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Chanda Kochhar, former Managing Director and Chief Executive Officer of ICICI Bank moved the Bombay High Court challenging her termination earlier this year and clawback of bonuses she received between April 2009 and March 2018.
A Division Bench of Justices Ranjit More and MS Karnik on Monday allowed Chanda Kochhar time to amend her petition challenging her termination by the Bank.
On Monday, Senior Counsel Darius Khambata (briefed by Veritas Legal) filed an affidavit in reply on behalf of ICICI Bank. The ICICI Bank submitted that the termination was as per the contractual clauses and that it is justified.
The ICICI Bank has submitted that it had sought approval from Reserve Bank of India (RBI) under Section 35B (1) (b) of the Banking Regulation Act, 1949 for the ‘termination of appointment’ of Kochhar.
Appearing for Kochhar, Senior Counsel Vikram Nankani and advocate Sujay Kantawala sought time from the Court to amend the petition in view of the reply filed by ICICI Bank. In this regard, Kochhar’s Counsel argued that ICICI Bank had obtained a post-facto approval for her termination from RBI, which it claimed is in contravention of the law. It was submitted
“The requirement of prior approval of RBI is mandatory and cannot be granted ex post facto and the non-fulfillment thereof is incurable and an afterthought.”
The Kochhar also sought to implead the RBI in the case.
The Court was hearing a writ plea filed by Kocchar challenging the purported ‘termination for cause’ communicated to her by the ICICI Bank in January, this year. It is claimed by the Kochhar that in October, last year, she had requested for early retirement and the same was accepted by the Board of Directors of the ICICI Bank.
A Committee with Justice BN Srikrishna on Board had been appointed to investigate allegations that Videocon Industries was granted loans by ICICI Bank and, in quid pro quo, Videocon invested in Nupower Renewables, the company of Deepak Kochhar i.e. Chanda Kochhar’s husband.
As per reports, Justice Srikrishna committee indicted Chanda Kochhar earlier this year. In turn, the Director Board of the ICICI Bank terminated her employment. The Board took action after it received and considered the enquiry report. As a result, on January 30, this year, the Board informed the petitioner 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.
Kochhar has now challenged ICICI’s denial of agreed remuneration as Managing Director and Chief Executive Officer, without previous approval of the Reserve Bank of India (RBI). She has contended before the High Court that,
“It is in breach of a statutory obligation under Section 35B of the Banking Regulation Act, 1949, that too, after having accepted the request of the petitioner for early retirement with effect from October 4, 2018, by the Board of Directors.”
It is informed that the Human Resources Officer of the ICICI Bank claimed that as per records, an aggregate of Rs. 7,41,36,777 has been paid to the Kochhar as a bonus over 10 years. The letter issued by the ICICI Bank on February 1, this year further reiterated that early retirement benefits given to the petitioner stand revoked. The petitioner claims that she replied to the said email and the letter and various correspondences were exchanged later on. In this backdrop, Kochhar has argued that,
“The action of the respondent purporting to terminate the service of the petitioner is ex-facie illegal, untenable and unsustainable in law and is liable to be set aside.”
The plea further states,
“The respondent could not have and ought not to have attempted to unilaterally treat the cessation of petitioner’s service due to early retirement from the respondent’s service as ‘termination for cause’ after accepting the early retirement…thus, impugned communications vide email dated January 30 and February 1 are illegal, non-est and void.”
Kochhar has been asked to serve a copy of the amendment plea to ICICI Bank and the RBI. The Court has posted matter for further hearing on December 9.