Porter, J.

1. The decision of the trial court would appear to be correct if the preliminary decree had been passed after an adjustment had been made and all the terms agreed upon by way of adjustment had been carried out before the making of the preliminary decree. In that case the mortgagors remedy would be to appeal against the preliminary decree. For the reasons hereafter stated, however, the decision is wrong where the adjustment is made or carried out after the preliminary decree has been passed.

2. Unfortunately the respondent was not represented on the hearing, but their Lordships have heard a full and careful discussion of the points at issue which, apparently, have given rise to a conflict of view between various courts in India. Prima facie, a debtor should be entitled to take credit for any payments which he can prove to have made in respect of a mortgage debt. The only reason for prohibiting him from doing so would be that there was some valid law or regulation of the court to the contrary. Such regulations are, however, contended to exist, and reliance is placed on behalf of the respondent on Rules 2, 4 and 5 of Order 34 of the Code of Civil Procedure.

3. Rule 2 provides that in a suit for foreclosure, if the plaintiff succeeds the court shall pass a preliminary decree directing that if the defendant pays into court the sum due within the time fixed the plaintiff shall deliver up the documents of title and, if necessary, put the defendant in possession of the mortgaged property. Rule 4 adapts the same procedure to the case of an application for sale, and adds that in default of payment in accordance with the preliminary decree the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property be sold. Rule 5, Sub-rule 1, provides that where on or before the day fixed, or at any time before the confirmation of a sale made in pursuance of a final decree passed under Sub-rule 3 of this rule, the defendant makes payment into court of the amounts due, the court shall pass a final decree or order providing for the delivery up of documents and, if necessary, retransfer of the property, and that the defendant be put in possession. Sub-rule 3 provides that where payment in accordance with Sub-rule 1 has not been made the court shall, on application made by the plaintiff on that behalf, pass a final decree directing that the mortgaged property be sold. Rules 2 and 4 of this order, it was said, visualized, and the preliminary decree made in this case directed, payment into court, and r. 5 was mandatory in declaring that if that direction was not complied with the court must pass a final decree for sale.

4. Admittedly no payment into court had been made and therefore, it was contended, the court was obliged to pass a final decree for sale. It was at one time also contended that in any case any payment made in respect of the mortgage debt could not be relied on unless certified under Order 21, Rule 2. But, apart from the question whether the parties could not compromise a decree as to which see Oudh Commercial Bank, Ld. v. Tkakurain Bind Basni Kuer (1939) L.R. 66 I.A. 84, it has again and again been held in India that this rule only applies in execution, that execution does not begin until after a final order for sale has been passed, and that therefore the rule has no application when the question is whether or no a final decree for sale should be passed. Their Lordships agree with the courts in India in this respect.

5. As regards the main argument their Lordships do not stop to consider the question" whether the provisions of Rule 34 are, if they stood alone, sufficiently precise to prohibit the compromise of the preliminary decree in a mortgage suit by payment or adjustment in some way other than that directed by the preliminary decree, since the question of adjustment is specifically dealt with in Order 23, Rule 3, which is as follows: "Where it is proved to the satisfaction of the court that a suit "has 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 shall order such agreement, compromise "or satisfaction to be recorded and shall pass a decree in "accordance therewith so far as it relates to the suit."

6. The appellant contends that this rule makes direct provision for the circumstances of the present case, and says that so far from affirming the final decree the Chief Court should have recorded the satisfaction of the mortgage debt and passed a decree in accordance therewith provided it was proved to its satisfaction that the debt had been satisfied, and that to deny the appellant the opportunity of furnishing proof is to act in disregard of the express terms of the rule.

