Judgment :- 1. The plaintiff in C.S. Nos. 246 of 1984 and 315 of 1984, the India Cements Limited, has filed these appeals, two against the final orders in the suits and two against the orders in the applications by the defendants in the suits. 2. According to the plaintiff-appellant in the suit C.S. No. 315 of 1984, it had engaged the 1st defendant-respondent, a firm, of which the other defendants-respondents are partners, for carrying the work of quarrying and transport of limestone from the companys quarries since November, 1963 under successive agreements, entered into between them from time to time, the last being dated 20th August, 1974 for the period from 1st November, 1973 to 31st October, 1979. According to the plaint, “Nevertheless the said agreement was terminated by mutual consent of the plaintiff and the 1st defendant with effect from 31st March, 1978 and the plaintiff took over quarrying operations effective 1st April 1978”. After the plaintiff—appellant, took over the quarrying operations, parties, however, failed to come to terms as to their respective interests and liabilities, and according to the plaintiff-appellant, a total sum of Rs. 14,55,625-08 was due to the plaintiff from the defendants in respect of the agreements. T he plaintiff-appellant called upon the defendants-respondents to pay the said sum as per notice dated 14-2-1980. In C.S. No. 246 of 1984, the plaintiff-appellants case is not different from its case in C.S. No. 153 of 1984 as to the work of quarrying and transport of limestone by the defendants-respondents under successive agreements, the last of such agreement being dated 20th August, 1974, for the period from 1st November, 1973 to 31st October, 1979 and allegedly terminated by mutual consent with effect from 31st March, 1978, and differences in settling the respective interests and liabilities of the parties, But, its cause of action, in the main, is the dispute as to the tax arrears demanded by Regional Transport Officer, Salem and his insistence that the vehicles of the 1st defendant-1st respondents firm should carry public carrier permits in such operations, and the liability finally determined by the Regional Transport Officer, of tax arrears for the 22 vehicles, which formed part of the assets of the 1st defendants firm, but stood transferred to the plaintiff-appellant, the plaintiff who paid the said demand, sought a decree for a sum of Rs. 1,53,812-50 together with interest thereon. 1,53,812-50 together with interest thereon. Besides these suits, on the termination of the works contract, by mutual consent of the parties, on 31-3-1978, it appears from the records, the plaintiff-appellant and the defendants entered into an agreement dated 27-7-1979, under which, it is said, the value of the assets of the properties of the defendants-respondents firm, which were taken over by the plaintiff, was incorporated, The details of assets were included in the schedules of the agreement and one of the schedules, that is, schedule IX, contained the statement of account, giving details of the amount due by the defendants. Clause 24 of this agreement contained a provision for arbitration. Pursuant to this arbitration clause in the agreement, defendants named a chartered engineer as their arbitrator and filed a statement of claim, seeking for an award of Rs. 2,46,43,553-56 with interest. The plaintiff-appellant, however filed O.P. No. 8 of 1980, objecting arbitration and seeking trial in the Court, of all the disputes between the parties, This petition under Section 33 of the Arbitration Act, however, failed and the appeal against the order in the said original petition also failed. The plaintiff nominated a retired Judge of the Supreme Court of India as its Arbitrator, and the two Arbitrators entered upon the reference. There has been a re-nomination of the Arbitrator on account of the death of the nominee of the plaintiff-appellant. Nonetheless the arbitration proceeded and ended in an award, under which the plaintiff was asked to pay a sum of Rs. 65,00,000/- in full and final settlement of the claim of the defendents with interest at 9 percent per annum from the date of the award. The award was filed in Court on 15-4-1986 in O.P. No. 174 of 1986 under Section 14(2) of the Arbitration Act. After both parties entered appearance, the Court passed its judgement on 19-6-1986 in terms of the award. 