Hi Nirghosa,
if you want to use the dha for cutting, I would strongly suggest that you create/or have made, a replacement handle. The blade seperating from the hilt in use would be extremely dangerous to you or others around you (at the time).....especially fully sharpened.
I would remove the dry rot, which would be powdery and soft and use resin to replace the damage ....only if the sword was just for show and you wanted to save the original fittings.
Kind Regards David