Territorial jurisdiction must be decided first where a forum clause is invoked and jurisdiction is challenged at the outset.

Where parties have agreed that disputes are subject to Delhi courts, and territorial jurisdiction is challenged at the threshold, the Debts Recovery Tribunal must decide that jurisdictional objection as a preliminary issue before proceeding to the merits. The Tribunal was also held competent to entertain the application under section 19(25) raising the jurisdiction point, and it should confine itself first to that issue. The matter was therefore remitted for an early determination of territorial jurisdiction, with interim orders continued until that question is decided.

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Issues: Whether the Debts Recovery Tribunal was required to decide the question of territorial jurisdiction first in view of the jurisdiction clause conferring jurisdiction on Delhi courts and the challenge raised under section 19(25) of the Act.

Analysis: The parties had an agreed clause stating that disputes would be subject to the jurisdiction of the courts at Delhi. The objection to territorial jurisdiction was raised at the earliest stage and was also pressed by an application under section 19(25). In such circumstances, the Tribunal ought to determine its territorial jurisdiction as a preliminary matter before proceeding on the merits. The Court also held that the application under section 19(25) challenging jurisdiction was maintainable and that the Tribunal should confine itself first to the jurisdictional issue.

Conclusion: The Tribunal was directed to decide territorial jurisdiction first, and the writ petition succeeded to that limited extent.

Final Conclusion: The matter was remitted to the Debts Recovery Tribunal for an early determination of territorial jurisdiction, while the interim orders were continued till that issue was decided.

Ratio Decidendi: Where parties have agreed on a jurisdiction clause and territorial jurisdiction is specifically challenged at the threshold, the competent tribunal must decide that jurisdictional question as a preliminary issue before adjudicating the substantive claim.

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