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Employment Agreement – Exclusive Jurisdiction Clause – Section 28 of Contract Act & Section 20 CPC

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The appointment letter provided that the Bombay Courts will have exclusive jurisdiction with regard to any dispute.

The appellant filed civil suit in Patna Civil Court challenging the termination of his services on dated 28.8.2016.

The respondent filed a petition under Order VII Rule 11 of the Code of Civil Procedure for rejection of plaint on the ground that the Courts in Mumbai have exclusive jurisdiction.  The Civil Court Patna dismissed the said application.   However, the High Court of Patna allowed the revision of the Bank.

HELD 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.

The employees in this case 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 though that a term contained therein may not be beneficial for them at a subsequent stage.

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.

The explanation to Section 20 of the CPC is essential to decide this issue.   In the instant case, considering that the decision to employ the employees was taken in Mumbai, the appointment letter was issued from Mumbai, the employment agreement was dispatched from Mumbai, the decision to terminate the services was taken in Mumbai and the letters of termination were dispatched from Mumbai, we are convinced that the courts in Mumbai do have jurisdiction.

Judgment dated 8.4.2025 of the Supreme Court in Civil Appeal No.2282 of 2025 of Rakesh Kumar Verma   Vs.   HDFC Bank Ltd with connected matter.

 

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