Bombay HC asks RBI to respond on Chanda Kochhar’s plea against her termination from ICICI

The Bombay High Court on Monday directed Reserve Bank of India (RBI) to respond to the plea by Chanda Kochhar, former Managing Director and Chief Executive Officer of ICICI Bank, challenging her termination earlier this year.

A Division Bench of Justices Ranjit More and S P Tavade allowed Kochhar’s plea to implead RBI and asked the Banking Regulator to file an affidavit in reply by December 16.

Kochhar has moved the Bombay High Court challenging her termination earlier this year and clawback of bonuses she received between April 2009 and March 2018.

To this, the ICICI Bank filed an additional affidavit in reply on Monday and rejected claims made by Kochhar.

The ICICI Bank has 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.

In view of this, Senior Counsel Darius Khambata (briefed by Veritas Legal), representing ICICI Bank, challenged maintainability of Kochhar’s writ plea and claimed that existing disputes could be resolved through alternative remedies such as arbitration since they are contractual in nature.

It was submitted by Kochhar that the ICICI Bank wrote to RBI seeking her termination on February 5. Thereafter, the Banking Regulator accepted it on March 13 as ‘termination for cause’ based on Justice (Retired) BN Srikrishna inquiry report on Chanda Kochhar.

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.

In this regard, the ICICI’s additional affidavit states,

“Sometime in 2009 (at which time petitioner was serving as the MD and CEO of the respondent ICICI), NuPower Renewables Pvt Ltd, a company promoted by petitioner’s husband ( Deepak Kochhar), entered into non-arm’s length transactions with the Videocon Group, wherein NuPower Renewables received around INR 64 Crores from Videocon Group which effectively yielded the Videocon no return until 2016.”

To the submissions made by ICICI, senior Counsel Vikram Nankani and advocate Sujay Kantawala, appearing for Kochhar argued,

“The RBI did not question the ICICI Bank that if the termination was already done then why did you come to us. The question is if the bank had RBI’s approval or not. If the RBI approval is sought post facto, it is open and shut case. My client will deal with the inquiry report separately. It is a classic case of garbage in and garbage out.”

The Court has now posted the hearing on December 18.