Restructuring agreement limits on working capital cannot be enforced by writ to compel extra lender funding beyond the contractual ceiling.

The Delhi HC held that a restructuring agreement and RBI restructuring framework did not create an enforceable obligation to release additional working capital beyond the contractual ceiling, because the approved JLF package and JLRA limited funding to the amounts expressly set out and left any further enhancement to lender discretion. Projected cash flows and later communications could not override those terms or create a statutory right to extra disbursement. The Court also held that writ jurisdiction could not be used to compel specific performance of the financing arrangement or restrain recovery steps, especially after the borrower had moved to the S4A route and recovery or insolvency proceedings had already begun. The claim for mandamus was therefore rejected.

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Issues: Whether the lenders were bound under the JLRA and RBI restructuring framework to release working capital beyond Rs. 75 crores, and whether the writ court could direct enforcement of the alleged funding obligation and restrain recovery proceedings.

Analysis: The approved JLF package, as incorporated in the JLRA, was held to contain only the restructuring terms expressly set out in the agreement and schedules. The working capital facility was limited to the amounts specifically provided, while any further enhancement was made subject to the lenders' sole discretion. The projected cash flow statements and later communications did not create an enforceable contractual or statutory obligation to disburse additional funds beyond the approved amount. Even assuming delay or some deficiency in implementation, the Court held that specific enforcement of the financing arrangement could not be granted in writ jurisdiction, particularly after the borrower had moved to the S4A route and recovery / insolvency steps had already been triggered.

Conclusion: The claim that the banks were legally obliged to provide working capital beyond Rs. 75 crores was rejected, and no writ direction for enforcement of the restructuring package was warranted.

Final Conclusion: The appeal failed, and the dismissal of the writ petition was sustained because the appellant could not establish an enforceable right to additional funding under the JLRA or a basis for mandamus under the RBI circular framework.

Ratio Decidendi: Where a restructuring agreement expressly limits working capital support and reserves additional funding to lender discretion, the borrower cannot seek writ-based specific performance or compel disbursement beyond the contractual ceiling on the basis of projections or later conduct.

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