Aditya Birla Housing Finance Limited vs Axis Bank Ltd

Judgment text excerpt

Neeta Sawant CARAP-95-2026 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMMERCIAL ARBITRATION APPLICATION NO. 95 OF 2026 Aditya Birla Housing Finance Limited ...Applicant V/s. Axis Bank Limited & Ors. ...Respondents ________________ Ms. Megha Gupta with Ms. Pranjali Khemnar and Ms. Lavanita Chityala i/b. Hedgehog & Fox LLP, for the Applicant. Mr. Cyrus Ardeshir, Senior Advocate with Mr. Rushil Mathur, Ms. Alessandra Shroff and Ms. Amrita Natarajan i.b. Mr. Mayur Shetty c/o. Kochhar & Co., for Respondent No.1. Mr. Mayank Tripathi, for Respondent Nos.2 to 5. ________________ CORAM: SANDEEP V. MARNE, J. RESERVED ON: 23 APRIL 2026 PRONOUNCED ON: 06 MAY 2026 JUDGMENT: 1) This is a Petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) raising an issue of seminal importance about permissibility to conduct arbitration under Section 11 of the Securitisation and Reconstruction of Financial Assets and Page No.1 of 41 6 May 2026 Neeta Sawant CARAP-95-2026 Enforcement of Security Interest Act, 2002 (SARFAESI Act) between a secured creditor (Axis Bank) and an entity (Applicant), who is prevented from becoming a secured creditor in respect of the property of the same borrowers. The case involves takeover of loan by the Applicant- Aditya Birla Housing Finance Ltd. (Aditya Birla) from Axis Bank. Towards the transaction of loan transfer, Aditya Birla credited the intimated outstanding amount in the loan account with Axis Bank. However due to some delay in such credit, an insignificant amount remained outstanding in the loan account with Axis Bank, resulting in non-closure of the loan account and on that ground, Axis Bank has refused to terminate its security interest over mortgaged properties by handing over tit