HDFC Bank v. Deepti Bhatia

Delhi High Court · 12 Nov 2021 · 2021:DHC:3584

Prathiba M. Singh

C.R.P. 79/2021

2021:DHC:3584

civil appeal_dismissed Significant

AI Summary

The Delhi High Court held that an exclusive jurisdiction clause favoring Mumbai courts in an employment contract does not oust the jurisdiction of Delhi courts where the employee resides and cause of action arises, especially to avoid hardship to the employee.

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C.R.P. 79/2021
HIGH COURT OF DELHI
Date of Decision: 12th November, 2021

C.R.P. 79/2021 & CM APPLs. 40095/2021, 40096/2021, 40097/2021
HDFC BANK ..... Petitioner
Through: Mr. Lalit Kumar, Advocate.

VERSUS

DEEPTI BHATIA ..... Respondent
Through: None.

CORAM:

JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)

JUDGMENT

1. This hearing has been done through video conferencing.

2. The present revision petition challenges the impugned order dated 17th April, 2021 passed by the Ld. CJ, Northwest District, Rohini Courts (hereinafter “Trial Court”) in Civil Suit No.1164/2017 titled HDFC Bank v. Deepti Bhatia. By the impugned order, the objection as to territorial jurisdiction raised by the Petitioner/HDFC Bank has been rejected by the Trial Court.

3. The petition arises out of a suit for declaration and mandatory injunction wherein the Respondent/Plaintiff (hereinafter “Plaintiff”) prays for a declaration that the Termination Letter dated 31st May, 2017 by which she was terminated from the services of HDFC Bank, as null and void. Further, she prays for reinstatement in service with all consequential benefits.

4. The Plaintiff was appointed as a clerk in the Lord Krishna Bank on 2nd June, 2005. Thereafter, the Lord Krishna Bank merged with HDFC Bank in

2009. Consequent upon the merger, the Plaintiff was appointed as Officer 2021:DHC:3584 with HDFC Bank at its Janakpuri branch, New Delhi on 23rd March, 2009. The case of the Plaintiff is that she was promoted in December, 2012 and was working with the Retail Banking Branch, Sector-15, Rohini, Delhi, when she was terminated by HDFC Bank, vide Termination Letter dated 31st May 2017. It is this letter which has been impugned in the suit.

5. In the suit, the HDFC Bank took an objection that the Trial Court does not have the territorial jurisdiction in view of the Clause (vii) of the Employment Agreement dated 23rd March, 2009 executed between HDFC Bank and the Plaintiff. As per Clause (vii), the exclusive jurisdiction rests with the competent courts in Mumbai, at the time when she was appointed by the HDFC Bank in 2009. The said clause reads as under:- “Clause VII Governing law and Jurisdiction: This Agreement shall be governed and construed in accordance with the laws of India in relation to any legal action or proceeding to enforce this Agreement. The Parties irrevocably submits to the exclusive jurisdiction of any competent courts situated at Mumbai and waive any objection to such proceedings on grounds of venue or on the grounds that the proceedings have been brought in an inconvenient forum.”

6. However, vide the impugned order dated 17th April, 2021, the trial court has rejected this objection by following the judgment in Vishal Gupta vs. L&T Finance Ltd. [CS(OS) 2309 of 2008 decided on 9th September, 2009], wherein a distinction has been drawn by the Court between employment contracts and commercial contracts. The rationale given by the Court in the said judgment is that an employee, who is no longer in service, cannot be directed to go to Mumbai for instituting and pursuing litigation, as the same would be expensive and unfair qua the employee. The Court has also considered the judgement of the Supreme Court in ABC Laminart Pvt. Ltd. and Ors. Vs. A.P. Agencies, Salem [AIR 1989 SC 1239] and distinguished contracts of employment from the said case. The relevant observations of the Trial Court in the impugned order are as under:-

“5. Under the Code of Civil Procedure, the place of suing in matters as the present one is regulated by Section 20 clause (a), (b) and (c) read along with the explanation. The law is settled and there is no denying that when the suit can be instituted at more than one place, the parties are at liberty to choose the forum of their choice. The main issue in the present matter is not whether the court at Mumbai shall have territorial jurisdiction over the present matter, but whether the jurisdiction of this court is completely ousted by the jurisdiction clause of the appointment letter executed between the parties. 6. Though both the parties have relied upon respective judgment to fortify their position, let us advert to the case of Vishal Gupta vs. L&T Finance Ltd. (CS(OS) 2309 of 2008 & IA No. 13399/08 decided on 9.9.2009) where the Hon’ble High Court of Delhi has observed the following in para 24 “In the considered view of this Court the decision on the “ouster clause”in the context of a commercial contract have to be held to be distinguishable in their application to a case of a contract of employment. In the employment contract, an employee would not be able to insist that the disputes, if any, are to be referred only to one court and not the other. The employee usually accepts the employment with all the attendant terms and conditions or not at all. In the present case, the letter of employment no doubt states that it is a transferable job. Still the Plaintiff was to work primarily for the Delhi office of the Defendant. He, in fact, rendered services only in Delhi office. He submitted his resignation at Delhi. For an employee