3. In February, 1987, the defendants-respondents filed two applications, that is, one application in eash suit, seeking an order that the defendants have satisfied the suit claim. Srinivasan, J., has entertained those two applications on behalf of the defendants under Order XXIII Rule 3 of the Code of Civil Procedure read with Original Side Rule 8 of this Court under Order XIV thereof. Srinivasan, J., has entertained those two applications on behalf of the defendants under Order XXIII Rule 3 of the Code of Civil Procedure read with Original Side Rule 8 of this Court under Order XIV thereof. He has noted in his judgment that (1) the plaintiff willingly agreed to the arbitrators considering the matters set out in the statement of reconciliation (some sort of counterclaim of the plaintiff-appellant), (2) a presumption would arise that the award disposed finally, of all the matters in difference between the parties, and (3) there was an express declaration by the Arbitrators in the award that all the disputes referred to them by the parties had been finally disposed of by the award and no part of the claim remained undetermined. On the basis of the above the learned Judge has concluded that the claimants (respon dents herein) have satisfied the plaintiffs claim. Learned Judge has referred to Order XXIII Rule 3 of the Code of Civil Procedure in his Judgement and said that there is no compromise or agreement in writing signed by the parties, and has proceeded to say:— “The argument put forward against the validity of the award is that the scope of the reference made to the arbitrators was confined to the claim made by the defedants under the agreement dated 20-8-1974 and the present suit claims which arise out of the later agreement dated 27-7-1989 could not have been dealt with by the arbitrators without a fresh submission of reference to them. Reliance is placed on the absence of an arbitration clause in the agreement dated 27-7-1989 and it is contended that no ref erence could have been made to the arbitration without the intervention of court particularly when the suits are pending in this court. There is a basic fallacy in the arguments advanced. The reference to arbitration made in pursuance of Clause 24 of the agreement dated 20-8-1974 was a private reference validly made without the intervention of the court. Clause 24 is very wide in its terms as it provides for reference to arbitration of all questions of difference whatsoever touching the agreement or subject matter thereof or arising out of or in relation thereto and whether as to construction of the agreement or otherwise. Clause 24 is very wide in its terms as it provides for reference to arbitration of all questions of difference whatsoever touching the agreement or subject matter thereof or arising out of or in relation thereto and whether as to construction of the agreement or otherwise. When the defendants approached the arbitration with a particular claim the plaintiff in defence thereto put forward its claim arising out of the same contract but crystallised to a large extent by the agreement dated 27.7.1979. The later agreement between the parties stemmed only out of the earlier contract which was the foundation of the transaction between the parties. Strictly sp eaking, the plaintiff pleaded only a set off or counterclaim before the arbitrators while defending the claim put forward by the defendants. There was no necessity for submission of a fresh independent reference and much less through Court” The learned single Judge has further commented:— ‘Even assuming the scope of the original reference was limited, it was open to both parties to enlarge the same before the arbitrators as it was not a reference made by a court The statements in writing filed by the parties before the arbitrators were sufficient to serve the purpose and the absence of signature of any representative of the plaintiff on the statements does not at all matter”. There are some observations by the learned Judge, the learned Counsel for the appellant, has commented, such observations could have been avoided, viz., a comment on a letter by the plaintiff dated 22-9-1986 to the arbitrators that, “The attitude taken by the plaintiff in the letter dated 22-9-1986 to which I have already referred is to say the least highly reprehensible. The plaintiff did not have the courage to pose the question to the arbitrators only because the plaintiff was quite sure that the arbitrators had adjusted the amounts mentioned in the statement of reconciliation account when they passed the award. The plaintiff should not be allowed to take umbrage under technicalities of law and thereby enabled to play a fraud. The fetters of procedure shall not bar this court from ren dering justice.. I find on the facts that the plaintiff has obtained a benefit under the award viz., the adjustment of the amounts due to it from the defendants as against the amounts found payable to the defendants. The fetters of procedure shall not bar this court from ren dering justice.. I find on the facts that the plaintiff has obtained a benefit under the award viz., the adjustment of the amounts due to it from the defendants as against the amounts found payable to the defendants. Hence, it is not open to the plaintiff to challenge the validity of the award in these proceedings, particularly when the plaintiff has not raised any objection to a decree being passed by this Court in terms of the award in O.P. No. 174 of 1986.” 