Holding

An exclusive jurisdiction clause in an employment contract is valid and bars other courts from exercising jurisdiction, provided the designated court has jurisdiction under the CPC and the clause does not absolutely prohibit a party from seeking legal redress.

Summary

Rakesh Kumar Verma and Deepti were employees of HDFC Bank whose appointment letters contained an exclusive jurisdiction clause stating that any dispute would be decided by the courts in Bombay. Both were terminated for alleged fraud and filed civil suits in Patna and Delhi respectively challenging the termination. HDFC Bank moved petitions under Order VII Rule 11 of the CPC seeking rejection of the plaints, arguing that the exclusive jurisdiction clause made Mumbai courts the only proper forum; the trial courts rejected the petitions, leading to revisional applications. The Patna High Court allowed the revisional application, while the Delhi High Court dismissed the similar application, creating a conflict. The Supreme Court examined the validity of exclusive jurisdiction clauses under Section 28 of the Contract Act, Section 20 of the CPC, and prior jurisprudence, holding that such clauses are enforceable provided they do not absolutely bar a party from seeking relief and the designated court has jurisdiction. It affirmed the Patna High Court’s view that the suits should be filed in Mumbai and directed the lower courts to return the plaints for re‑filing there, while setting aside the Delhi High Court’s order. The lead appeal was dismissed and the connected appeal allowed; no costs were awarded.

Issues considered

Whether an exclusive jurisdiction clause in an employment contract is valid under Section 28 of the Indian Contract Act, 1872.
Whether the courts in Patna and Delhi have jurisdiction to entertain the suits despite the exclusive jurisdiction clause.
Whether the exclusive jurisdiction clause ousts the jurisdiction of other courts under the Code of Civil Procedure, 1908.
Whether a petition under Order VII Rule 11 of the CPC for rejection of a plaint is appropriate when an exclusive jurisdiction clause exists.

Legislation cited

Code of Civil Procedure, 1908s. 20, s. Order VII Rule 10, s. Order VII Rule 11, s. Order VII Rule 6
Contract Act, 1872s. 28

Headnote

Issue for Consideration Issue arose whether civil suits could have been instituted in courts in Patna and Delhi by employees in view of the specific clauses in the appointment letter that courts in Mumbai would have exclusive jurisdiction to decide disputes by and between the contracting parties. s.28 – Agreements in restraint of legal proceedings – Exclusive jurisdiction of courts – Appointment of two employees by the respondent Bank, one in Patna and other in Delhi and exclusive jurisdiction clause in the appointment letter that the courts in Mumbai will have

Subjects

Rejection of plaintReturn of plaintExclusive jurisdiction of courtsAgreement in restraint of legal proceedingsContract of serviceEmployment agreementSitus of dispute resolutionBarring of jurisdictionRight of the employee to pursue a legal claimExclusive jurisdiction clause in the appointment letter/employment agreementTermination of serviceAllegations of fraud and misconductRevisional application

Judgment

[2025] 5 S.C.R. 78 : 2025 INSC 473

Rakesh Kumar Verma
v.
HDFC Bank Ltd.
(Civil Appeal No. 2282 of 2025)
08 April 2025
[Dipankar Datta* and Manmohan, JJ.]

Issue for Consideration
Issue arose whether civil suits could have been instituted in courts
in Patna and Delhi by employees in view of the specific clauses in
the appointment letter that courts in Mumbai would have exclusive
jurisdiction to decide disputes by and between the contracting
parties.

