The judgment emphasizes the importance of jurisdiction, the conclusive nature of a decree based on the merits of the case, and the applicability of foreign judgments in Indian legal proceedings.

Ranjan Gogoi, J.

1. The winding up of the respondent-company, on the ground of its inability to pay its debts within the meaning of Section 433(e) of the Companies Act, 1956, has been prayed for by means of the present company petition. The debt, in respect of which the alleged default has occurred, is claimed to be due under a decree passed by the District Court of the United States of America, on a claim made by the company petitioner, as the plaintiff, against the respondent-company, as the defendant. The claim, which has been decreed, is on account of a breach of an implied warranty as to the quality of goods supplied by the respondent-company to the petitioner, thereby causing loss and damage to the petitioner-company. While the facts of the claim adjudicated by the District Court in the United States of America need not be recited, it must be noticed that in the proceeding before the United States Court, leading to the decree, the defendant, i.e., the respondent-company appeared pursuant to the summons received and filed an application asserting lack of jurisdiction of the court. No written statement setting up any particular defence was filed by the respondent-company, i.e., the defendant in the suit, who had subsequently withdrawn from the said proceeding by filing an application to that effect. It must also be noticed, at this stage, that the decree in respect of which the default, is alleged to have occurred, has attained finality, inasmuch as, no appeal against the said decree has been filed by the respondent-company. At the same time, it must be noted that no proceeding for execution of the decree, passed by the District Court of the United States of America, has been initiated by the petitioner-company, i.e., the decree holder either in the United States or in the courts in India.

2. Arguing for the winding up of the respondent-company, Dr. A. K. Saraf, learned counsel for the petitioner, has submitted that the decree passed by the District Court of the United States of America, under which the amount has been claimed to be due, is a valid decree which has attained finality in law. The amount due, in terms of the decree is a debt within the meaning of section 433(e) of the Companies Act, 1956, and the respondent-company is a debtor whereas the petitioner-company is the creditor in respect of the amount covered by the decree. The statutory notice under Section 434 of the Companies Act, 1956, has been served on the respondent-company and default in the matter of payment of the dues having occurred, the respondent-company is liable to be wound up and at the first instance, the present winding up petition is required to be advertised, argues learned counsel for the petitioner.

3. Mrs. M. Hazarika, learned counsel appearing for the respondent-company does not dispute and for good reasons that the amount decreed would amount to a debt under Section 433(e) of the Companies Act. However, learned counsel for the respondent-company has submitted that the remedy of the petitioner-company lies in execution of the decree and admittedly, as no execution proceedings have been initiated by the petitioner-company, the instant company petition would not be maintainable. Learned counsel for the respondent has further submitted that the petitioner-company ought not be allowed to pursue the instant company application as there is a veiled attempt to pressurise the respondent-company to pay the amount due under the decree, by means of the present company application for winding up. Learned counsel for the respondent-company has further argued that the decree passed by the United States District Court cannot be said to be conclusive of the adjudication made on the ground that the decree in question has not been passed by a court of competent jurisdiction. It is not a decree on the merits of the case and that apart, the award of damages in the decree is contrary to the law in India as contained in Section 73 of the Indian Contract A