Foreign decree as debt and conclusive evidence under section 13 upheld for winding up proceedings.

A foreign decree may be treated as a debt capable of supporting a winding up petition where the decretal liability is not genuinely disputed and execution is not the creditor's only remedy. The decree was regarded as conclusive under section 13 of the Code of Civil Procedure because the foreign court had jurisdiction and adjudicated the claim on consideration of the evidence, even though the defendant did not fully participate. The decree was also not impeached as contrary to section 73 of the Indian Contract Act, since the damages were treated as flowing from direct and proximate loss. On that basis, the objections failed and the winding up petition was admitted for advertisement.

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Issues: (i) whether the amount covered by the foreign decree constituted a debt so as to support a winding up petition under the Companies Act, (ii) whether the foreign decree was conclusive and enforceable in view of section 13 of the Code of Civil Procedure, and (iii) whether the decree could be impeached on the ground that damages were awarded contrary to section 73 of the Indian Contract Act.

Issue (i): whether the amount covered by the foreign decree constituted a debt so as to support a winding up petition under the Companies Act.

Analysis: The existence of a decree debt was not disputed in principle. The objection that the creditor must first pursue execution was rejected because execution of a decree and a winding up petition are separate remedies available to a creditor. The statutory notice and alleged default were therefore capable of founding a winding up proceeding on the basis of the decretal amount.

Conclusion: The decretal amount could be treated as a debt for the purpose of the winding up petition.

Issue (ii): whether the foreign decree was conclusive and enforceable in view of section 13 of the Code of Civil Procedure.

Analysis: The foreign court's jurisdiction was upheld on the footing that the respondent's officers had visited the forum state for business discussions and the respondent had used a website to promote its products there. On merits, the decree was not treated as a mere formal ex parte order. The foreign court had examined the plaintiff's case and supporting materials and had adjudicated the claim after consideration of the evidence. The principles governing ex parte judgments did not assist the respondent because the real test is whether the matter was decided on consideration of the claim, not whether the defendant participated fully.

Conclusion: The foreign decree was held to be conclusive and not excluded by section 13 of the Code of Civil Procedure.

Issue (iii): whether the decree could be impeached on the ground that damages were awarded contrary to section 73 of the Indian Contract Act.

Analysis: The damages were found by the foreign court to arise from direct and proximate loss flowing from the breach. A possible difference in approach to assessment of damages did not make the decree contrary to Indian law, and no ground was made out to deny conclusiveness on that basis.

Conclusion: The decree was not shown to be contrary to section 73 of the Indian Contract Act.

Final Conclusion: The respondent's objections to the foreign decree failed, and the winding up petition was admitted for advertisement while the question of the company's financial position was left for final hearing.

Ratio Decidendi: A foreign ex parte decree is conclusive under section 13 of the Code of Civil Procedure if the foreign court had jurisdiction and the claim was adjudicated on consideration of the evidence, and the decretal amount may be treated as a debt supporting winding up proceedings.

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