# In the matter of Merchem Limited TMA-43-KOB-2019 in C.P. No. 689 of 2017

> NCLT judgment dated 2020-03-16. Citation: TCN-2020-NCLT-01520. The case involves an application filed by Mr. Narendra Chimanlal Shah, Proprietor of M/s Hardik…

- **Court:** NCLT
- **Order date:** 16 Mar 2020
- **Citation:** TCN-2020-NCLT-01520
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/merchem-limited-tma-43-kob-2019-in-cp-no-689-of-2017-a95c181a

## Summary

### Background

The case involves an application filed by Mr. Narendra Chimanlal Shah, Proprietor of M/s Hardik Dye Chem Industries, against Mr. Ravindra Belayur and M/s Merchem Limited under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The applicant sought to be impleaded as an Operational Creditor in the Corporate Insolvency Resolution Process (CIRP) of M/s Merchem Limited and receive payment for outstanding dues related to the supply of Hydrogen Peroxide. The applicant claimed that M/s Merchem Limited failed to make payment within the agreed timeframe, leading to dishonored cheques and a subsequent summary suit filed in the Bombay City Civil Court. The 2nd Respondent, M/s Merchem Limited, was already undergoing CIRP initiated by an ex-employee, and the applicant's

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## Facts

Mr. Narendra Chimanlal Shah, the applicant, is the proprietor of M/s Hardik Dye Chem Industries, engaged in manufacturing and exporting dyes, pigments, and chemicals. M/s Merchem Limited, the 2nd respondent, placed a purchase order for 15,000 Kilo Grams of Hydrogen Peroxide, with payment due within 45 days of delivery. The applicant supplied the goods worth ₹5,51,718/-, but the 2nd respondent failed to make the payment within the stipulated time. The 2nd respondent issued a cheque dated 2014-01-20 for ₹5,52,483/-, which was dishonored due to insufficient funds. The applicant filed a Summary Suit No. 624 of 2015 in the Bombay City Civil Court for ₹5,51,718/- with 24% interest per annum. The Bombay City Civil Court passed an ex-parte order on 2016-09-01, directing the

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## Issues and analysis

### Issue 1: Whether the applicant's claim as an Operational Creditor should be admitted in the Corporate …

**Ratio:** The legal principle applied is that law comes to the rescue of those who are vigilant

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**Reasoning:** The court reasoned that the applicant submitted his claim much later after the public

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**Interpretation:** The interpretation is that the applicant, having knowledge of the CIRP, should

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** Ashok Kumar…; Veera Brahma Rao…
- **Appellants:** Narendra Chimanlal…
- **Respondents:** Merchem L…; Ravindra B…; +1 more

## Timeline

- **2014-01-20 — Cheque I…**: 2nd Respondent issued a cheque for…
- **2015-01-01 — Summary Sui…**: Applicant filed Summary Suit No. 624…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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