Amendment of default date in Section 95 proceedings upheld where it only placed relevant material on record

The date of default in a Section 95 application was treated as material to limitation and to adjudication of the personal guarantor's liability. The financial creditor sought to rely on material introduced in the rejoinder to amend the alleged default date, substituting a later notice as the basis for invocation of the personal guarantee. As the guarantor had already objected that the earlier SARFAESI notice did not amount to invocation, and the Adjudicating Authority had granted liberty to file a reply and oppose the revised date, permitting the amendment merely placed the relevant material on record. It did not finally decide limitation or invocation, and no prejudice was found.

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Issues: Whether the Financial Creditor could be permitted to amend the date of default in the Section 95 application by relying on material brought in the rejoinder, and whether the impugned order prejudiced the Personal Guarantor.

Analysis: The date of default was relevant to limitation and to the adjudication of the Section 95 application. The material originally relied upon referred to the notice under Section 13(2) of the SARFAESI Act, 2002, which was addressed to guarantors and mortgagors, while the rejoinder introduced the notice dated 22.12.2021 as the basis for the alleged invocation of the personal guarantee. The Personal Guarantor had already raised the objection that the earlier notice did not amount to invocation of the guarantee, and the Adjudicating Authority granted liberty to file a reply and oppose the revised date of default. In those circumstances, permitting the amendment only placed the relevant material on record for adjudication and did not finally determine the disputed issue of limitation or invocation of guarantee.

Conclusion: The amendment was rightly permitted and no interference was called for; the objection of prejudice was not accepted.

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