Former ICICI Bank MD and CEO Chanda Kochhar. (Express photo by Pradip Das)
In a setback to former ICICI Bank MD and CEO Chanda Kochhar, the Bombay High Court Thursday dismissed her plea challenging her termination last year and clawback of bonuses she received until March 2018.
A division bench of Justices Nitin Jamdar and Makarand S Karnik passed a ruling on Kochhar's plea and said, "As a result, we uphold preliminary objections by respondent (ICICI Bank). Writ petition is dismissed."
Appearing for Kochhar, senior counsel Vikram Nankani had argued that Reserve Bank of India's (RBIs) approval to termination was post-facto and against the Banking Regulation Act.
"It is a mechanical rubber stamping by RBI without application of mind and giving lip service to the ICICI Bank," Nankani had submitted.
Kochhar had claimed that she had requested in October 2018 for early retirement and the same was accepted by the Board of Directors of ICICI Bank.
The committee of Justice (retired) B N Shrikrishna was appointed to investigate the allegation that Videocon Industries was granted loans by ICICI Bank and, in quid pro quo, it invested in Kochhar's husband Deepak Kochhar’s company, Nupower Renewables.
However, Justice Shrikrishna committee indicted Kochhar in January last year. In turn, the Director Board of the ICICI Bank terminated her employment. The Board took an action after it received and considered the enquiry report with due deliberations.
As a result, on January 30 last year, the Board informed Kochhar that it has decided to treat her separation from the Bank as ‘termination for cause’ under the internal policies and requires clawback of all bonus paid from April 2009 until March 2018.
Thereafter, Kochhar challenged denial by the employer for agreed remuneration as Managing Director and Chief Executive Officer, without previous approval of the RBI.
During earlier hearings, ICICI Bank had argued that termination of its former CEO was on account of her being in violation of the code of business conduct, ethics, and failing to disclose conflict of interest.
The ICICI Bank had also submitted that it had sought due approval from the RBI under Section 35B (1) (b) of the Banking Regulation Act, 1949, for the 'termination of appointment' of Kochhar.
Opposing Kochhar's plea, senior counsel Darius Khambata had submitted that there was nothing 'averse' in the termination order as the bank was not providing any statutory or sovereign function. The contract between the ICICI Bank and Kochhar was private and did not fall under the purview of government services, the bank submitted.
It was also submitted by the bank that the directors had decided to treat her separation from the bank as 'termination of cause' under internal policies based on Justice Shrikrishna's report.
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Moreover, senior counsel Venkatesh Dhond, who appeared for the RBI, submitted that approval to the termination of Kochhar was given as per law and granted after careful examination of Justice Srikrishna inquiry report on Chanda Kochhar.
ICICI Bank has also filed a civil monetary suit before the high court seeking recovery of amounts towards clawback of bonuses given to Kochhar and seeking to give effect to hear termination cause. The high court will hear it in due course.