The Delhi High Court has held that a defendant’s residence in Delhi cannot override an exclusive jurisdiction clause in a Memorandum of Understanding. It said plaintiffs who found their suit on an MoU must abide by all its terms, including the forum it designates.
A Division Bench of Justice Anil Kshetarpal and Justice Bharat Parashar dismissed an appeal against a Single Judge’s order that had returned the plaint for want of territorial jurisdiction. The Bench held that disputes under the MoU lie only before the Courts at Bareilly, Uttar Pradesh.
Background
The plaintiffs were members of the Rehber Group/Marya Group, which held 50% of the shares of Rehber Food Industries Private Limited. Their MoU dated December 12, 2022, signed at Bareilly, governed the transfer of shares by group members. It required shares to be first offered within the group, with transfer to an outsider permitted only with the unanimous written consent of the other members.
The dispute arose when Defendant No. 3, Firoz Ahmed Zahir Ahmed Shaikh, proposed to transfer 1,45,833 equity shares to Defendant No. 1, Rashid Qureshi, who was not a group member. On January 20, 2026, the plaintiffs gave conditional consent, subject to an undertaking that the shares would not be transferred outside the group without the prior written consent of all members.
The plaintiffs claimed that Defendant No. 1 breached this condition by inviting bids from both group and non-group shareholders. On June 26, 2026, Defendant No. 2, Mohd. Imran, was declared the successful bidder at ₹216 per share. The plaintiffs then filed a suit in Delhi seeking declarations that the transfers were void, an injunction, and specific performance.
Defendant No. 2 objected to territorial jurisdiction, relying on Clauses 9(f) and 10 of the MoU, which name Bareilly as the jurisdictional forum. On October 6, 2026, the Single Judge returned the plaint under Order VII Rule 10 of the CPC.
Arguments
Senior Advocate Parag P. Tripathi, appearing for the appellants along with Advocates Udita Singha, Karan Grover and Aparajito Sen, argued that the defendants could not approbate and reprobate. He submitted that since the defendants disputed the MoU, they could not rely on it to exclude Delhi’s jurisdiction, particularly when Defendant No. 1 resides in Delhi. He also pointed to two other suits concerning Rehber Group shareholding pending in Delhi.
Senior counsel for Defendant No. 2 argued that the plaintiffs’ case rested entirely on the alleged breach of the MoU, so they were bound by its jurisdiction clause. He submitted that the other suits proceeded on a different premise and did not confer jurisdiction on Delhi courts. Advocates Milind Srivastava and Mohit Gupta, and Senior Advocate Ankit Jain along with Advocates Manmeet Singh, Anugrah Robin Frey, Palak Nagar and Rishita Khandelwal, appeared for the respondents.
Delhi High Court on Exclusive Jurisdiction Clause
The Bench held that Clauses 9(f) and 10, read harmoniously, show the parties intended disputes under the MoU to be amenable only to the Courts at Bareilly. It noted that Defendant No. 2 does not reside in Delhi and no material part of the cause of action was shown to have arisen there, so the plaintiffs had failed to establish jurisdiction under Section 20 of the CPC.
Rejecting the argument based on the defendants’ denial of the MoU, the Court observed that “A denial of the MoU by the Defendants on merits can neither alter the nature of the dispute nor enlarge the forum available to the Plaintiffs.”
On Defendant No. 1’s residence, the Bench held that “the residence of one of the Defendants cannot override the forum which the Plaintiffs, being signatories to the MoU, have themselves agreed upon for the adjudication of disputes arising therefrom.”
The Court added that “Having founded their case upon the said MoU, the Plaintiffs are required to abide by its terms in entirety, including the jurisdiction clause contained therein.” It held that the doctrine of approbation and reprobation, if at all, operates against the plaintiffs, who sought to enforce rights under the MoU while disowning its forum clause.
On the other suits, the Bench found that the suit by Mohammed Irfan and others was not predicated on the MoU and had been decreed on settlement. In the second suit, the territorial jurisdiction objection had not yet been adjudicated. It held that “the mere pendency of a suit before this Court cannot, by itself, confer territorial jurisdiction upon the courts at Delhi in the present proceedings.”
Outcome
Finding no infirmity in the Single Judge’s order, the Bench dismissed the appeal along with pending applications. It clarified that its observations are confined to territorial jurisdiction and are not an expression on the merits or on the applicability of the dispute resolution mechanism under Clause 9.
The plaintiffs were given liberty to pursue their remedies before the competent Court at Bareilly, including the benefit of Section 14 of the Limitation Act, 1963, as may be available.
Case Title: Shakeel Qureshi & Ors. vs. Rashid Qureshi & Ors.
Case No.: FAO(OS) (COMM) 282/2026
Bench: Justice Anil Kshetarpal and Justice Bharat Parashar
Date: October 27, 2026
