Chanda Kochhar, the former CEO of ICICI Bank, has not approached the court with cleans hands, the Bombay High Court said on Thursday while refusing to grant interim relief to Kochhar in her plea against the Bank.
Justice RI Chagla noted that Kochhar had told the Court that in September 2018, the bank had provided the benefits she would be entitled to under the Early Retirement Scheme.
However, she did not inform it that under the ERS, the bank had reserved its right to withdraw any features / benefits given under ERS in the event the employee did not comply with good conduct.
The Court also took into account the fact that there were allegations of misconduct against Kochhar which had been substantiated by the report of the enquiry committee.
Thus, the Court concluded that Kochhar had not come with clean hands.
"I find that Mrs. Kochhar has not come with clean hands in that she had feigned ignorance of the ERS (amended in 2016) by placing reliance upon letter dated 24th September, 2018 issued by the Board of ICICI Bank to her which provided the benefits she would be entitled to under the ERS, 2005. Thereafter ICICI Bank had placed on record the ERS 2005 (as amended in 2016) which was approved by Mrs. Kochhar as ICICI Bank’s MD and CEO which contained the clause that ICICI Bank had reserved its right to withdraw any features / benefits given under ERS in the event the employee did not comply with good conduct. Mrs. Kochhar had contended that this clause was not contained in the said letter dated 24th September, 2018 which had been issued to her. Mrs. Kochhar has thus suppressed the ERS amended in 2016 which she herself had approved," the Court said.
ICICI had purportedly received a complaint against Kochhar in 2018, after which it constituted an enquiry committee headed by retired judge of the Supreme Court, Justice BN Srikrishna to probe into the allegations.
In June 2018, Kochhar informed ICICI that she would go on leave till the enquiry is completed. By a letter dated October 3, 2018, she sought an early retirement which was accepted by ICICI subject to certain conditions.
In January 2019, the enquiry committee report was submitted which indicted Kochhar. After this, the Board treated the separation as ‘Termination for Cause’.
ICICI also revoked the retirement benefits of Kochhar.
Kochhar approached the High Court after the bank issued her a letter treating her services with the bank as “termination for cause” despite having accepted her earlier retirement.
She sought reinstatement of her Employee Stock Options (ESOPs) under the Employee Stock Option Scheme (ESOS).
In the suit filed before High Court, Kochhar sought specific performance of her entitlements and benefits that were unconditionally provided to her when the bank accepted her early retirement in 2018.
Senior Advocate Aspi Chinoy for Kochhar stated that accepting Kochhar’s offer of early retirement resulted in an agreement for retirement.
She argued that considering her resignation as termination will bring an end to benefits under ESOPs contract.
Senior Advocates Darius Khambata and Dr Birendra Saraf appearing for the bank argued that Kochhar is not entitled to any reliefs as interim relief as she has not approached this Court with clean hands.
They pointed out that the ESOPs claimed had already lapsed and added to the common pool of ESOPs which was distributed to other eligible employees of ICICI Bank.
Justice Chagla concluded that the revocation of the early retirement acceptance is valid and did not find any merit in the argument that once there is cessation of employer and employee relationship, then acceptance of early retirement cannot be revoked.
The judge also found no fault in the enquiry headed by Justice Srikrishna.
“Having considered that the acceptance of early retirement by ICICI Bank was on account of its not having complete knowledge of the facts, including non disclosure by Kochhar of various facts which were only learnt of upon receipt of the enquiry report by Justice Srikrishna (Retired), in my prima facie view, ICICI Bank was justified in revoking acceptance of early retirement vide communication dated 30th January, 2019” the judge held.
[Read order]