Headnotes†
Contract Act, 1872 – s.28 – Agreements in restraint of legal
proceedings – Exclusive jurisdiction of courts – Appointment of
two employees by the respondent Bank, one in Patna and other
in Delhi and exclusive jurisdiction clause in the appointment
letter that the courts in Mumbai will have jurisdiction with
regard to any dispute – Termination of the service of both
the employees due to allegations of fraud and misconduct –
Employee appointed in Patna, instituted civil suit in Patna –
Thereafter, the Bank filed petition u/Ord. 7 r.11 for rejection of
the plaint since the courts in Mumbai had jurisdiction and not
the court where the suit was instituted – Trial court dismissed
the same – Revisional application thereagainst by the bank,
allowed by the Patna High Court – In case of the suit filed by
the employee appointed in Delhi challenging the termination,
the trial court in Delhi held that jurisdiction clause did not fully
oust the jurisdiction of courts in Delhi – Revisional application
by the Bank, dismissed by the Delhi High Court – Correctness:
Held: Bank justified in its claim that suits ought to have been
instituted in Mumbai – Upon a perusal of the service contract and
the exclusive jurisdiction clause, the Patna High Court offered a
sound legal opinion while the Delhi High Court erred in dismissing
the revisional application – For an exclusive jurisdiction clause
* Author
[2025] 5 S.C.R. 79

Rakesh Kumar Verma v. HDFC Bank Ltd.

to be valid, it should be in consonance with s.28, it should not
absolutely restrict any party from initiating legal proceedings
pertaining to the contract; the Court given exclusive jurisdiction
must be competent to have such jurisdiction; and the parties must
either impliedly or explicitly confer jurisdiction on a specific set of
courts – 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 – As long
as an employment contract does not offend the provisions of any
applicable legislation there should be no reason to interfere – 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 – Exclusive jurisdiction 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 – Courts in Mumbai did have jurisdiction –
Clause in the contract clearly and explicitly barred the jurisdiction
of all other courts by using the word “exclusive” – Impugned
judgment of the Delhi High Court set aside and that of the Patna
High Court affirmed to the extent stated – Patna High Court, while
correctly holding in favour of Bank on the point of law, committed
a fundamental error by allowing the application of the Bank u/
Ord. VII, r.11 CPC that the plaint stands rejected – Proper course
for the Patna High Court would have been to direct return of the
plaint by the trial court u/Ord.7 r.10 for its presentation before the
competent court in Mumbai – Code of Civil Procedure, 1908 – O.7
r.11. [Paras 18, 21, 23, 26, 29-33, 38]

Case Law Cited
Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd [2013] 7 SCR
581 : (2013) 9 SCC 32 – relied on.
Vishal Gupta v. L & T Finance, 2009 SCC OnLine Delhi 2806 –
disapproved.
Hakam Singh v. Gammon (India) Ltd. [1971] 3 SCR 314 : (1971) 1
SCC 286; Globe Transport Corpn. v. Triveni Engg. Works (1983) 4
SCC 707; A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem [1989] 2
SCR 1 : (1989) 2 SCC 163; Patel Roadways Ltd. v. Prasad Trading
Co. [1991] 3 SCR 391 : (1991) 4 SCC 270; Angile Insulations v.
80 [2025] 5 S.C.R.

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Davy Ashmore India Ltd. [1995] 3 SCR 443 : (1995) 4 SCC 153;
New Moga Transport Co. v. United India Insurance Co. Ltd. [2004]
Supp. 1 SCR 623 : (2004) 4 SCC 677; Shree Subhlaxmi Fabrics
(P) Ltd. v. Chand Mal Baradia [2005] 2 SCR 1138 : (2005) 10
SCC 704; Rajasthan SEB v. Universal Petrol Chemicals
Ltd. [2009] 1 SCR 138 : (2009) 3 SCC 107; A.V.M. Sales
Corpn. v. Anuradha Chemicals (P) Ltd. [2012] 1 SCR 318 :
(2012) 2 SCC 315 – referred to.

List of Acts
Contract Act, 1872; Code of Civil Procedure, 1908.

