Legal Principle: A judgment which binds only the parties to a suit in which the judgment was passed is called judgment in personam; whereas a judgment which binds all men irrespective of whether they were party to suit or not is known as judgment in rem.Factual Situation: “Judgment of a competent court determining contractual obligations of the parties to a contract is an example of judgment in personam; but a judgment of a competent court declaring a party to be insolvent is an example of judgment in rem.” Comment on the correctness of this statement. (AILET 2016)Decision:

Each question consists of legal principle(s) (hereinafter referred to as 'principle') and facts. Such proposition may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this section. You have to apply the principles to the given facts to arrive at the most reasonable conclusion. Only one of the alternatives, i.e., (A), (B), (C), or (D) is the most reasonable conclusion. Remember: you must not rely on any principle except the principles that are given for every question.