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ICICI Bank files monetary suit in Bombay HC seeking recovery of bonuses from Chanda Kochhar

Omkar Gokhale

The ICICI Bank submitted before the Bombay High Court on Monday that termination of its former Managing Director and Chief Executive Officer Chanda Kochhar was on account of her being in violation of the code of business conduct, ethics and failing to disclose conflict of interest.

Moreover, the ICICI Bank has filed a separate monetary suit seeking effect to Kochhar’s termination and recovery of various amounts from her.

In doing so, the ICICI Bank on Monday filed an additional affidavit giving composite reply before a Division Bench of Justices Ranjit More and S P Tavade on the merits of writ plea filed by Chanda Kochhar in the Bombay High Court challenging her termination and clawback of bonuses she received between April 2006 and March 2018.

An additional affidavit has been filed by one Abhishek Sinha, Group Head, Corporate Legal Group at ICICI Bank Ltd.

The affidavit states,

“I say that in light of mala fide conduct of the petitioner (Chanda Kochhar) in committing gross violations of the Code of Conduct of the said Respondent (ICICI Bank) as well as applicable laws despite being aware of the mandatory nature of all such provisions with mala fide intent to procure illegal benefits, it would be in the interest of justice if no reliefs are granted to the petitioner.”

… I say that the petitioner is mala fidely attempting to secure valuable stock options of the said respondent despite having found in violation of various provisions of said Respondent's policies and the Code of Conduct.”

Senior Counsel Darius Khambata briefed by Veritas Legal on Monday placed on record a reply on behalf of the ICICI Bank. The Court granted a week to Kochhar to go through it and respond during the next hearing.

Senior Counsel Vikram Nankani along with advocate Sujay Kantawala representing petitioner Chanda Kochhar pointed that respondent ICICI Bank has purportedly filed a civil monetary suit before the High Court seeking to give effect to her termination notice.

As per High Court website, ICICI Bank, on January 10 has filed a monetary suit seeking recovery of amounts towards claw back of bonuses given to Kochhar.

In view of this, Nankani argued,

“The matter is sub judice and the Court requires to take a note of it. Respondents should not overreach this Court’s jurisdiction."

The ICICI Bank in its affidavit filed on Monday referred to said suit and stated,

“ICICI has filed a suit seeking recovery of amounts towards the claw back of bonuses given to petitioner (Kochhar) from April 2006 to March 2018 pursuant to the termination of petitioner’s services. I say that the question regarding validity of petitioner’s service being terminated for cause is an issue that will arise in the Commercial suit and therefore, a petitioner ought not to raise the same issue in writ petition.”

“…On December 8, 2016, Kochhar had executed a claw back agreement with the bank pursuant to which ICICI is entitled to a return of the previously paid variable pay or deferred variable pay from the petitioner in the event of determination of a gross negligence or an integrity breached by Kochhar.”

The ICICI Bank in its earlier reply to the plea had submitted that it had sought due 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.

Last month, the Reserve Bank of India (RBI) submitted that approval to the termination of Chanda Kochhar was given as per law and granted after careful examination of Justice Srikrishna inquiry report on Chanda Kochhar.

This came after the Court had allowed Kochhar's plea to implead RBI and asked the Banking Regulator to file an affidavit in reply in that regard.

While a Single Judge Bench of the Bombay High Court will hear the monetary suit in due course, a Division Bench led by Justice Ranjit More has posted hearing on Kochhar’s writ plea on Monday, January 20.