List of Keywords
Rejection of plaint; Return of plaint; Exclusive jurisdiction of courts;
Agreement in restraint of legal proceedings; Contract of service;
Employment agreement; Situs of dispute resolution; Barring of
jurisdiction; Right of the employee to pursue a legal claim; Exclusive
jurisdiction clause in the appointment letter/employment agreement;
Termination of service; Allegations of fraud and misconduct;
Revisional application.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2282 of 2025
From the Judgment and Order dated 25.01.2022 of the High Court
of Judicature at Patna in CR No. 23 of 2020
With
Civil Appeal No. 2286 of 2025

Appearances for Parties
Advs. for the Appellant:
Narender Hooda, Sr. Adv., Rishab Raj Jain, Ms. Kajal Sharma,
Grijesh Kumar, Ms. Amiti Gupta, Udayan Jain, Sonal Jain, Sandeep
S Deshmukh, Vatsalya Vigya, Pradeep Kumar Tripathi.
Advs. for the Respondent:
Narender Hooda, Sr. Adv., G.S. Chaturvedi, Shantanu Chatuervedi,
Ms. Priyanka Tyagi, Surya Kant, Rishab Raj Jain, Ms. Kajal Sharma,
Grijesh Kumar, Ms. Amiti Gupta, Udayan Jain, Sonal Jain.
[2025] 5 S.C.R. 81

Rakesh Kumar Verma v. HDFC Bank Ltd.

Judgment / Order of the Supreme Court

Judgment

Dipankar Datta, J.

The Challenge

1. In the lead appeal1, Rakesh has called in question the judgment and
order of the High Court of Judicature at Patna2 dated 25th January,
2022, allowing a civil revisional application3 filed by HDFC Bank.
2. In the connected appeal4, HDFC Bank has taken exception to the
judgment and order of the High Court of Delhi5 dated 12th November,
2011, dismissing its civil revisional application6.

The Facts
3. The lead appeal rests on a simple set of facts, which are as follows:
I. Vide letter dated 24th 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 28th August, 2016 due to
allegations of fraud and misconduct.

1 Civil Appeal No. 2282/2025
2 Patna High Court, hereafter
3 Civil Revision No. 23 of 2020
4 Civil Appeal No. 2286/2025
5 Delhi High Court, hereafter
6 Civil Revision Petition No. 79/2021
82 [2025] 5 S.C.R.

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IV. Aggrieved thereby, Rakesh instituted a civil suit7 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 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, 19088 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 14th 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 23rd March, 2009, Deepti was appointed as an officer in
the Retail Banking Branch at Janak Puri, Delhi. This agreement

7 Title Suit No. 212 of 2017
8 CPC
[2025] 5 S.C.R. 83

Rakesh Kumar Verma v. HDFC Bank Ltd.

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.
II. Service of Deepti was terminated on 31st May, 2017, also due
to allegations of fraud and misconduct.
III. Aggrieved thereby, Deepti instituted a civil suit9 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 17th 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 termination of service too. Relying on the decision of
the Supreme Court in Swastik Gases (P) Ltd. v. Indian Oil Corpn.

9 Civil Suit No. 1164 of 2017
84 [2025] 5 S.C.R.

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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 clause 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 Finance11
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?

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, 187212 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,

10 (2013) 9 SCC 32
11 2009 SCC OnLine Delhi 2806
12 Contract Act
[2025] 5 S.C.R. 85

Rakesh Kumar Verma v. HDFC Bank Ltd.

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 other party.13 In fact, the principles pertaining

13 exclusive jurisdiction clause
86 [2025] 5 S.C.R.

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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 paragraph 3
captures the essence of the law, reading as follows:

14 (1971) 1 SCC 286
15 (1983) 4 SCC 707
[2025] 5 S.C.R. 87

Rakesh Kumar Verma v. HDFC Bank Ltd.

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 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

16 (1989) 2 SCC 163
88 [2025] 5 S.C.R.

Supreme Court Reports

“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 contract 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 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 (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
[2025] 5 S.C.R. 89

Rakesh Kumar Verma v. HDFC Bank Ltd.

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 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 both the parties, but by the 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
90 [2025] 5 S.C.R.

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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
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
[2025] 5 S.C.R. 91

Rakesh Kumar Verma v. HDFC Bank Ltd.

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,
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.
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
92 [2025] 5 S.C.R.

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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 Mumbai, 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.

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.
[2025] 5 S.C.R. 93

Rakesh Kumar Verma v. HDFC Bank Ltd.

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.
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.

Result of the Case: Matters disposed of.

†
Headnotes prepared by: Nidhi Jain