no longer in service to be asked to go to Mumbai for instituting and pursuing litigation would render the remedy expensive and inefficacious for such employee. It would work harshly against him. Moreover, in a situation like the present one where the prayer is essentially for a direction to the Defendant to issue a relieving letter, to direct the employee to go to a different city only because of the ouster clause seems to be unfair and unjust. Although in commercial contracts, it has been held that such an ouster clause would not be opposed to public policy (see the observations in para 18 of the decision in ABC Laminart) in a contract of employment such a clause could well be held to be opposed to public policy. To repeat, the courts have thus far had no occasion to examine how a strict application of the exclusion clause would work for an employee who is out of service. As regards the comparative hardship, the Defendant has an office in Delhi and there will be no difficulty for it to appear before this Court and defend itself.” Further, the relevant part as contained in para 25 is also reproduced below- “As far as Section 20 CPC is concerned, in terms of clause (b) thereof, the Defendant has an office in Delhi. The letter of appointment was received in Delhi. The email correspondence referred to hereinabove shows that the Plaintiff’s resignation letter was sent from Delhi and the refusal of the relieving letter was communicated to the Plaintiff in Delhi. The result is that the Courts in Mumbai (because of the clause in the appointment letter) and this court, on account of the substantial part of the cause of action having arisen here, jurisdiction to try the case.” In view of the reasons mentioned in the above paragraph, the Hon’ble High Court held the following in para.26- “…. It is held that the ouster clause in the letter of appointment of the Plaintiff cannot preclude this Court from entertaining the present suit. The preliminary objection of the Defendant to the maintainability of this suit on the said ground is hereby overruled.” Though the defendant has relied upon a separate decision of the Hon’ble High Court of Delhi titled Mukesh Aghi vs. Steria Ltd. And Ors., 2016 Law Suit (Del 1471), but even in this decision the case relied upon by the plaintiff has not been overruled, but merely distinguished upon the basis of the facts of that case. In the facts and circumstances of the present case, the above-mentioned case relied upon by the plaintiff is more closely attracted.

7. Now coming to the facts of the present case, the plaintiff worked at different branches of the defendant bank situated at Delhi. She was terminated from her services while she was working at Sector-15, Rohini branch of the defendant bank. Moreover, the communication of the termination of the services of the plaintiff was received by her at Delhi (See P.K.S. Srivastava vs. Union of India and Anr., WP NO. 10392 of 2015). Further the defendant bank also has a branch office situated in Delhi. In such a scenario and in view of the legal position as laid down by the Hon’ble High Court of Delhi in Vishal Gupta (supra), it can be safely concluded that the territorial jurisdiction of this court has not been excluded completely by the jurisdiction clause of the impugned appointment letter and this court has the jurisdiction to entertain the present suit. Nothing stated hereinabove will have any bearing on the final decision of this case.”

7. Mr. Lalit Kumar, ld. Counsel for the Petitioner/HDFC Bank submits that if such an approach is adopted, this would completely render the jurisdiction clause in the agreement without any sanctity whatsoever, and such a course of action cannot be encouraged.

8. In the facts of the present case, the Plaintiff is residing in Delhi. She was last working in Rohini, Delhi, and the Termination Letter dated 31st May, 2017 was served upon the Plaintiff in Delhi. Thus, the cause of action has clearly arisen in Delhi. This Court is of the opinion that the mere fact that the exclusive jurisdiction vested in the competent courts situated in Mumbai as per the Employment Agreement, would not be a sufficiently distinguishing factor for the present case in respect of the observations made in Vishal Gupta (supra). The Trial Court has rightly held that the rationale in Vishal Gupta (supra) would apply squarely. This Court agrees. Thus, the impugned order passed by the Trial Court does not want any interference.

9. However, it is made clear that the impugned order dated 17th April, 2021 shall be treated as an order passed in the peculiar facts and circumstances of the present case.

10. The observations made by this Court would not affect the merits of the matter.

11. With these observations, the present petition, along with all pending applications, is disposed of. website of the Delhi High Court, www.delhihighcourt.nic.in, shall be treated as the certified copy of the order for the purpose of ensuring compliance. No physical copy of orders shall be insisted by any authority/entity or litigant.

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PRATHIBA M. SINGH JUDGE NOVEMBER 12, 2021 MR/AD

HDFC Bank v. Deepti Bhatia

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