THE HON’BLE SRI JUSTICE V.V.S.RAO SECOND APPEAL No.1340 of 2010 July 28, 2011 Between: Sripada Enterprises, represented by its Proprietor, Sripada Lakshmana Rao, S/o.Somasundaram ... Appellant And M/s.Nestle India Ltd., represented by its Managing Director, And another ...Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO SECOND APPEAL No.1340 of 2010 JUDGMENT: This second appeal against the reversing judgment in A.S.No.133 of 2009 dated 13.7.2010 passed by the Court of the First Additional Senior Civil Judge, Kakinada, is by the plaintiff. He instituted the suit being O.S.No.49 of 2000 for recovery of a sum of Rs.99,034/- with subsequent interest being the amount deducted by the defendants (respondents herein). The same was decreed on 26.11.2007. The first appellate Court, however, reversed it on the ground that the Court at Kakinada has no territorial jurisdiction and that the plaintiff, having received the amounts due, gave letter admitting full satisfaction of the claim. The plaintiff addressed Ex.B1 dated 06.6.1996 to the Area Sales Manager of defendants requesting him to be appointed as distributor at Kakinada. In response thereto, the defendants sent Ex.B2 format appointing the plaintiff as one of the distributors with effect from 18.6.1996 subject to terms and conditions contained therein. For a period of 2½ years, the plaintiff was distributor of the defendants’ products. Commencing from February, 1997 till October, 1998 the defendants deducted an amount of Rs.82,186/- towards penal interest for the delayed payments made by the plaintiff. For that purpose, the defendants raised debit notes, Exs.A6 to A15. This was informed to the plaintiff. Annoyed with this, the plaintiff resigned as distributor. He then sent Ex.A1 letter dated 29.4.1999 requesting the defendants to settle the account. They sent Ex.B4 dated 11.5.1999 along with an amount of Rs.79,081/-. The plaintiff endorsed having received the demand draft agreeing that the account is settled. Nonetheless he issued a legal notice, Ex.A2 dated 28.5.1999, and filed the suit for recovery/refund of the amount. The defendants opposed the suit. They objected to the cognizance of the suit by the Court of Principal Junior Civil Judge, Kakinada based on Ex.B2 distributor agreement, which conferred the jurisdiction on the Courts situated at Madras. They also relied on Ex.B4 full and final settlement of accounts reached between the parties, and denied all other allegations. The trial Court framed three issues: one dealing with territorial jurisdiction, second dealing with full and final settlement of the account, and the third regarding the relief. The plaintiff deposed as P.W.1 and marked Exs.A1 to A17. Besides examining two witnesses, the defendants marked Exs.B1 to B6. As noticed supra, the trial Court rejected Exs.B2 and B4, came to the conclusion that it has territorial jurisdiction and decreed the suit with interest at 6% per annum from the date of the suit till the date of realization. The appellate Court reversed the judgment and decree of the trial Court. The Counsel for the appellant/plaintiff would submit that the defendants filed I.A.No.3014 of 2003 for trial of preliminary issue regarding the territorial jurisdiction, that the same was dismissed by the trial Court on 21.3.2007 and that the defendants having not preferred an appeal against the same, it has become final and, therefore, the issue could not have been agitated again before the first appellate Court. Secondly, he would submit that even if Exs.B2 and B4 are true and binding, there is no stipulation to charge penal interest ranging from 100%, 160% and 360% which itself is excessive and obnoxious. According to the learned Counsel, the findings of the first appellate Court are perverse and warrant interference by this Court. The plaintiff does not seriously dispute that it is only after he addressed Ex.B1, the defendants sent Ex.B2, and he commenced distributorship from 18.6.1996. He also does not dispute that as per Clause (j) of Ex.B2 agreement any legal dispute arising out of the same shall be subject to the jurisdiction of the Courts at Madras. It is, however, contended that Ex.B2 is only a format of the agreement and, therefore, relying on a clause therein the jurisdiction of the Courts at Kakinada cannot be ousted. This submission is wholly misconceived. After receiving Ex.B2 only the plaintiff commenced his business of distributorship of the defendants’ products, entered into other transactions, received the goods and paid the money. Therefore, he cannot be allowed to resile from Ex.B2 even if it is a format having regard to the conduct of the plaintiff. Indeed in Ex.A1 as well as Ex.A2 the plaintiff admitted having been appointed as distributor which only leads to inference that he impliedly accepted all the terms and conditions in Ex.B2. When the parties to a contract agreed to resolve disputes by submitting to the jurisdiction of a named Court, any other Court cannot be said to have jurisdiction to try the suit (see Hakam Singh v Gammon (India) Ltd.[1], Hindustan Construction Co. Ltd v State of Bihar[2] and South East Asia Shipping Co. Ltd v Nav Bharat Enterprises Pvt. Ltd[3]). The submission that the order of the trial Court in I.A.No.3014 of 2003 dated 21.3.2007 bars the adjudication of any such issue is legally incorrect. Section 105(1) of the Code of Civil Procedure, 1908 enables the party to a proceeding to set-forth as a ground of objection when no appeal is filed against an interlocutory order. The error, defect or irregularity in the decision of the trial Court on the preliminary issue can itself be a ground of appeal before the first appellate Court and, therefore, the principle of res judicata would not apply. The other aspect of the matter is the issue of debit notes, Exs.A6 to A15 by the defendants for deducting the amounts towards interest for delayed payments. These were issued when the agreement of distributorship was in force. The plaintiff did not raise any objection at any time. It is only after resigning from distributorship, he raised objection. Further when he sent Ex.A2 notice, the defendants sent Ex.B4 along with demand draft. As admitted by the P.W.1, he endorsed having received the amount without any demur and, therefore, he cannot be allowed to turn around and claim the amount. It is well settled that when a party to a contract accepts full and final settlement of account, the contract stands terminated and the rights and obligations of the parties under the agreement, ordinarily, shall stand waived and/or discharged. The plaintiff, therefore, is not entitled to recover the suit amount. This Court, however, hastens to add that even otherwise it is a question of fact based on evidence from which appropriate inference has to be drawn. The first appellate Court has correctly applied the principles of law and arrived at the finding of facts. No interference is called for in this second appeal. The second appeal, with the above reasons, is accordingly dismissed. No costs. _______________ July , 2011 (V.V.S.RAO, J) YS [1] (1971) 1 SCC 286: AIR 1971 SC 740 [2] (1999) 8 SCC 436 : AIR 1999 SC 3710 [3] (1996) 3 SCC 443