Jwala Prasad, J.
1. This appeal is directed against a decision of the District Judge of Gaya, dated the 8th May 1919. The plaintiffs decree holders are the appellants.
2. On the 16th June 1906, the defendant executed a registered mortgage bond in favour of the plaintiffs. On the fact of this bond, on the 19th December 1913, the plaintiffs obtained a, decree in terms of a compromise between the parties. The decree made the defendant liable for a sum of Rs. 1,650. This sum was stipulated to be paid in four installments: the first installment of Rs. 450 was to be paid on the Purnamashi Jeth, 1321, and the remaining installments of Rs. 400 each were to be paid on the Purnamashi Jeth of 1322, 1323 and 1324 respectively. One of the conditions in the compromise decree was that if default be made in payment of two consecutive installments, then the plaintiffs would have the right to realise the whole decretal amount at 2 per cent, per month from the date of the decree to the date of realization and after having the decree made absolute would have the right to realise the amount by sale of the mortgaged property, and if this be insufficient to satisfy the entire decree, to realise the balance from the person and other properties of the defendant.
3. On the 12th December 1916, the plaintiffs put in a petition before the Subordinate Judge for making the decree absolute in respect of the whole mortgage debt with interest, alleging that the defendant had defaulted in payment of two consecutive installments. On this the defendant filed an objection alleging payment of the mortgage-money.
4. On the 19th December 1917, upon a joint application of the parties, two Pleaders, named Babu Rameshwar Prasad and Babu Deokinandtin Prasad, were appointed arbitrators and the record was cent to them for submitting their award. The arbitrators after several extensions of time did not prepare any award, but returned the record with a report that to the personal knowledge of one of the arbitrators the defendant had paid the first two installments, but as regards the third and fourth installments there was no evidence. This was on the 14th May 1918. The parties also had filed a petition before the arbitrators that they were not willing to have the case decided by them. When the record came to Court, the plaintiffs filed a petition praying that the matter be decided by the Court itself.
5. The case was then adjourned to the 25th May for hearing objections.
6. On the 31st duly after hearing the parties, the learned Subordinate Judge refused to entertain the objection of the judgment debtor as to the payments alleged by him in satisfaction of the decree, on the ground that the said payments had not been made into Court under Order XXXIV, rule 5, nor were they certified to the Court. The learned Subordinate Judge accordingly directed a final decree to be drawn up.
7. On appeal by the defendant, the District Judge set aside the order of the Subordinate Judge and directed him "to proceed to the making of an order absolute either after duly superseding the arbitration, or after receiving an award." He was of opinion that there was no bar to the defendant proving the payments alleged by him towards the decree.
8. The decree holders have come to as in miscellaneous second appeal and dispute the correctness of the view taken by the District Judge.
9. The first ground urged is that the payments alleged by the judgment-debtor were not made into Court as is required by Order XXXIV, rule 5 of the Code of Civil Procedure. That rule applies to a decree prepared under the preceding rule 4. But the decree, with which we are concerned in the present case, was not prepared either in terms of rule 4 or in the form of decree provided for in Appendix D to the Code of Civil Procedure, Unlike the decree prepared under that rule, the present decree does not direct the payment of the full amount due thereunder on a fixed date, but by four installments. In a decree prepared under rule 4, no light to execute the decree accrues to the decree-holder until the date fixed for payment of the entire amount has elapsed and a final decree is prepared under rule 5. The decree-holder under the present decree is entitled to execute the decree on failure of payment only of a partial amount of the decree, namely, two consecutive installment. The mortgage decree in question was not prepared under Order XXXIV of the Code, and, therefore, rules 4 and 5 do not apply to it. It was prepared in accordance with the terms settled between the parties. The Code of Civil Procedure is not exhaustive and the provisions of Order XXXIV in the Code relating to the preparation of a mortgage decree are also not exhaustive. There is nothing to prevent the parties to a mortgage suit from dictating their own terms and form of the mortgage decree and when they have done so, they will be bound by the terms set forth in such a decree unless they are opposed to public policy. The terms in the present decree not being opposed to public policy, the parties will be governed by them, and not by Order XXXIV, rule 4 or 5. We, therefore, hold that that rule has no application to the present decree and the fact that payment was not made in accordance with that rule into Court does not preclude the defendant from proving the payments made by him and from obtaining a set-off towards the amount due under the decree.
