An exclusive jurisdiction clause operates only where the chosen court independently possesses jurisdiction under Section 20 CPC.

The plaintiff, an autonomous body under the Ministry of Health and Family Welfare, engaged Indian Bank to facilitate online collection of examination and other fees.

Indian Bank, in turn, obtained the defendant’s payment-gateway services through Tripartite Agreements dated 21.04.2014 and 05.03.2019 (“First Agreement” and “Second Agreement”).

The plaintiff alleged that transaction charges payable for each online payment were required to be recovered from candidates, but that the defendant instead deducted those charges from the amounts collected and payable to the plaintiff.

The plaintiff sought recovery of ₹4,79,74,785, representing deductions allegedly made between October 2014 and May 2019, with pendente lite and future interest.

The defendant objected that: (i) the Delhi High Court lacked territorial jurisdiction because Clause 19.1 of the Second Agreement conferred exclusive jurisdiction on the courts at Chennai; and (ii) the suit was barred by limitation under Article 24 of the Limitation Act, 1963.

The plaintiff disputed both objections, asserting that the agreements were executed at Delhi, the defendant carried on business there, the collections were credited to the plaintiff’s account in New Delhi, and the deductions were discovered during reconciliation at Delhi.

Whether the Delhi High Court lacked territorial jurisdiction because Clause 19.1 of the Second Agreement conferred exclusive jurisdiction on the courts at Chennai?

Whether the suit, or any part of the plaintiff’s claim, was barred by limitation under Article 24 of the Limitation Act, 1963?

Whether the objections relating to territorial jurisdiction and limitation could be conclusively determined at the threshold or as preliminary issues?

Under Section 20 CPC, parties cannot confer jurisdiction by agreement upon a court that otherwise lacks jurisdiction; however, where two or more courts possess jurisdiction, an agreement selecting one of them and excluding the others is valid, as held in Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286.

A.B.C. Laminart (P) Ltd. v. A.P. Agencies, (1989) 2 SCC 163 similarly establishes that an exclusive-jurisdiction clause operates only where the chosen court is otherwise a proper forum under law.

On a demurrer, territorial jurisdiction is assessed on the assumption that the plaint’s material averments are true, as held in Exphar SA v. Eupharma Laboratories Ltd., (2004) 3 SCC 688.

Under Order XIV Rule 2 CPC, a preliminary issue may be tried first only where it is a pure issue of law capable of disposing of the suit; mixed questions of law and fact cannot ordinarily be decided as preliminary issues, as explained in Nusli Neville Wadia v. Ivory Properties, (2020) 6 SCC 557 and S.S. Khanna v. F.J. Dillon.

The limitation objection involved Article 24 of the Limitation Act, 1963, concerning money received, as well as the factual determination of the accrual, continuity and discoverability of the alleged breaches.

On territorial jurisdiction, the Court accepted that the plaint pleaded several Delhi-connected facts: execution of the agreements at Delhi, the defendant’s office and business in Delhi, credit of collections to the plaintiff’s account in New Delhi, and discovery of the deductions during reconciliation at Delhi.

These averments, presumed true at the demurrer stage under Exphar SA, disclosed that at least part of the cause of action arose in Delhi.

The defendant’s contrary assertions concerning its Chennai branch, routing of collections, and performance of contractual obligations at Chennai were disputed matters requiring evidence.

Consequently, Clause 19.1 could not conclusively oust Delhi jurisdiction unless Chennai was first shown to be a competent forum under Section 20 CPC; that question was itself factual and remained unresolved.

On limitation, the parties disputed both the legal starting point and the underlying facts.

The defendant contended that limitation ran from each deduction or receipt between October 2014 and May 2019 under Article 24, whereas the plaintiff asserted that the cause of action arose only in June 2019 when the deductions were discovered through reconciliation and audit.

Determination required examining the parties’ contractual arrangement, including the defendant’s obligation to furnish settlement information, whether the deductions were concealed or reasonably discoverable earlier, and whether the alleged breaches constituted a continuing wrong or separate completed breaches.

Since both objections involved mixed questions of law and fact, they could not be finally decided at the threshold or as preliminary issues under Order XIV Rule 2 CPC.

It held that the effect of Clause 19.1 depended on whether Chennai was otherwise a competent forum under Section 20 CPC, a mixed question requiring evidence; an appropriate jurisdiction issue was directed to be framed and decided after trial.

The Court also declined to reject or dismiss the suit as time-barred at the preliminary stage.

The limitation objection was kept open because the accrual of the cause of action, the character of the alleged breaches, the possibility of a continuing wrong, and the applicable exclusion periods required factual adjudication.

The Court clarified that it had expressed no opinion on the merits of either objection or of the suit, and that the defendant’s participation did not waive its objections.

Pleadings were directed to be completed, and the matter was listed before the Joint Registrar (Judicial) on 22.09.2026.