4. Learned Counsel for the appellant has, however, contended that the learned single Judge has completely overlooked the requirements of Rule 3 of Order 23 of the Code, wherein the Court is required to record its satisfaction that it is proved that the suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties or the defendant has satisfied the plaintiff in respect of the whole or any part of the subject matter of the suit. Learned Counsel for the respondents has contested the above and urged that there are good reasons in proper cases like the one in hand to postpone the hearing on other issues in the suit and decide whether outside the suit on the allegation by one party and denied by the other, an adjustment or satisfaction has been arrived at or not. 5. Before we deal with the contention, for which the foundation is laid in the fact that Srinivasan, J., has disposed of the civil suits only on the basis of his order in the two applications aforementioned that by the award in the arbitration proceeding, in terms of the arbitration clause in the agreement dated 20-8-1974, (there has been a dispute, however, whether the arbitration clause in the agreement dated 27-7-1979 was a reiteration of the arbitration clause in the agreement dated 20-8-1974) the defendent has satisfied the plaintiff, we may take notice, it is conceded that the defendants-respondents were claiming under the contract dated. 20-8-1974 and were seeking arbiration only under the arbitration clause in the agreement dated 20-8-1974. 6. 20-8-1974 and were seeking arbiration only under the arbitration clause in the agreement dated 20-8-1974. 6. The Code of Civil procedure has incorporated some well known doctrines and principles of equity as specific provisions to apply to all civil proceedings, including such rules of law, which apply to suits in general, such as jurisdiction of the Courts and res judicata . Section 10 of the Code says, no Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court, having jurisdiction to grant the relief claimed. Section 11 of the Code is a reiteration, nonetheless, of statutory requirement of the rule of equitable estoppel, which is called, in short, res judicata . It is taken out from the general dectrine and lays down:— ‘No Court shall try any suit issue in or which the matter directly and substantially in issue has been directly and substatially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court” Explanations thereto introduce some common law principles of equity in the rule of res judicata such as, the matter referred to in the Section, must, in the former suit, have been alleged by one party and either denied or admitted, expressely or impliedly, by the other and that any relief claimed in the plaint, which is not expressly granted by the decree, shall, for the purpose of this Section, be deemed to have been refused, etc. As to the rules in the First Schedule of the Code, with which we are concerned in the instant appeals. Section 121 of the Code says, it shall have effect, as if enacted in the body of the Code until annulled or altered in accordance with the provisions in Sections 122 to 131 thereof. As to the rules in the First Schedule of the Code, with which we are concerned in the instant appeals. Section 121 of the Code says, it shall have effect, as if enacted in the body of the Code until annulled or altered in accordance with the provisions in Sections 122 to 131 thereof. These rules, as divided in the Orders I to LI take care of almost all matters as to who may be joined as plaintiff, who may be impleaded as defendants, how the suit should be framed, who can represent a party in a proceeding, how cause of action should be joined, etc., and in particular set out the rules as to framing of a suit, wherein Rule 2(2) of Order 2 says, where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished, and Rule 2(3) thereof says that a person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted. The plaint, the first document which is required to be presented in Court, can be returned by the Court for various reasons and it could be rejected as Rule 11 of Order 7 provides, where it does not disclose a cause of action, where the relief claimed is undervalued, and the plaintiff, on being required by the to correct the valuation within a time to be fixed by the Court, fails to do so, or where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and Court the plaintiff does not make good the deficiency within the time, if any, granted by the Court and where the suit appears from the statement in the plaint to be barred by any law. Once the plaint is not returned or rejected and thus the suit is entertained by the Court, summons are issued to the defendants, who appear and present their written statement of defence, as the rules in this behalf in Order 8 of the Code specify. Once the plaint is not returned or rejected and thus the suit is entertained by the Court, summons are issued to the defendants, who appear and present their written statement of defence, as the rules in this behalf in Order 8 of the Code specify. Rules in this order envisage how any allegation in the Plaint should be denied, how any special pleading should be made, which show the suit not to be maintainable, when set-off can be claimed