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RITES LTD vs. Espan Infrastructure Ltd

First Appeal from Order · 2026:DHC:8048Decided 17 Sept 2026New Delhi Bench
FAO 27/2019CNR: DLHC010011192018
Justice Manoj Kumar Ohri

Background

A company whose technical bid for an airstrip construction tender in Shravasti, Uttar Pradesh was rejected, and whose earnest money deposit was forfeited, sued RITES Ltd (the tendering agency) in a Delhi district court, relying on RITES's Delhi branch office and a jurisdiction clause in the bid document. RITES argued that the entire tender process, from document sale to bid rejection, took place at its Gurugram office, and that the "Delhi jurisdiction" clause only applied to disputes under an actual signed contract, which never came into existence since the bid was rejected.

Decision Breakdown

The High Court found that every stage of the tender, purchase of documents, the pre-bid meeting, submission and opening of bids, and the decision to forfeit the earnest money, occurred exclusively at RITES's Gurugram office, so no part of the cause of action arose in Delhi. It also held the jurisdiction clause relied upon was part of the "Special Conditions of Contract," meant to govern an awarded and executed contract, and never came into operation since no contract was ever awarded to this unsuccessful bidder. The mere presence of a subordinate branch office in Delhi, where no part of the transaction took place, could not confer jurisdiction either. The trial court's order accepting Delhi jurisdiction was set aside, and the plaint was ordered returned for filing in the proper court.

Lesson Learnt

Suing a company at a city merely because it has a branch office there, or relying on a jurisdiction clause meant for a stage the dispute never reached (like a signed contract), will not work if none of the actual events of the dispute happened in that city: a case must be filed where the cause of action genuinely arose.

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