Territorial jurisdiction and relieving letter relief in employment disputes: exclusive clause not enforced, interim mandatory injunction granted

In an employment dispute, an exclusive jurisdiction clause selecting Mumbai was not enforced to exclude the Delhi HC where the employee worked in Delhi, resigned there, and the refusal to relieve him was communicated there; a substantial part of the cause of action arose locally, so the territorial objection failed. The Court also held that the employee was entitled to an ad interim mandatory injunction because no contractual condition required resolution of alleged non-starter cases before release, the employer had accepted resignation-related payments, and withholding the relieving letter caused immediate prejudice by blocking new employment. The employer was directed to issue a relieving letter stating only that the employee was no longer in service.

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Issues: (i) Whether the territorial jurisdiction of the Court was excluded by the jurisdiction clause in the employment contract; (ii) whether the plaintiff was entitled to an ad interim mandatory injunction directing issuance of a relieving letter.

Issue (i): Whether the territorial jurisdiction of the Court was excluded by the jurisdiction clause in the employment contract.

Analysis: The jurisdiction clause was examined in the context of an employment contract, not a commercial bargain between equal contracting parties. The plaintiff worked in Delhi, resigned from Delhi, and the refusal to relieve him was communicated in Delhi. A substantial part of the cause of action therefore arose within the local jurisdiction. The clause selecting Mumbai could not operate as an absolute ouster where this Court otherwise had jurisdiction under Section 20 of the Code of Civil Procedure, 1908, and enforcing such a clause against an employee out of service would be unduly harsh.

Conclusion: The ouster clause did not bar this Court from entertaining the suit, and the territorial objection was rejected.

Issue (ii): Whether the plaintiff was entitled to an ad interim mandatory injunction directing issuance of a relieving letter.

Analysis: The Court found no contractual condition requiring the plaintiff to resolve the alleged non-starter cases before being relieved. The defendant had accepted the resignation-related payments and still refused to issue an unconditional relieving letter, while also refusing the plaintiff's offer to rejoin. The denial of a relieving letter was causing immediate prejudice by preventing the plaintiff from taking other employment. Applying the settled principles governing interlocutory mandatory injunctions, the Court held that the plaintiff had shown a strong case, the balance of convenience favoured him, and irreparable harm would result without interim relief.

Conclusion: The plaintiff was entitled to the interim mandatory injunction, and the defendant was directed to issue a relieving letter stating only that the plaintiff was no longer in its service.

Final Conclusion: The suit survived for further proceedings, but the plaintiff obtained interim protection and succeeded on both the jurisdictional objection and the request for a relieving letter.

Ratio Decidendi: In an employment dispute, an exclusive jurisdiction clause will not be enforced to defeat a court otherwise having territorial jurisdiction where substantial parts of the cause of action arose locally, and a mandatory interim injunction may issue to prevent immediate and irreparable prejudice when the employer withholds a relieving letter without contractual basis.

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