Termination Of Services Without RBI's Approval In Breach Of Banking Regulation Act; Chanda Kochhar Moves Bombay HC

Termination Of Services Without RBI

The Bombay High Court on Monday heard Former ICICI bank CEO and MD Chanda Kochhar's writ petition challenging ICICI's decision to terminate her from service and deny her agreed remuneration in light of Justice BN Shrikrishna's report which highlighted that Kochhar had violated the bank's code of conduct.

Division bench of Justice Ranjit More and Justice MS Karnik allowed Chanda Kochhar's lawyer Senior Counsel Vikram Nankani to amend the petition after he said he wants to make RBI a party as ICICI bank needed approval from RBI before issuing the said termination letter.

Senior Counsel Darius Khambatta appeared on behalf of ICICI and submitted that the petition is not maintainable and should be dismissed.

Kochhar's petition states that she joined the respondent bank as a Management Trainee in April 0f 1984 and "over a period due to talent, integrity, performance abilities and efficiency" was promoted from time to time until finally being appointed as CEO and MD of the bank with effect from May 1, 2009.

The petition argues that Kochhar's request for an early retirement was accepted by the Board of Directors of ICICI bank and she would stand relieved from the bank's services with effect from October 4, 2018.

However, on January 30, 2019, TK Srirang, the Group Chief Human Resources Officer of ICICI bank told Kochhar via email that he has been directed by the Board of Directors to inform her that following the receipt of the enquiry report from Justice (Retd.) BN Srikrishna and due consideration of the enquiry report and deliberations, the Board of Directors has decided to treat the petitioner's separation from the Bank as "termination for cause" under the Bank's internal policies, schemes and the code of conduct with all attendant consequences (including revocation of existing and future entitlements such as any unpaid amount, unpaid bonus or increments, unvested stock options and vested but unexercised stock options and medical benefits) and requires clawback of all bonus paid from April 2009 until March 2018.

Srirang claimed that as per records of ICICI aggregate of Rs. 7.4 crores is paid to the petitioner as the bonus during the period April 2009 to March 2018. The said mail further reiterated that early retirement benefits given to the petitioner have been revoked with effect from close of business hours on January 30, 2019.

"Once having accepted the early retirement of the Petitioner and having relieved her from the services in the Respondent as MD and CEO and having agreed to pay / give the early retirement benefits in terms of the letter dated 4.10.2018, the Respondent's purported withdrawal thereof vide email dated 30.1.2019 is illegal and not binding on the Petitioner" petition states.

Thus, Kochhar sought a writ of certiorari to be issued to call for the records of her case and to quash and set aside the purported termination of her services for cause and denying her remunerationthrough email dated January 30, 2019 and letter dated February 2, 2019.

On January 24, 2019, Chanda, her husband Deepak Kochhar, and industrialist Venugopal Dhoot were named in a FIR by Central Bureau of investigation for cheating and defrauding ICICI Bank to the tune of Rs 1,730 crore. CBI filed a charge sheet against the three for committing offences punishable under Section 120B (criminal conspiracy) and 420 (cheating) of IPC, Sections 7 (taking gratification) and 13(2) (criminal misconduct) read with 13(1)(d) (pecuniary advantage) of the Prevention of Corruption Act.

Following this, ED lodged a case of money laundering against Chanda Kochhar in connection with loans disbursed by bank to the Videocon Group which later turned into Non-Performing Assets.