# In the matter of SRG Apparels Limited & Gradiant WTT O&M Services Pvt. Ltd. IBA-1406-2019 & IBA-112-2020

> NCLT judgment dated 2022-03-01. Citation: TCN-2022-NCLT-03931. Gradiant WTT O&M Services Pvt. Ltd. filed IBA/1406/2019 under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Mar 2022
- **Citation:** TCN-2022-NCLT-03931
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/srg-apparels-limited-gradiant-wtt-om-services-pvt-ltd-iba-1406-2019-iba-112-2020-403396e1

## Summary

### Background

Gradiant WTT O&M Services Pvt. Ltd. filed IBA/1406/2019 under Section 9 of the Insolvency and Bankruptcy Code, 2016, against SRG Apparels Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a total amount of Rs. 19,22,64,227/- along with interest at 18% p.a., citing a default date of 17.09.2019. The Corporate Debtor terminated the Waste Water Treatment Agreement on 17.09.2019, alleging false statements regarding treatment functioning. The Operational Creditor disputed this termination, claiming the Corporate Debtor failed to make payments as per the agreement. The Corporate Debtor argued the agreement was void as the Operational Creditor was not incorporated when the agreement was signed. IBA/112/2020 was

…

## Facts

Gradiant WTT O&M Services Pvt. Ltd. (Operational Creditor) and SRG Apparels Limited (Corporate Debtor) entered into an agreement for waste water treatment. The Operational Creditor installed equipment worth Rs. 8,50,00,000/- at the Corporate Debtor's premises. The Operational Creditor claimed Rs. 19,22,64,227/- as outstanding dues, including interest. The Corporate Debtor issued a cheque for Rs. 34,88,830/- on 15.09.2019, but later instructed the Operational Creditor not to deposit it. The Corporate Debtor terminated the agreement on 17.09.2019, alleging false statements regarding treatment functioning. The Operational Creditor disputed the termination and issued a demand notice on 30.09.2019. The Corporate Debtor replied on 10.10.2019, claiming the agreement was

…

## Issues and analysis

### Issue 1: Whether at the time of entering into an Agreement with the Operational Creditor, the Corporate …

**Ratio:** An agreement entered into with a company before its incorporation is not a valid

…

**Reasoning:** The Tribunal noted that the Operational Creditor was incorporated on 26.04.2019, while

…

**Interpretation:** The Tribunal interpreted that a company cannot enter into a legally binding

…

**Application:** Since the Operational Creditor was not incorporated when the agreement was

…

## Parties

- **Judges:** S. Ramath…; Anil Ku…
- **Appellants:** Gradiant WTT O&M…
- **Respondents:** SRG Apparels…

## Timeline

- **1999-04-05 — Corporate Debtor…**: SRG Apparels Limited…
- **2019-03-28 — Agreement…**: Agreement for Waste Water Treatment signed between Gradiant WTT O&M Services Pvt. Ltd.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/srg-apparels-limited-gradiant-wtt-om-services-pvt-ltd-iba-1406-2019-iba-112-2020-403396e1