Case details: Rakesh Kumar Verma Vs HDFC Bank Ltd. (Civil Appeal No. 2282 of 2025)
Jurisdiction in simple words means which Court can decide the dispute and give its judgement.
Critical Point of Judgement: “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”.
Significant Findings in the Judgment: 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.
Important lessons from the Judgment:
- The defenses taken about place of work, nature of dispute, place of dispute, etc. are less convincing in such cases.
- The Three Essential Conditions must be satisfied:
- The Agreement shall not restrict initiation of legal proceedings against each other.
- Court having exclusive jurisdiction shall be competent to have jurisdiction as per prevailing enactments. Hence, the case cannot filed in Court which lack subject matter or pecuniary jurisdiction.
- The Parties must have accepted the jurisdiction of the Court.
- The acceptance of terms and conditions of the employment contract confirms the rights and obligations of the Parties.
- An employee joining the service of the employer cannot object the terms and conditions afterwards.
- Defences like one party is influential or powerful and other party is weak does not survive in legal contracts. The terms and conditions have to be enforced regardless of relative strength and weakness of Parties.
- Place of issuance of appointment letter, employment contract, decision of termination, and issuance of letters of termination were deciding factors in present case.
Essential Conclusions:
- The legal drafting and understanding the terms of employment contract are very crucial before signing by the employees.
- The clause in the contract has clearly and explicitly barred the jurisdiction of all other courts by using the word “exclusive”.
- Cases filed before Court which does have jurisdiction can either be ‘returned’ or ‘withdrawn’ by the Party.
Judgement Analyzed By,
Shailendra M Deshpande
Advocate & Trademark Attorney
+91 98900 32603
