INAYAT KHAN Vs. HARBANS LAL

JUDGEMENT

(1.) This is an appeal under Order 43, Rule 1(m), Civil P.C., from. an order passed by the learned Subordinate Judge, Meerut. The plaintiff-respondent obtained a preliminary decree for sale in a suit on mortgage. The mortgagor was directed to pay Rs. 12,881-4-0-within six months from the date of the.-. preliminary decree, the 22 May, 1930. An appeal from this decree to this Court was dismissed. The mortgagee applied for a final decree under Order 34, Rule 5 Civil P.C. He alleged that no payment, had been made in Court, as directed by the preliminary decree. The mortgagor the appellant before us, objected, by a, petition dated 26th August 1933, on the allegation that after the dismissal. of the appeal by the High Court a settlement was arrived at between the parties that, if Rs. 8,000 were paid by the mortgagor immediately and a sum of Rupees. 4,000 were paid in two instalments by the months of June 1934, the entire mortgage money would be taken to have been satisfied, and that accordingly the mortgagor paid Rs. 8,000 on 4 June, 1933, for which a receipt was granted by the mortgagee, and that the mortgagor was ready to pay Rs. 2,000, the first. of the two instalments above referred to. If this allegation is true, the time fixed for payment of the last instalment had not expired when the mortgagor preferred his objection.

(2.) The lower Court dismissed the objection without recording a finding as to whether this settlement, alleged by the mortgagor, had, in fact, taken place. The ground on which the order of the lower Court proceeds is that no payment out of Court can be recognized by the Court passing a final decree under Order 34, Rule 5, as the preliminary decree, which was drawn up in terms of Order 34, Rule 4, Civil P.C. provides that, if the mortgage money is not deposited in Court, a final decree for sale shall be passed. The contention which found favour with the lower Court was that, even if the mortgagor paid Rs. 8,000, as alleged by him, he could not successfully resist the mortgagee's application for a final decree in respect of the entire mortgage money payable under the preliminary decree. It is argued on behalf of the mortgagor that a mortgage suit does not terminate with the passing of the preliminary decree and that proceedings in such suit continue till a final decree is passed. Accordingly, it is contended, any adjustment agreed to by the parties must be recorded and must be given effect to under Order 23, Rule 3, Civil P.C.

(3.) Whatever may be the correct view on the question whether money paid out of Court in satisfaction of the preliminary decree, wholly or in part, can be recognized by a Court when it is moved to pass a final decree-a point on which we express no opinion-it seems to us that the Court cannot refuse to act under Order 23, Rule 3, Civil P.C. if the conditions required by that rule are fulfilled, so that if a suit had been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court has no option but to order that such agreement, compromise or satisfaction be recorded, and to pass a decree in accordance therewith. This is a necessary corollary of the view taken by this Court that a preliminary decree does not terminate the suit, which continues till a final decree is passed. Once a suit is finally disposed of Order 23, Rule 3, cannot have any application; but so long as the suit is pending, it is open to the parties to enter into a compromise or otherwise adjust their differences. Great stress is laid on behalf of the respondent on the imperative language of the preliminary decree that, if the amount declared due by the preliminary decree, is not paid in Court on or before the date fixed for payment, the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property, or a sufficient part thereof, be sold....