Rakesh Kumar Verma vs. Hdfc Bank Ltd.

REPORTABLE
2025 INSC 473
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.

HE HALLENGE
T C
1
1. In the lead appeal , Rakesh has called in question the judgment and
2 th
order of the High Court of Judicature at Patna dated 25 January, 2022,
3
allowing a civil revisional application filed by HDFC Bank.
Signature Not Verified
Digitally signed by
rashmi dhyani pant
Date: 2025.04.08
18:29:40 IST
Reason:

1
Civil Appeal No. 2282/2025
2
Patna High Court, hereafter
3
Civil Revision No. 23 of 2020
1


4
2. In the connected appeal , HDFC Bank has taken exception to the
5 th
judgment and order of the High Court of Delhi dated 12 November,
6
2011, dismissing its civil revisional application .
T HE F ACTS
3. The lead appeal rests on a simple set of facts, which are as follows:
th
I. Vide letter dated 24 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.”

th
III. Service of Rakesh was terminated on 28 August, 2016 due to
allegations of fraud and misconduct.
7
IV. Aggrieved thereby, Rakesh instituted a civil suit 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
2


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
8
VII, Rule 11 of the Code of Civil Procedure, 1908 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
th
court, vide order dated 14 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
rd
dated 23 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
3


st
II.
Service of Deepti was terminated on 31 May, 2017, also due to
allegations of fraud and misconduct.
9
III. Aggrieved thereby, Deepti instituted a civil suit 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.
th
V. The trial court, vide order dated 17 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.
T HE I MPUGNED J UDGMENTS
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
4


termination of service too. Relying on the decision of the Supreme Court
10
in Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. , 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
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the Delhi High Court in Vishal Gupta v. L & T Finance while declining
to grant relief to HDFC Bank in exercise of revisional jurisdiction.
T HE Q UESTION
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
5


NALYSIS AND EASONS
A R
8. Before we proceed to appreciate the rival claims, it would be appropriate
to notice the applicable legal regime.
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9. Section 28 of the Indian Contract Act, 1872 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
6


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other party . 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.
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12. This Court in Hakam Singh v. Gammon (India) Ltd. 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
15
Corpn. v. Triveni Engg. Works . One sentence in paragraph 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
7


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.
16
A.P. Agencies, Salem . 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 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

16
(1989) 2 SCC 163
8

exclusive jurisdiction clauses. The decisions in Patel Roadways Ltd. v.
17
Prasad Trading Co. , Angile Insulations v. Davy Ashmore India
18
Ltd. , New Moga Transport Co. v. United India Insurance Co.
19 20
Ltd. , Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia ,
21
Rajasthan SEB v. Universal Petrol Chemicals Ltd. and A.V.M.
22
Sales Corpn. v. Anuradha Chemicals (P) Ltd. 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
9


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
10


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
11


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,
12


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.
13


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 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.

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ELIEF
R
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.
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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.
ONCLUSION
C
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.


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