10. Even if the said rule did apply, it does not bar the taking into account payments made by the judgment-debtor out of Court for the purpose of determining the amount to be entered in the final decree prepared under clause 2 of rule 5, No doubt clause (1) of that rule, unlike section 89 of the Transfer of Property Act which it has displaced, requires the payment to be made, into Court, of the amount due under the decree with subsequent costs. The object' is to discharge the mortgage decree absolutely and to direct the plaintiff to deliver up the documents which under the terms of his preliminary decree he is bound to deliver up and to re-transfer the mortgaged properties to the judgment-debtor. This clause is for the benefit of the judgment debtor and he cannot avail himself of it by splitting up the decretal amount and making payments of the decretal amount by installments. It does not, however, declare that payments out of Court will under no circumstances be recognized. Order XXI, rule 2, provides the means for having payments made out of Court recognized by the Court; it applies to all hinds of decrees. A mortgage decree is, therefore, not excluded from the operation of that rule and the holder of a mortgage decree can certify payments made to him out of Court at any time. The judgment debtor also by paying the decretal amount either in full or in part out of Court is entitled to have it certified, provided that he comes into Court within the time limited by clause (2) of rule 2 of Order XXL it would, therefore, be not correct to say that under no circumstances the Court will recognize payments made out of Court of money due under a mortgage decree, either in whole or in part. This view finds support in the case of Fir an Bibi v. Jitendra Mohan Mookerjee 40 Ind. Cas 815 : 21 C.W.N. 920 : 25 C.L.J. 553.
11. The learned Vakil on behalf of the decree holder appellant then contends that assuming that the provisions of Order XXI, rule 2, apply to a mortgage decree, the payments alleged by the judgment-debtor were not certified to the Court as required by that rule and hence could not be recognized. That contention could only be valid if the application of the decree holders for an order absolute, or for a final mortgage decree, were an application for execution of the decree. There was at one time conflict in the decisions on the point, but it has now been set at rest by the statutory declaration in rule 5 of Order XXXIV, that such an application is not an application for the execution of the decree, but is one for obtaining a final decree in the course of the suit. Clause (3) of rule 2, Order XXI, restricts the application of the rule only to the Court executing the decree. Hence payments made out of Court in respect of a mortgage decree can be recognized in a proceeding instituted by the decree-holders for obtaining an order absolute, or a final mortgage decree. This is but just and equitable. The decree-holder is not entitled to a final decree for a higher sum than what is actually due to him at the date of making that decree. This necessarily involves an investigation into allegations of payments out of Court on account of the decree in accordance with the view taken in the case of Hiramony Biswas v. Musa Khan 7 Ind. Cas. 625 : 16 C.L.J. 69 and in the case of Jogendra Prasad Narain Singh v. Gouri Sankar Prasad Sahu 40 Ind. Cas. 138 : 2 P.L.J. 53 : 2 P.L.W. 66. In the last case, the decree does not appear to be an installment decree, but mortgage-decree, pure and simple, under Order XXXIV, rule 4 of the Code, and hence the principle of that ruling would apply with greater force to the installment mortgage decree in the present case, which is not in any way controlled by rule 5 of Order XXXIV. Thus even if Order XXXIV, rule 5, did apply to the present decree, we do not see any force in the contention of the decree-holders that the payments alleged, by the judgment debtor could not be enforced or be given effect to in the proceeding instituted by the decree-holders praying for an order absolute for the sale of the mortgaged properties.
12. We have, however, held that Order XXXIV, rule 5, does not apply to the present decree and we agree with the view taken by the learned District Judge which is supported by authorities: vide Bechu Singh v. Bichharan Sahu 1 Ind. Cas. 677 : 10 C.L.J. 91 and Biswa Nath Prosad Mahata v. Bhagwandin Pandey 10 Ind. Cas. 536 : 14 C.L.J. 648. No doubt these cases were decided under section 89 of the Transfer of Property Act, but that section does not in any way differ from rule 5 of Order XXXIV of the Code of Civil Procedure which has taken its place on the point in question.
