I would advise you to keep your eyes on both of them.
The reason is both have some pros and cons, pajero is more comfortable and in your budget you can get 2003-04 models but its parts are costly, prado on the otherhand with 1KZ is rugged and parts are cheap but the initial price fro a maintained ride maybe higher than 2.2 m as well.
So try to find a ride which is thoroughly maintained with proper paperwork and enjoy the ride.
Do keep in mind that whatever you will buy you need around 2 lacs for its preventive maintenance incl. oils, filters, belts, suspension bushes etc.
Secondly both 1KZ and 4M40 are very good engines within their limits.
Dont expect to drive on 140 km/h on motorway with 7 adults onboard on a hot summer day around 42-43C.
These SUVs are not for high speed cruising the main factor being air resistance at high speed.
Congratulations and welcome to the SUV family, rest assured once you get its addiction you will use it as daily runner as I am doing for last 7-8 months.