and the effect of set-off plea as well as (after the Amendment Act, 1976) how counterclaim by the defendant is to be made in addition to his right of pleading a set-off and when counterclaim is pleaded, and how the counterclaim shall proceed. Rules as to third party procedure, appearance of parties and consequence of non-appearance, examination of parties by Court, discovery and inspection and production, impounding and return of documents, take care of the proceedings after the appearance of the defendants or before non-appearance of the defendants in a suit, and when actually trial becomes necessary. Order 14 lays down: (1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other. (2) Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence. (3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue. This Order also states the universally acknowl edged rule that issues are of two kinds, (1) issues of fact, and (2) issues of law, and that the Court shall, at the first hearing of the suit, read the plaint and the written statement, if any, examine under Rule 2 of Order 10 and hear the parties or their pleaders, ascertain upon what material propositions of fact or of law, the parties are at vaiance and then frame and record the issues, on which the right decision of the case appear to depend. Rule 2 of this Order states:— “(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues. Rule 2 of this Order states:— “(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues. (2) Where issues both of law and of “fact arise in the same suit, and the Court is of opinion that the case or any party thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates, to- (a) the jurisdiction of the Court, or (b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other isssues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.” The effect of this Rule 2 of this Order, however, is considered along with Rule 6, which says:— “Where the parties to a suit are agreed as to the question of fact or of law to be decided between them, they may state the same in the form of an issue, and enter into an agreement in writing that, upon the finding of the Court in the affirmative or the negative of such issue,- (a) a sum of money specified in the of or to be ascertained by the “Court, or in such manner as the Court may direct, shall be paid by one of the parties to the other of them, or that one of them be declarded entitled to some right or subject to some liability specified in the agreement; (b) some property specified in the agreement and in dispute in the suit shall be delivered by one of the parties to the other of them, or as that other may direct or (c) One or more of the parties shall do or abstrin from doing some particular act specified in the agreement and relating to the matter in dispute.” Rule 7 of this order says: “Where the Court is satisfied, after making such inquiry as it deems proper- (a) that the agreement was duly executed by the parties, (b) that they have a substantial interest in the decision of such question as aforesaid, and (c) That the same is fit to be tried and decided, it shall proceed to record and try the issue and state its finding or decision thereon in the manner as if the issue had been framed by the Court, and shall, upon the finding or decision on such issue, pronounce judgment according to the terms of the agreement, and, upon the judgment so pronounced a decree shall follow.” 7. We have taken notice of the relevant provisions of the Code and such Orders and Rules under the Code, which we think, are relevant for appreciating the role, which Order 23 of the Code shally play, before setting out the said Order and the Rules thereunder. 8. Order 23 has two important Rules - one providing for the plaintiff to abandon his suit or abandon a part of his claim as against all or any of the defendants, that is, withdrawal of suit or abandonment of part of the claim, and another for the compromise of a suit The latter contains, inter alia , as follows:— “Where it is proved to satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, in writing and signed by the parties or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise, or satisfaction to be recorded, and shall pass a decree in accordance therewith so far it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit: Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment. Provided that the subject-matter of the agreement, compromise or satisfaction, in so far as it differs from the subject-matter of the suit, is within the territorial and pecuniary jurisdiction of the Court concerned. An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 shall not be deemed to be lawful within the meaning of this rule.” 9. An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 shall not be deemed to be lawful within the meaning of this rule.” 9. We have seen earlier in the scheme of the Code, by specific provisions in Order 14, that questions of fact or law may be agreement in form of issues by the parties and the Court if satisfied, that the agreement was executed in good faith, may pronounce judgment by stating its finding or decision thereon, in the same manner as if the issue had been framed by the Court and pronounce judgment according to the terms of the agreement. 