13. We do not see any force in the contention on behalf of the judgment debtors that the application of the decree-holders for a decree absolute was ultra tires inasmuch as there is no other provision under which the decree could be made absolute. There is an obvious fallacy in this reasoning. As already observed, rule 5 is not exhaustive and that the rights of the parties are to be governed by the terms of the consent decree; and the mode in which that decree is to be enforced is also to be determined by the said terms. In the case of Biswa Nath Prosad Mahata v. Bhagwandin Pandey 10 Ind. Cas. 536 : 14 C.L.J. 648 it was held that the parties were governed by the terms of the decree, and under those terms it was open to the decree holder to execute the decree and realise his amount by sale of the mortgaged properties without having recourse to section 89 of the Transfer of Property Act, which related to the obtaining of an order absolute before proceeding to execute the mortgage-decree. The case of Bechu Singh v. Bichharam Sahu 1 Ind. Cas. 677 : 10 C.L.J. 91 is an instance where the decree-holder under the terms of the installment decree was required to obtain an order absolute before proceeding against the property of the judgment-debtor. This was also the view taken in the case of Abir Paramanik v. Jahar Mahmud Mandal 34 C. 886 : 6 C.L.J. 95 : 11 C.W.N. 879 and was based upon the principle enunciated in the case of Pisani v. Attorney-General for Gibraltar (1874) 5 P.C. 516 : 30 L.T. 729 : 22 W.R. 900, where Sir Montague E, Smith in delivering the judgment of the Judicial Committee observed that "the right of parties as between themselves having been settled by agreement and the agreement not having been void, it is for the Court to determine in what way justice should be done to the parties." Vide also the case of Dutto Atmaram Hasabnis v. Shankar Dattatraya 21 Ind. Cas. 318 : 38 B. 32 : 15 Bom. L.R. 841 and Badri Narayan v. Kunj Behari Lal 18 Ind. Cas. 731 : 35 A. 178 : 11 A.L.J. 224.
14. In the present case there is a clear stipulation that in default of payment; of the installments mentioned in the compromise decree the decree holder would first get his decree made absolute and then realise the amount covered by it by sale of the mortgaged properties.
15. We, therefore, hold that the application of the decree-holders, dated the 12th December 1916, was not in any way irregular, illegal or ultra vires, and that the Court had jurisdiction to entertain the application and to make the order absolute.
16. The last point to be considered in this case is whether the Subordinate Judge had jurisdiction to proceed with the trial, of the issue between the parties which resulted in his order of the 1st July 1918, without having previously and expressly superseded the arbitration that was granted by him by his previous order. The facts relating to this point have already been detailed in the earlier part of this judgment. On the date fixed for the arbitration to submit their award, they returned the record without having prepared any award, stating that some of the payments alleged by the judgment-debtor were, within the personal knowledge of one of them. The parties expressed their unwillingness to have their cases decided by the arbitrators and the Court accordingly fixed a date for hearing objections. On the date so fixed for hearing objections, the Subordinate Judge decided the matter in dispute between the parties. The most regular and proper thing for him to do was to have passed an order superseding the arbitration and then to proceed to try the case. The procedure adopted by the Subordinate Judge, was no doubt irregular, but the authorities differ as to the effect of this irregularity. The principle seems to be that where, in fact, the reference to arbitration has become impossible and by implication the Court has superseded it, the jurisdiction of the Court to try the issue between the parties is not affected; but where the proceeding is still pending before the arbitrators and where from the circumstances it does not appear that it has in fact been superseded, the Court has no jurisdiction to try the case. The arbitrators in this case declined to submit then award and on the date fixed for its submission they intimated to the Court their intention of not going on with the arbitration, and the parties also expressed their unwillingness to processed with it. In these circumstances it may be contended that the irregularity of the Court in not having recorded a clear order of supersession of the arbitration perhaps did not vitiate the trial of the case by the Court. There is, however, no necessity of deciding this point inasmuch as by the order of the District Judge the case has been remanded to the Subordinate Judge and thus an opportunity has been given to him to proceed with the case and dispose of it in accordance with law. We do not, therefore, feel any hesitation in coming to the conclusion that the order of the District Judge is correct.
17. The result is that this appeal is dismissed with coats.
L.C. Adami, J.
I agree.
