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Delhi High Court · 6 October 2026

Sued in Delhi, Sent to Bareilly: Exclusive Jurisdiction Clause Defeats a Share-Transfer Suit

In Shakeel Qureshi v. Rashid Qureshi, Justice Tushar Rao Gedela returned a CS(COMM) plaint under Order VII Rule 10 CPC, holding that where the reliefs stand or fall on an MoU with a Bareilly-only jurisdiction clause, Delhi courts cannot entertain the suit even though a defendant resides in Delhi.

Jurisdiction clauses are read at the start of a dispute, not the end. In Shakeel Qureshi & Ors. v. Rashid Qureshi & Ors. (CS(COMM) 805/2026, decided 6 October 2026), the Delhi High Court returned a commercial suit over contested share transfers in a closely held company because the Memorandum of Understanding at the heart of the claims conferred exclusive jurisdiction on the courts at Bareilly. The judgment is a working lesson in three doctrines that decide commercial cases before any merits are touched: the court's duty to settle jurisdiction first, the reach of an exclusive jurisdiction clause over claims intertwined with the contract, and the limits of the approbate-and-reprobate estoppel.

The dispute

Rehber Food Industries Pvt. Ltd. is a closely held company split evenly between two family groups. The plaintiffs — members of the Rehber group and signatories to an MoU of December 2022 — alleged that a fellow group member transferred a five per cent shareholding to an outsider under a share purchase agreement executed at Bareilly in January 2026 (Transaction A), in breach of the MoU, and that the outsider then on-sold the shares through a bidding process that bypassed the family group, with the rival group member declared successful bidder at Rs. 216 per share (Transaction B). The suit, with an interim injunction application, was filed on the commercial side of the Delhi High Court.

The defendants raised a threshold objection: Clause 10 of the MoU conferred exclusive jurisdiction on the courts at Bareilly, and Clause 9 provided for arbitration seated there.

Jurisdiction first

Following the Supreme Court’s guidance in Asma Lateef v. Shabbir Ahmad, the Court examined territorial jurisdiction before touching the injunction. That sequencing is itself a point of practice: interim relief granted by a court that lacks jurisdiction builds on sand, and the Delhi High Court declined to build on it.

Step 1 — Are the reliefs founded on the MoU? Yes: the challenge to Transaction A, and through it Transaction B, depended on rights created by the MoU.
Step 2 — Does the MoU channel jurisdiction? Yes: Clause 10 is an exclusionary clause confining litigation to Bareilly courts.
Step 3 — Does Section 20(a) CPC (defendant in Delhi) override? No: parties may by consent select one competent forum and exclude the rest.
Result — Plaint returned under Order VII Rule 10 CPC; interim orders vacated; merits expressly left open.

The estoppel argument that failed

The plaintiffs invoked approbate-and-reprobate: the defendants, they said, had taken inconsistent positions on the MoU in earlier litigation and could not now press its forum clause. The Court held the doctrine prima facie inapplicable — the purchasing defendant had never relied on the MoU and had in fact contested both the MoU and the Court’s jurisdiction earlier, while the transferee defendant was not even a party to the earlier suits. Estoppel of this kind requires a party to have taken benefit of the instrument it now disputes; mere participation in prior rounds of litigation does not create it.

The Court expressly declined to rule on the merits — the MoU’s validity, and the allegations of fraud and collusion around the bidding, all remain open for the competent forum. An Order VII Rule 10 return decides where the fight happens, not who wins it.

Drafting and litigation lessons

For drafters: family settlement MoUs and shareholders’ agreements should choose their forum deliberately. An exclusive jurisdiction clause plus an arbitration clause seated in the same city, as here, creates a coherent dispute-resolution geography that courts will enforce.

For plaintiffs: before filing where a defendant resides, trace each relief to its source document. If the cause of action is intertwined with a contract carrying a forum clause, expect the suit to travel to that forum — along with the collapse of any interim orders obtained in the meantime.

For defendants: raise the forum objection at the first hearing and insist it be decided first. Delhi commercial courts, following Asma Lateef, will take the jurisdictional question before interim relief — often the entire ballgame in share-transfer disputes.

Frequently Asked Questions

Can parties restrict jurisdiction to one city by contract?

Yes, within limits. Parties cannot confer jurisdiction on a court that has none, but where two or more courts would have jurisdiction under Section 20 CPC, a clause selecting one of them — expressly or by clear implication — excludes the others. Here, Bareilly courts had jurisdiction (the share purchase agreement was executed there), and Clause 10 of the MoU made that jurisdiction exclusive.

One defendant resided in Delhi — why wasn't that enough?

Residence of a defendant does satisfy Section 20(a) CPC, and the Court accepted that. But territorial jurisdiction that exists under the general law can be contractually channelled: once the Court found the suit's reliefs were founded on the MoU, the Bareilly-only clause governed, and the Delhi forum stood excluded by consent.

How did the clause bind defendants who never signed the MoU?

The Court did not hold the non-signatories personally bound by contract; it held the suit bound by its own foundation. The challenged transfer traced directly to the MoU, so the plaintiffs could not sue on rights sourced in the MoU while escaping its forum clause. The clause attached to the claims, not merely the signatories.

What happens after a plaint is returned under Order VII Rule 10?

The plaint is handed back for presentation to the competent court — here, at Bareilly. The suit is not dismissed and limitation benefit for the period prosecuted in good faith is ordinarily available under Section 14 of the Limitation Act. But interim orders fall with the return, as they did in this case, so the plaintiff must seek fresh protection in the new forum quickly.

Note: This article is general information about the law and is not legal advice. It does not create an advocate-client relationship. The position stated is as at 11 October 2026 and may have changed since. Readers should verify any provision or decision referred to against the official text and seek advice on their own circumstances.