10. In compromise of suit, as contemplated under Rule 3 of Order 23, the expressions are;- “Proved to the satisfaction of the Court, (i) that a suit has been adjusted, wholly or in part, by (a) any lawful agreement or compromise (in writing and signed by the parties (introduced by Act 104 of 1976) or b) where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit; and upon the above. (ii) the court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit”. 11. Speaking about the subject-matter, this Rule has expressed, “of the agreement, compromise or satisfaction.” In the first Proviso, however, the words “agreement” or “compromise” are not available when it is contemplated that in a case where one party alleging and the other party denying, the Court shall decide the questioa Words used in this Proviso are “adjustment” or “satisfaction” only. In the context of the words used in respect of issues in Rules 6 and 7 of Order 14 of the Code, we have seen, parti es are required to agree as to the question of fact or law to be decided between them and enter into an agreement in writing that, upon the finding of the Court in the affirmative or the negative of such issue, the judgment and decree would be in terms as in clauses (a), (b) or (c) of Rule 6. The Court, under Rule 7, is required to satisfy itself, that agreement in writing as contemplated in Rule 6, was executed in good faith and, on being satisfied, that the agreement was executed in good faith, to decide the issues as stated by the parties and pronounce judgment according to the terms of the agreement in writing. 12. A lawful agreement is one which is not void and every promise and every set of promises forming the consideration of each other is an agreement Consideration has a definite connotation and it has received a definition in the Indian Contract Act, 1872 in these words.- “When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the promise.” 13. For the satisfaction of the Court, that a suit has been adjusted wholly or in part by any lawful agreement or compromise thus, some acts of the parties outside the proceedings in the suit will be involved, and the Court will need to prove to its satisfaction of the fact that the suit has been adjusted wholly or in part, by a lawful agreement or compromise. The second limb, however, of Rule 3 of Order 23 is the satisfaction of the Court that the defendant has satisfied the plaintiff in respect of the whole or in part of the subject matter of the suit The Court will record its satisfaction that the defendant has satisfied the plaintiff in respect of the whole or in part of the subject matter of the suit, is not in doubt, but, how the Court will be satisfied that the defendant has satisfied the plaintiff in respect of the whole or in part of the subject matter of the suit is a ticklish question. We have recapitulated in this judgment some of such rules of equity which are in one sense, rules of substance but are incorporated in the procedural law, such as Sections 10 and 11 of the Code and Order 1, 2 and 8 of the Code. We have recapitulated in this judgment some of such rules of equity which are in one sense, rules of substance but are incorporated in the procedural law, such as Sections 10 and 11 of the Code and Order 1, 2 and 8 of the Code. If it will involve facts about the satisfaction of the plaintiff in respect of the whole or in part of the subject matter of the suit, in the sense that the plaintiffs claim against the defendant has been satisfied wholly or partly by the defendant and during the pendency of the suit, it shall involve investigation of such facts that parties may bring on the record of the proceedings i n the suit and such facts may not be found in the statements of the case of the parties, i.e., the plaint or the written statement. If the plaintiff comes and says that the defendant has satisfied him in respect of the whole or part of the subject matter of the suit, there will be no difficulty. If the defendant says that I have satisfied the plaintiff and the plaintiff says ‘No’, there shall be a dispute of fact; the Court then will be asking the parties to bring such facts and the proof thereof, whic h would show whether the defendant has satisfied the plaintiff in respect of the whole or in part of the subject matter of the suit. The first Proviso to Rule 3 of Order 23 clearly throws light on this when it says that, where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question. Thus, from the above, what is necessary according to us for a finding on the question whether the defendant has satisfied the plaintiff, is, it should be an act of the parties which should not be in any other proceeding in a Court of law or before any Authority, who is competent to decide such a dispute as the one in the suit but independent of it Parties