A valid exclusive-jurisdiction clause ousts other competent courts where the chosen forum has a cause-of-action nexus.

The plaintiffs sought interim restraint against the transfer of 1,45,833 shares in Rehber Food Industries Pvt. Ltd. from Defendant No. 1 to Defendant No. 2.

They alleged that the transfer, and an earlier transfer of the same shares from Defendant No. 3 to Defendant No. 1, breached a Memorandum of Understanding (MoU) dated 12 December 2022, which required specified consent and offered Rehber Group members priority to purchase shares.

The defendants objected that Clause 10 of the MoU conferred exclusive jurisdiction on courts at Bareilly, Uttar Pradesh.

Before considering the application for interim relief, the Court addressed that territorial-jurisdiction objection.

Whether Clause 10 of the MoU excluded the Delhi High Court’s territorial jurisdiction over the suit, whose reliefs were substantially founded on the MoU

Whether the defendants were precluded, under the doctrine of approbate and reprobate, from relying on the MoU’s jurisdiction clause in light of their position in earlier suits

Section 20(a) CPC recognises jurisdiction where a defendant resides or carries on business, while Section 20(c) concerns where the cause of action arises; parties may, by agreement, select one among courts that otherwise have jurisdiction and exclude the others, but cannot confer jurisdiction on a court that otherwise lacks it.

Order VII Rule 10 CPC provides for return of a plaint for presentation to the proper court.

The Court also relied on Asma Lateef v. Shabbir Ahmad, 2024 SCC OnLine SC 42, for the need to address the court’s competence before proceeding to the merits.

The doctrine of approbate and reprobate bars a party from accepting and rejecting the same transaction or instrument to obtain inconsistent advantages; the Court considered, but found the doctrine inapplicable on the facts.

The Court found that the material prayers—including declarations of invalidity and mandatory relief—depended on alleged breaches of the MoU.

It held that the earlier suits did not establish that the defendants had approbated and reprobated: Defendant No. 2 was not a party to the first suit, which was not based on the MoU, and had objected to territorial jurisdiction in the second suit; Defendant No. 1 was party to neither suit.

Although Defendant No. 1’s location brought the suit within Section 20(a) CPC, the Court held that Clause 10 selected Bareilly as the exclusive forum.

It considered Bareilly connected to the dispute because the MoU was executed there, Defendant No. 3 was located there, and the earlier share-transfer transaction was executed there.

Since the challenge to the later transfer was interlinked with the earlier transaction and the MoU, the Court concluded that Clause 10 applied to the suit.

It disposed of the interim-injunction application without deciding its merits and vacated any earlier interim arrangement or order.

All questions concerning the merits, including fraud, collusion, breach, liability and the MoU’s validity, were left open.