inserted. Rakesh and Deepti having

accepted the terms and conditions of the appointment

12

letter/employment agreement and acted upon its terms by joining their

respective posts, they could not have possibly avoided the contract on a

second thought that a term contained therein may not be beneficial for

them at a subsequent stage.

23. As long as an employment contract does not offend the provisions of any

applicable legislation, such as the Contract Act or the CPC, ordinarily,

there should be no reason to interfere. It cannot but be gainsaid that the

scope of interference, in such matters, is quite narrow.

24. The contention on behalf of Rakesh and Deepti that the decisions

referred to above would not be applicable in the case of a service

contract has not really impressed us. A contract – be it commercial,

insurance, sales, service, etc. – is after all a contract. It is a legally

binding agreement, regardless of the parties involved or their inter se

strengths. To make a distinction for employment contracts on the

specious ground that a mighty lion and a timid rabbit are the contracting

parties would violate the principle of equality, in the sense that rights

and liabilities would not be dependent on the parties’ status, power or

influence. Contracts should be treated equally, without bias or

distinction. The fact that one party is more powerful or influential (the

mighty lion) and the other more vulnerable (the timid rabbit) does not

justify making exceptions or distinctions in the application of contractual

principles.

25. We may also emphasize that unequal bargaining power is not unique to

contracts of personal service. In many areas, such as business,

13

commerce, or real estate, contracts may involve parties with dissimilar

levels of strength, resources or negotiating power. As and by way of

illustration, we can cite instances where big builders sub-contract a part

of the development work entrusted to them to sub-contractors. Such

contracts too involve the mighty lion and, though not a timid rabbit, but

a weak lamb. Based on the status of the parties, the latter cannot escape

from the consequences if the former seeks to enforce a condition in the

contract which the latter perceives is oppressive or the latter, refusing

to perform any of its obligations considering it as onerous faces a law

suit for breach of contract.

26. Law treats all contracts with equal respect and unless a contract is

proved to suffer from any of the vitiating factors, the terms and

conditions have to be enforced regardless of the relative strengths and

weakness of the parties.

27. Thus, we are unable to approve the law laid down in Vishal Gupta

(supra).

28. Upon a perusal of the service contract and the exclusive jurisdiction

clause under consideration in the instant appeals, we are convinced that

the Patna High Court has offered a sound legal opinion with reference to

the facts at hand while the Delhi High Court has erred in dismissing the

civil revisional application placing entire reliance on the decision in

Vishal Gupta (supra). All the three applicable mandatory criteria to hold

that the clause is valid have been fulfilled in the instant appeals. We

propose to assign brief reasons for each of the applicable limbs.

14

29. First, Section 28 of the Contract Act does not bar exclusive jurisdiction

clauses. What has been barred is the absolute restriction of any party

from approaching a legal forum. The right to legal adjudication cannot

be taken away from any party through contract but can be relegated to

a set of Courts for the ease of the parties. In the present dispute, the

clause does not take away the right of the employee to pursue a legal

claim but only restricts the employee to pursue those claims before the

courts in Mumbai alone.

30. Secondly, the Court must already have jurisdiction to entertain such a

legal claim. This limb pertains to the fact that a contract cannot confer

jurisdiction on a court that did not have such a jurisdiction in the first

place. The explanation to Section 20 of the CPC is essential to decide

this issue. In the instant case, considering that the decision to employ

Rakesh and Deepti were taken in Mumbai , the appointment letter in

favour of Rakesh was issued from Mumbai, the employment agreement

was dispatched from Mumbai, the decision to terminate the services of

Rakesh and Deepti were taken in Mumbai and the letters of termination

were dispatched from Mum bai, we are convinced that the courts in

Mumbai do have jurisdiction.

31. Lastly, the clause in the contract has clearly and explicitly barred the

jurisdiction of all other courts by using the word “exclusive”. A profitable

reference may be made to the extract of ABC Laminart (supra)

reproduced above.

15

RELIEF

32. HDFC Bank is, thus, justified in its claim that the suits ought to have

been instituted in an appropriate court in Mumbai.

33. We hasten to observe that the Patna High Court, while correctly holding

in favour of HDFC Bank on the point of law, has committed a

fundamental error. It has allowed the application of HDFC Bank under

Order VII, Rule 11 of the CPC meaning thereby the plaint stands

rejected. Since the courts in Mumbai have the jurisdiction to decide the

dispute raised by Rakesh and his plaint is not otherwise liable to rejection

on attraction of any of the clauses of Rule 11, the proper course for the

Patna High Court would have been to direct return of the plaint by the

trial court under Order VII, Rule 10 of the CPC to Rakesh for its

presentation before the competent court in Mumbai. While directing the

trial court to return the plaint to Rakesh and to make the necessary

endorsement in terms of sub-rule (2) of Rule 10, we grant him the liberty

to present such plaint in the competent court in Mumbai.

34. If Rakesh wishes to institute a fresh suit in a competent court in Mumbai,

in such a case he need not take back the plaint but may have the suit

instituted by him withdrawn.

35. Insofar as the suit instituted by Deepti too is concerned, the plaint has

to be returned to her for presentation in a court in Mumbai. In the

alternative, she may have her pending suit withdrawn and file a fresh

suit in a competent court in Mumbai.

16

36. We have also noticed from the pleadings and prayers made in the

respective plaints by Rakesh and Deepti that the same are defective. We

grant them liberty to seek amendment of their respective plaints. If

applications in this behalf are made, the trial courts may, in their

discretion, allow the prayers therein. If fresh suits are instituted, this

liberty would cease to operate.

37. If fresh suits are instituted, Rakesh and Deepti may plead in their plaints

the grounds on which exemption from the law of limitation is claimed in

terms of Order VII, Rule 6 of the CPC.

CONCLUSION

38. The impugned judgment and order of the Patna High Court is affirmed

to the extent mentioned above and the lead appeal is dismissed. The

connected appeal, however, stands allowed and the impugned judgment

and order of the Delhi High Court is set aside.

39. We clarify that the merits of the disputes have not been examined and

all points are left open.

40. No order as to costs.

………………………………J .

(DIPANKAR DATTA)

………………………………J .

(MANMOHAN)

NEW DELHI;

APRIL 08, 2025.