Material adverse effect and continuing default justified loan recall, Section 7 admission, and fresh limitation from arbitral award.

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....NCLAT upheld recall of the loan facilities under the material adverse effect clause, holding that the lender could contractually form the opinion that the arrest of a personal guarantor and criminal investigation were likely to affect performance, so the recall was valid. It also held that the Section 7 applications were maintainable despite a pending challenge to the arbitral award and parallel execution, because the pleaded default began on failure to repay after recall and continued thereafter; insolvency proceedings are not barred merely because recovery steps were also taken. The tribunal further held that the arbitral award gave rise to a fresh limitation period, so the application filed within three years was not time-barred.....