The Court can give effect to a private arbitration award as if it was an adjustment by common consent, and a decree incorporating the direction of the award can be valid even in a declaratory suit.

1. The present appellant instituted suit No. 12 of 192, in the Court of the 2nd Additional District Judge, Akola, against the present respondent for a declaration that the accounts between them were settled, and that his liability thereunder did not extend beyond a certain amount. During the pendency of the suit, the parties thought fit to refer the matters in dispute between them to the arbitration of a private arbitrator. This they did without the knowledge and consent or intervention of the Court. The reference and the arbitration proceedings and even the award were made, completed and declared and even partly given effect to before the date fixed for the1 hearing of the suit which was 16th August 1927. The result was that when the plaintiff-appellant's suit came on for hearing, on that date, the defendant-respondent produced the award and, by a formal application made to the Court, prayed that the same, be filed and a decree in terms thereof be passed in his favour. The Court took down statements and heard the parties and recording the terms of the award passed a decree in terms thereof.

2. This appeal is against the decree so passed in terms of the award on the basis of the defendant's application. The reference to the arbitrator not having been made through the intervention of the Court, it is contended that the Court was not competent to pass any decree on the basis of the award. The only provision under which it could have been filed and made the rule of the Court was, we think, para. 20, Schedule 2, Civil P.C. The application made by the defendant-respondent on 16th August 1927 could have been treated as one so made, but the Court failed to notice the particular provisions under which it could be entertained and to register it as a suit. However, this omission does not invalidate the decree as we will presently show.

3. As pointed out by this Court in Namadarkhan v. Nanhoo, 1926 AIR(Nag) 405, if in a pending suit the parties go to a private arbitrator without the consent of the Court, the award cannot be enforced as an award, but there is nothing to prevent the Court from giving effect to the award as if it was an adjustment by common consent. We are of opinion that the power given by para. 20, Schedule 2, Civil P.C., cannot override the general power given to parties under Order 23, Rule 3, Civil P.C., to adjust their disputes by a lawful compromise at any time after the institution of the suit.

4. It is, however, contended before us that the terms of the adjustment or compromise go beyond the scope pf the suit which merely seeks a declaration and, therefore, it could not have been proper for the Court below to pass a decree incorporating the direction of the award to the plaintiff to pay a definite sum of Rs. 9,000 to defendant, in the absence of a suit by the defendant to enforce the award. We do not think this contention can prevail in view of the principle held applicable to such cases by their Lordships of the Privy Council in Mehdi Ali Khan v. Ghaudhri Ghanshiam Singh, 1927 AIR(PC) 204. There, as also here, the suit was one for a declaration, and the defendant, who was the appellant before their Lordships of the Privy Council, was anxious, like the plaintiff-appellant in this appeal, to get out of the adjustment which was brought about during the pendency of the suit by the good offices of some third person who presumably filled the character of private arbitrators, like Sheoji Jewandas of this case, to whom the parties to the litigation referred their differences for arbitration.

5. We may also note here that the terms of the award of the arbitrator, or of the adjustment arrived at by agreement between the parties acting for themselves, or settled for them by a third party chosen by them,

are such as to be susceptible in every detail to an effective order in the nature of specific performance against any party to the compromise who seeks to escape from his obligations thereunder

as remarked by their Lordship