The National Company Law Appellate Tribunal (NCLAT) dismissed...

The National Company Law Appellate Tribunal (NCLAT) dismissed the appeals filed against the order of the Adjudicating Authority directing lenders to release Non-Fund Based (NFB) facilities as per the approved Resolution Plan. The NCLAT held that when a Resolution Plan is approved, it is obligatory for all stakeholders to act in a manner to implement it. Except Bank of Baroda, no other lender had issued bank guarantees or letters of credit, despite the Resolution Plan providing for roll-over of NFB facilities. The company, being an EPC contractor, requires NFB facilities to undertake contracts and generate revenue for repayment obligations under the Resolution Plan. Non-release of NFB limits would jeopardize the company's operations and impact repayment to assenting creditors. The NFB Agreement must be interpreted harmoniously with the Resolution Plan to give effect to its intent and not render its clauses unworkable.