Bombay High Court closes case against Chanda Kochhar, bank officials in octroi evasion

The Bombay High Court has partially quashed criminal proceedings against senior ICICI Bank officials, including its former MD and CEO Chanda Kochhar, in a case alleging evasion of octroi on import of gold coins into Pune [ICICI Bank & Ors v. State of Maharashtra & Anr]

However, the Court allowed prosecution of the bank itself to continue.

In a judgment pronounced on December 8, Justice Neela Gokhale set aside the complaint and summons pending before a Pune court against five individual petitioners including former ICICI Bank MD & CEO Chanda Kochhar, former Deputy Managing Director Nachiket Mor, a legal department member and the Pune branch manager.

The criminal complaint was filed by the Pune Municipal Corporation (PMC) under Sections 398 and 401 of the Bombay Provincial Municipal Corporations Act, 1949 (BPMC Act) alleging octroi evasion on gold bullion and coins imported into the city between April 1, 2006 and August 31, 2009.

PMC claimed that ICICI Bank brought gold bullion and coins into the municipal limits for distribution without paying octroi, despite being issued notices on September 11 and October 3, 2009.

It computed unpaid octroi at about ₹1.27 crore.

Following these notices, the civic body lodged a complaint before the JMFC, which on November 20, 2009 issued summons to the bank and its officers.

The High Court had earlier stayed the personal appearance of the bank and its directors after observing that the complaint did not prima facie allege an intention to defraud the corporation.

The petitioners approached the High Court seeking quashing of the case on a specific ground that there is absence of specific allegations against the individual petitioners and hence, they cannot be held vicariously liable.

The Court examined the complaint and held that it contained only generic, indefinite averments, with no specific role ascribed to the CEO, directors, legal officer or branch manager in the alleged evasion.

Relying on several judgements, the Court held that mere designation as director or officer is not enough and the complaint must spell out how the person was in charge of and responsible for the conduct of the company’s business at the relevant time.

Justice Gokhale did not find any particulars and opined that prosecution cannot continue against the individual petitioners.

Hence, she proceeded to quash the complaint and summons issued against them and clarified that the case will continue only against the bank.

Advocates Faisal Ali Sayyed and MK Ambalal appeared for petitioners.

Advocates Abhijit P Kulkarni, Sweta Shah and Abhishek Roy appeared for PMC.

[Read Judgment]