The Supreme Court on Tuesday rejected the plea filed by Chanda Kochhar against the Bombay High Court order, which had dismissed her petition against being removed as the managing director and chief executive of the ICICI Bank, Bar and Bench reported.
“We are not inclined to interfere in the impugned order,” said the bench of Justices Sanjay Kishan Kaul, Dinesh Maheshwari and Hrishikesh Roy said. “This falls within the realm of private contract between bank and employee. I am sorry Mr [Mukul] Rohatgi, we cannot interfere.” Mukul Rohtagi is a senior advocate representing Kochhar.
Kochhar was sacked in January 2019, about six months after she had resigned following allegations of money laundering involving the bank and the Videocon Group. ICICI Bank had said it would stop the payment of unpaid benefits, including bonus, to her and retrieve all bonuses paid from April 2009 until March 2018 over her alleged role in giving a Rs 3,250-crore loan to Videocon, benefiting her husband Deepak Kochhar.
During Tuesday’s hearing, Rohatgi argued that it was not open to ICICI Bank for virtually recalling Kochhar’s retirement. The senior advocate also raised questions on the sacking of Kochhar, saying that the decision was taken without the prior approval of the Reserve Bank of India.
The court pointed out that the RBI gave its approval for terminating the former CEO of the ICICI Bank. Rohatgi replied: “The employee is not covered under 35B (of the Banking Regulation Act). How can my resignation be converted to termination?” The section relates to the provisions for appointing managing directors subject to the previous approval of the Reserve Bank.
The court, however, said that the bank did not terminate Kochhar as she decided to retire on her own. Rohtagi then pressed for posting the matter for next week but the court rejected the plea.
Kochhar had moved the Bombay High Court against her termination last year. ICICI Bank had told the High Court that Kochhar’s petition should be dismissed as it is a private bank and is administered under the Companies Act, not the state or its agency. A division bench of Justices NM Jamdar and MS Karnik accepted the bank’s argument.
Kochhar’s lawyer Vikram Nankani had argued that she was sacked months after the bank approved her voluntary resignation on October 5, 2018, and therefore, the termination is “illegal, untenable, and unsustainable in law”.
Kochhar had resigned from ICICI Bank in October 2018 after questions were raised about the loan that the bank had given the Videocon group in 2012. Six months after the loan was sanctioned, Videocon Managing Director Venugopal Dhoot allegedly gave crores of rupees to NuPower Renewables, founded by Deepak Kochhar.