BREAKING: Bombay High Court Orders Release of Ex- ICICI Bank CEO Chanda Kochhar, Her Husband In Loan Fraud Case

The division bench of Justice Revati Mohite Dere and Justice Prithvi Raj Chavan had reserved the petition for orders on Friday. 

The arrest is not as per section 41A and section 41(1)(b)(ii) of the CrPC., said the court while pronouncing the order.

The duo approached the court in two separate petitions and sought quashing of the FIR by the CBI and remand orders in the case regarding irregularities in loans granted to Venugopal Dhoot's Videocon Group by ICICI Bank between 2009-2012. They sought interim relief of release. They were booked under Sections 120B and 420 of the IPC and Sections 7, 13(2) r/w 13(1)(d) of the Prevention of Corruption Act.

The bench rejected the reasons cited by CBI for arrest in the arrest memo which included non-cooperation and non-disclosure of true facts of the case. The court also observed that the judge failed to properly record his own satisfaction while granting their custody to CBI. 

"The ground for arresting the petitioners as stated in the arrest memos, is unacceptable and is contrary to the reason(s)/ ground(s) on which a person can be arrested i.e. contrary to the mandate of Section 41(1)(b)(ii) (a) to (e)." 

"Article 20(3) is an essential safeguard in criminal cases and is meant to be a vital safeguard against torture and other coercive methods used by investigating agencies. Hence, merely because an accused does not confess, it cannot be said that the accused have not co-operated with the investigation," the bench added. 

The bench noted that after the registration of the Preliminary Enquiry against them by the CBI in December 2017, they had not only appeared pursuant to the summons issued but also provided documents. Moreover, from 2019 till June 2022, for around four years, neither were any summons issued to them nor was any communication was established by CBI.

Thereafter pursuant to notice under Section 41-A the petitioners appeared and they were arrested. "What was the reason to arrest the petitioners after four years is not spelt out in the arrest memos, as mandated by Section 41(1)(b)(ii) Cr.P.C. The reason given in the arrest memos to arrest the petitioners, having regard to the facts as stated aforesaid, appears to us, to be casual, mechanical and perfunctory, clearly without application of mind. The ground for arrest of the petitioners mentioned in the arrest memos is in clear breach of the mandatory provisions of Sections 41 and 41-A and 60-A of Cr.P.C," the bench observed. 

The court also noted that the Enforcement Directorate had earlier arrested Deepak Kochhar in a case under the PMLA for the same transactions. He was released after the Adjudicating Authority, PMLA refused to confirm the provisional attachment of various properties of NuPower Renewables Pvt. Ltd. (`NRPL’) and also the residential flat owned by the petitioner Deepak Kochhar. The adjudicating authority said they were not "proceeds of crime."

The court said that it was necessary for the magistrate to see if the arrest was legal and Section 41 of the CrPC was complied and such satisfaction wasn't an empty formality. 

"It is incumbent on the judicial officer authorising detention under Section 167 Cr.P.C, to be first satisfied that the arrest made is legal and in accordance with law and that all the constitutional rights of the person arrested, are satisfied. The same is not an empty formality."

Senior Advocate Amit Desai represented Chanda Kochhar while Senior Advocate Vikram Chaudhri appeared for her husband.

Their petition questioned the timing of the arrest as their son's wedding is scheduled in January itself. Kochhars' only son is scheduled to be married on January 15 and functions were to start shortly. This leads to the belief, that to be arrested on the eve of the wedding of her son, after 4 years of the FIR despite the settled law was actuated by malafides, the plea states.

The Case

The CBI began investigating the couple in January 2018 after reports that Videocon's Dhoot paid a firm he had allegedly set up with Deepak and two relatives, six months after his firm got a Rs 3,250 crore loan from ICICI Bank in 2012.

The irregularities were with regard to the grant of six high-value loans worth around Rs 1,575 crore to five firms of the Videocon Group between June 2009 and October 2011. The loans were granted in contravention of the rules and policy of sanctioning committee, the agency has alleged.

The CBI said that these loans were later termed as non-performing assets resulting in wrongful loss to ICICI bank and wrongful gain to the borrowers and accused persons. The total misappropriation is to the tune of Rs.1,730 crore as of April 26, 2012.

After the FIR was registered in 2019, Deepak Kochhar was summoned over eight times and submitted nearly 2500 pages of evidence, according to the petition. Chanda Kochhar has said she was summoned for the first time earlier this year and was arrested soon after she was summoned for the second time.

Arguments

Senior Advocate Amit Desai for Chanda Kochhar submitted that she hadn’t been summoned till July 2022. However, once summoned, she appeared. When summons were issued to her the second time, on December 15, 2022, she appeared on December 23, 2022 and after a perfunctory interrogation she was arrested, Desai said.

What prompted issuance of notice under Section 41A of the Cr.P.C. five months later on December 15, 2022, and the subsequent arrest?, he asked on Friday.

Section 41A of the CrPC, provides that a notice of appearance before police officer is required to be given in certain type of offences. “The law mandates that a person who complies with the notice must not be arrested unless the officer records reasons”, Desai said.

The arrest memo alleges that Kochhar hasn't been co-operating and disclosing true facts. Desai stated that there are 210 pages of statements and 810 pages of documents given by Kochhar to the investigating agency which are admissible against her. Still, the investigating officer is saying there is no cooperation and Kochhars are giving vague replies, Desai added.

Desai argued that Kochhar didn't know what was happening with her husband's business. He also pointed out that the Apex Court refused to interfere with the Bombay HC bail order in the PMLA case.

Desai further said that the officer who arrested Kochhar is a male officer, and the arrest memo doesn't show presence of a lady officer. He added that there was no sanction before registering FIR as mandated under section 17A of the Prevention of Corruption Act.

Senior Advocate Raja Thakare for the CBI argued that the Kochhars should have made an application before the trial court first.

He argued that the arrest was for proper investigation as Kochhars have been giving evasive answers to investigating officer’s pointed questions. When people are confronted, only then the truth comes out, he added.

Thakare said that Chanda Kochhar was not even touched by a male officer as it is a white-collar crime, and they weren’t handcuffed and taken.

Appearances – Sr Advocate Amit Desai, Advocates Kushal More, Rohan Dakshini and Pooja Kothari for Chanda Kochhar

Sr Advocate Vikram Chaudhri for Deepak Kochhar

Sr Advocate Raja Thakare for CBI