may bind themselves by an agreement or compromise, whether defendant has satisfied the plaintiff, however, is a different proposition. It has to come either by the admission of the plaintiff or in the event of plaintiff denying, proof of such facts in accordance with law. 14. It has to come either by the admission of the plaintiff or in the event of plaintiff denying, proof of such facts in accordance with law. 14. We are a little surprised how parties contended before the learned single judge and how learned single judge, against the weight of a series of pronouncements of this Court including more than one Ful Bench judgment, accepted that it is possible for the defendant to establish that, by an award of the Arbitrator which was before the Court for making a rule accordingly, the defendant has satisfied the plaintiff. 15. A mere glance at the provisions of the Arbitration Act would have revealed that in all circumstances, a proceeding for arbitration is taken in lieu of a proceeding in a suit in a Court of law and in certain circumstances, as provided under section 47 of the Arbitration Act, an Arbitration Award otherwise obtained may with the consent of the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending. Thus an award can be taken as a compromise or adjustment of the suit as a whole or in part thereof. It cannot be taken as the claim of the defendant that he has satisfied the plaintiff. 16. Before the enactment of section 47 of the Arbitration Act, i.e., before the consolidation and amendment of the law relating to arbitration as a whole, two statutes occupied the field viz., the Indian Arbitration Act 9 of 1899, and the Second Schedule to the Code of Civil Procedure Act, 1898. The second schedule to the Code of Civil Procedure, 1898 contained provisions for classes of arbitration:— (i) where in a pending suit the parties thereto agree to refer the matter to arbitration through Court; (ii) where, in pursuance of an agreement refer, the parties move the Court to refer the matters in dispute to arbitration; (iii) where there is a private reference and an award and the parties apply to the Court for filing the award. There were provisions in all these three classes of arbitration for the Court to enquire into the validity of the award and pass suitable orders, either a decree in terms of it or setting it aside or remitting it for consideration. There were provisions in all these three classes of arbitration for the Court to enquire into the validity of the award and pass suitable orders, either a decree in terms of it or setting it aside or remitting it for consideration. None of these provisions had any application, where in a pending action the parties referred their disputes to the decision of an arbitrator, not through Court but privately and there was an award passed on such Reference. In the absence of an express provision in the Code as to how such an award was to be dealt with, the question frequently came up for consideration, whether it could be regarded as a compromise under Order 23 Rule 3, Code of Civil Procedure, even when one of the parties refused to accept the same and on that there was a sharp difference of opinin among the High Courts. That it could be recorded as an adjustment of the suit under Order 23 Rule 3, notwithstanding that one of the parties refused to accept it, was the view taken by a Full Bench of this Court in Subbaraju v. Venkataramaraju (A.I.R 1928 Mad. 1025 = 28 L.W. 321 (F.B.). Similar was the view taken by the Bombay High Court in Chanbasappa v. Basalingayya (A.I.R 1927 Bombay 565) and by the Allahabad High Court in Gajendra Singh v. Durgakunwar (A.I.R. 1925 All 503). 17. The contrary view, however, that such an award could not be given effect to as a compromise or adjustment under Order 23, Rule 3, C.P.C., was maintained in a number of cases by the High Courts of Calcutta, Patna, Rangoon, Lahore and Nagpur. This was the state of the law when the Arbitration Act was passed and Section 47 enacted. 18. This was the state of the law when the Arbitration Act was passed and Section 47 enacted. 18. A Division Bench of this Court, however, in Arumuga Mudaliar v. Balasubramania Mudaliar (I.L.R. 1946 Madras 39 = 58 L.W. 204 considered a case of an award made in a private arbitration during the pendency of a suit and recorded its opinion thus:— “Order 23, Rule 3 of the Code of Civil Procedure says that where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by a lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or a part of the subject matter of the suit, the Court shall order the agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the suit. The Proviso to section 47 leaves this provision of law untouched, In fact, it would “appear to be likely that it was inserted by the Legislature in order to allow the Court unfettered action under Order 23, Rule 3. The judgment in Subbaraju v. Venkataramaraju (1) (1928) I.L.R. 51 Madras 800) = 28 L.W. 321 (F.B.) itself gives the answer ro Mr. Ramachandra Ayyars agrument. It contains this statement:— “If