Mr. Dilipkumar Garodia vs Aditya Birla Housing Finance Limited

Comp. App. (AT) (Ins) No. 1932 of 2024 & I.A. No. 7155, 7156 of 2024 IN THE MATTER OF: Dilipkumar Garodia ...Appellant

Versus

Aditya Birla Housing Finance Ltd ...Respondent

Present: For Appellant : Mr. Malak Bhatt, Arpit Singhvi, Neeha Nagpal, Somya Saxena, Adv. For Respondent : Mr. Palash S Singhai, Harshal Sareen, Adv. for R1 Mr. Nazia Parveen, Adv. for R2

With Comp. App. (AT) (Ins) No. 1933 of 2024 & I.A. No. 7157, 7158 of 2024 IN THE MATTER OF: Mrs. Anjudevi Dilipkumar Garodia ...Appellant

Versus

Aditya Birla Housing Finance Ltd ...Respondent

Present: For Appellant : Mr. Arpit Singhvi, Adv. For Respondent : Mr. Palash S Singhai, Harshal Sareen, Adv. for R1

ORDER

(Virtual Mode)

Per: Justice Rakesh Kumar Jain (Oral)

09.09.2025: This order shall dispose of two appeal bearing CA (AT) (Ins)

No. 1932 of 2024 and CA (AT) (Ins) No. 1933 of 2024 because the issues

involved in these two appeals are common, however, for the sake of

convenience, the facts are being extracted from CA (AT) (Ins) No. 1932 of 2024.

2. The Appellant is aggrieved against the order dated 27.09.2024 by which

an application filed under Section 94 of the Code has been dismissed on the ground that the application has been filed to avoid the action initiated by the

Financial Creditor before the DRT by taking advantage of mortarium which

may come to the rescue of the Applicant (personal guarantor) which

automatically comes into play on filing the application under Section 94, has

been dismissed.

3. Facts narrated by the Appellant in court are that Rajshree Silk Mills

Pvt. Ltd. secured a loan from the two entities, namely, Aditya Birla Housing

Finance Ltd. on 12.08.2023 and Standard Chartered Bank on 10.11.2022.

4. The said loan was secured by both the Appellants as personal

guarantors and executed their respective guarantee deeds.

5. It is submitted that they had also mortgaged their personal properties

as collateral securities by executing mortgaged deed.

6. Counsel for the appellant has submitted that Standard Chartered Bank

issued notice under Section 13(2) of the SARFAESI Act, 2002 (Act) on

21.03.2024 followed by notice under Section 14(2) of the Aditya Birla Housing

Finance Ltd.

7. It is further submitted that both Standard Chartered Bank and Aditya

Birla Housing Finance Ltd. issued recall notice for the debt to the borrower

as well as guarantors on 02.04.2024.

8. After that, the borrower filed an application under Section 10 and the

present appellants filed their application under Section 94 on 18.09.2024.

This application has been dismissed by the Tribunal by the impugned order

on the ground that the application has been filed as a ploy to evade the

provisions of the Code because as soon as the application is filed under Section 94, mortarium shall come into play in terms of Section 96

automatically.

9. Counsel for the Appellant has submitted that the impugned order is

patently illegal because it has been held by the Hon'ble Supreme Court in the

case of Dilip B Jiwrajka Vs. Union of India & Ors., (2024) 5 SCC 435 that the

Tribunal cannot enter into adjudicatory intervention at the stage of Section

97(5). In this regard, para 72 of the aforesaid judgment is also reproduced as

under:-

"We are of the view that the submission that an adjudicatory role should be interposed at the stage of Section 97(5) cannot be accepted. The power which is conferred on the adjudicating authority at the stage of filing of an application is to appoint a resolution professional. The appointment of a resolution professional is for the purpose of a facilitative exercise which is contemplated by Section 99 which, as we have noted, eventually ends in a report either recommending the acceptance or rejection of the application. Bearing in mind the statutory scheme, it would be impermissible for this Court to allow for the adjudicatory intervention of the adjudicating authority in adjudicating what is described as a jurisdictional question at the stage of Section 97(5)."

10. Counsel for Respondent has fairly conceded in regard to the law laid

down by the Hon'ble Supreme Court in the case of Dilip B Jiwrajka (Supra).

11. Thus, in view of the aforesaid facts and circumstances, we are of the

considered opinion that the Tribunal has dismissed the application filed by

the Appellant under Section 94 in a haste as its jurisdiction to intervene

cannot start till the report is filed by the RP under Section 99 of the Code,

therefore, the present appeals are allowed and the impugned order is set

aside. The Company Petition No. IB/285/AHM/2024 is restored to its original

number. The matter is remanded back to the Tribunal to decide the application in accordance with law. The parties are directed to appear before

the Tribunal 15th October, 2025. No costs.

13. Before parting with this order, we may hassen to add that while allowing

both these appeals, we have not made any observation about the merit of the

case.

I.A.s, if any, pending are closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Md. Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sc/RR