7. This question has given rise to a wide divergence of opinion in the courts of India. The stricter interpretation, which has been adopted by the Chief Court in this case, is that the terms of Order 34, Rule 5, which have express reference to the making of a final decree in the case of an application for sale in a mortgage suit, override the terms of Order 23, Rule 3, which is of general, but not of particular, application. This view has the support of the courts in Oudh and Lahore and, at any rate in the earlier cases, of the courts of Madras. Their Lordships have been referred to (i.) Tirloki Nath Dube v. Sadhu Ram Tewari (1927) A.I.R. (Oudh) 275; (ii.) Sewa Ram v. Parbku Dayal (1935) A.I.R. (Oudh) 313; (iii.) Mazbut Singh v. Mst. Indrani (1936) A.I.R. (Oudh) 152; (iv.) Mst. Durga Devi v. Nand Lal (1932) A.I.R. (Lah.) 2321; (v.) Piara Lal v. Bulaqi Mai & Sons (1935) A.I.R. (Lah.) 168; (vi.) Raja Ram v. Allahabad Bank, Ld. (1939) A.I.R. (Lah.) 79; and (vii.) Singa Raja v. Pethu Raja (1919) I.L.R. 42 M. 61. One may summarize the decisions in these cases as determining that where the preliminary decree directs payment into court no other method of payment is permissible; but that the harshness of this doctrine may be diminished in some three or four ways, i.e. (1.) acceptance of money in satisfaction or part satisfaction, (2.) acknowledgment of payment, (3.) payment not into court but in the presence of the presiding judge, (4.) possibly the payment if certified.

8. Except in these cases the court, it is said, cannot take notice of any payment out of court. The fourth exception, even if attention be paid only to the cases referred to above, is not easy to accept, since cases (i.) and (iv.) point out that Order 21, Rule 2, applies only to cases where execution has begun, and execution does not begin until the passing of the final decree. The other two exceptions seem to have been arrived at on no logical basis, but rather on the injustice which would be perpetrated if they were not recognized.

9. The courts of Allahabad and Patna appear to have taken a contrary view to those of Oudh and Lahore; the latest Madras case has cast some doubt on the earlier ones, and Calcutta seems to take a similar view to that of Allahabad and Patna. Reference may be made to (a) Inayat Khan v. Harbans Lal (1936) A.I.R. (All.) 9; (b) Munni Singh v. Collector of Benares (1939) A.I.R. (All.) 28 ; (c) Ram Niwas v. Ram Dayai (1939) A.I.R. (All.) 174; (d) Jogendra Prasad Narain Singh v. Gouri Shankar Prasad Sahti 3 Pat. L.J. 533; (e) Raja Bahadur Harihar Prasad Narain Singh v. Maharaj Kumar Gopal Saran Narain Singh (1935) I.L.R. 14 Pat. 488; (f) Palaniappa Chettiar v. Narayanan Chettiar (1935) 69 Mad. L.J. 765; and (g) Piran Bibi v. Jilendra Mohun Mukerjee (1917) 21 Cal. W.N. 920.

10. It is true that the first of these cases leaves open the question whether a mere payment between preliminary and final decree without any adjustment would constitute a discharge of liability when it says, "Whatever be the correct view on the question "whether money paid out of court in satisfaction of the decree "in whole or part can be recognized by a court when it is "invoked to pass a final decree, it cannot refuse to act on "Order 23, Rule 3, if the conditions required are fulfilled." In that case the court pointed out that there had been not a mere payment but an adjustment. Even so limited an application of Order 23, Rule 3, would suffice to establish the appellants contention in the present case, since adjustment followed by performance of the terms agreed is alleged.

11. The other cases, however, recognize that the suit continues up to final decree and consequently any adjustment or satisfaction up to that time must be taken into account. A decree holder need not, of course, agree to any adjustment or accept payment otherwise than into court, but in their Lordships opinion it is open to the debtor to allege and prove that an adjustment has taken place or payment in whole or in part has been made and received. Indeed, to hold otherwise is to disregard the opening words of the order, namely, "Where it is "proved to the satisfaction of the court...."

12. Their Lordships see no qualification to the wide terms of the order nor any grounds for limiting its application. Admittedly the suit continues until the final decree is passed, and there is no time limit for recording the agreement arrived at as there is under Order 21, Rule 2.

13. In the present case, therefore, the judge of the Civil Court should have satisfied himself as to whether any adjustment had been arrived at or payment made, and followed this inquiry by an appropriate decree under which a finding of full satisfaction would lead to the dismissal of the suit and partial satisfaction to a diminution of the indebtedness, whereas a finding that there had been no adjustment or satisfaction would be followed by a final decree for sale.

14. Their Lordships will accordingly humbly advise His Majesty that this appeal should be allowed, the final decree set aside, and that the Subordinate Court should be directed to hear evidence and decide whether or not satisfaction wholly or in part has been made in respect of the mortgage debt and to pass a decree accordingly.

15. The respondent must pay the costs of the appellant before their Lordships and in the courts in India.