an agreement to abide by the decision of an arbitrator can be held to be a compromise, the section is clearly applicable. It has been suggested that a mere agreement to be bound by a future award is not a compromise, whereas an agreement to accept an award that has been made is a compromise. It is difficult to see on what principle parties who agree to accept a certain fixed sum in satisfaction of a claim can be said to compromise that claim, whereas if they agree to accept a sum which is to be fixed by some one else does not amount to a compromise.” There is here clear indication that an agreement to accept a future award can be treated as a compromise in the suit and, in our judgment, the Arbitration Act of 1940 in no way alters the position.” 19. There was however, some doubt as to the correctness of the view expressed in the earlier Full Bench of this Court and the earlier Division Bench aforementioned, and the Full Bench of this Court in Abdul Rahman v. Md. Siddique (AIR 1953 Madras 781 = 66 L.W. 480 (F.B.)) has settled the issue and pointed out that it is not correct to say that the law, as it existed as to the effect of an award in a proceeding outside the suit for being treated as a compromise or agreement, remained unaffected by the effect of Section 47 of the Arbitration Act. The Full Bench has held: “We are accordingly of opinion that under the Proviso to S. 47, an arbitration award obtained otherwise than in proceedings taken in accordance with the Act cannot without more be recognised as a compromise or adjustment of the suit; that no decree can be passed thereon under the provision of O. 23 R. 3; and that the decision in A.I.R. 1945 Mad. 294 ( Arumuga Mudaliar v. Balasubramania Mudaliar ) should be overruled. But if, after an award is made, the parties thereto agree to accept it, that wll be a compromise and a decree based thereon could be passed under O. 23, R. 3.” 20. We will not unnecessarily go into the judgments and the law on the subject, except to refer to a passage in the Full Bench judgment of this Court in Abdul Rahman v. Md. Siddique (AIR 1953 Madras 781 = 66 L.W. 480 (F.B.)): “But the question is whether the binding character of the award could be gone into in proceedings under O. 23, R. 3. It is no doubt laid down therein that the compromise should be lawful. Does that contemplate an enquiry into the validity of the award when it is challenged on the ground of misconduct of arbitrator? There is ample authority for the position that the word ‘lawful’ in O. 23, R. 3 has reference to the terms of the agreement and not to its binding character.. Enquiry into legal misconduct would, on this principle, be outside the scope of O. 23 R. 3. There is also no provision for the Court remitting an award for reconsideration; it can only either record it as an adjustment or reject it. Enquiry into legal misconduct would, on this principle, be outside the scope of O. 23 R. 3. There is also no provision for the Court remitting an award for reconsideration; it can only either record it as an adjustment or reject it. The parties to such an award, therefore, have not the same rights with reference thereto as parties to the awards in arbiration proceedings which fall within the scope of the Act; and the successful party to such an award would be in a better position, and the unsuccessful party in a worse position than if the award had been made in a Reference through court. It is difficult to believe that all this was intended by the Legislature. It is also significant that the Proviso requires the consent of the ‘parties interested.’ If the consent contemplated by the Proviso is merely to the agreement to refer to arbitration, when the words ‘consent of parties’ simply would have been sufficient and appropriate. If the consent required is for the award itself, then the use of the words ‘parties interested’ becomes apt and intelligible.” 21. What has transpired from the above is that an award cannot be taken for recording the Courts satisfaction that the defendant has satisfied the plaintiff wholly or in part in respect of the subject matter of the suit and that the Court can take an award only, if it is obtained otherwise, when all the parties interested consent for it being taken in to consideration as a compromise or adjustment of a suit by any Court before which the suit is pending. Any agreement for arbitration or any act of that nature before the award, however, cannot be taken into consideration by the Court under Order 23, Rule 3, Code of Civil Procedure. 22. To conclude, we record that the impugned judgment is inflicted by a serious error of law, and it has to be set aside. Since the suit has not proceeded at all and is closed by the impugned judgment before the issues are taken up for trial, we, with all constraints remit the case to the trial Court for further hearing in accordance with law and disposal of the suit, accordingly, as quickly as possible. The appeals are accordingly allowed. On the facts of this case, there shall be, however, no order as to costs.