Supreme Court Issues Notice On CBI's Challenge Against Bail Granted To Chanda Kochhar & Husband in ICICI Bank Videocon Load Fraud Case

When ASG Raju assured that he would ask his counterpart in the high court to file an appropriate application, Justice Bose questioned whether the original order from January 9 was 'appealable'. Adjourning the brief hearing until today, Justice Bose said to ASG Raju, "You'll have to challenge subsequent orders. We'll list it on Monday. Come back after taking instructions on whether invalidating this order will be effective or not."

During today's hearing, the law office argued that the high court order is 'absolutely perverse' since "it proceeded on a wrong assumption the offence which the Kochhars had allegedly committed is punishable with seven years' imprisonment. "But the court did not consider the offence under Section 409 of the Indian Penal Code," ASG Raju added.

"How is Section 409 attracted? It's a private sector bank," Justice Bose asked. Under this provision, a public servant, or a banker, merchant, or agent is punished for a criminal breach of trust with either life imprisonment or imprisonment for up to ten years, along with a fine.

"As far as the monies are concerned, it is public monies. Bank officers considered to be public servants under Prevention of Corruption Act, even in the private sector," ASG Raju explained.

"Alright, issue notice," Justice Bose directed, before asking the law officer, "When is the other matter coming? We want to take them up together."

"Only notice has been issued in this. No date has been given yet," ASG Raju answered, referring to another plea by the Central Bureau of Investigation challenging an interim bail order passed by the high court in favour of Videocon Group Chairman Venugopal Dhoot in the loan fraud case. Notice was issued in July by a coordinate bench headed by Justice AS Bopanna in the other petition. 

Initially, Justice Bose indicated that they would prefer hearing both matters together. But when ASG Raju asked for the next date of hearing to be specified, the judge said, "We don't know. Because that matter is not before this bench..."

"Whichever bench it may go before. It's an open-and-shut case," ASG Raju insisted.

"But we cannot fix the date for that matter," Justice Bose explained. In response, the law officer argued against tagging of the two matters. "Then let it not be tagged. The orders are different..."

The bench agreed. Justice Bose pronounced, "Notice issued. Returnable after three weeks."

Background

Chanda Kochhar, who began her career at the ICICI Bank as a trainee officer in 1984 and rose through the ranks, served as the managing director and chief executive officer of the bank from May 1, 2009, until October 2018. Her last appointment’s term was set to end on March 31, 2019. However, in May 2018, the ICICI Bank initiated a private inquiry against Kochhar following a whistle-blower’s complaint, leading to her taking leave. However, as per the Banking Regulation Act, 1949, the managing director of a bank is entitled to no more than four months of leave, prompting Kochhar to apply for early retirement in October 2018, an application that was accepted by the bank. Subsequently, the bank reclassified her early retirement as a termination in early 2019 after the inquiry found violations related to disclosure norms about conflicts of interest. These issues primarily revolved around loans granted to the Videocon Group and its connection to her husband, Deepak Kochhar. The bank treated her October 2018 exit as a dismissal rather than a regular resignation, prompting her to file a lawsuit against the bank. A special leave petition against a Bombay High Court order refusing her interim relief is also pending before the Supreme Court.

Since 2018, the Central Bureau of Investigation has also been probing the allegations of financial irregularities against Kochhar and her husband in connection with the grant by the ICICI Bank of six high-value loans worth around Rs 1,575 crores to firms owned by Venugopal Dhoot's Videocon Group between June 2009 and October 2011. The central agency has alleged that these loans were granted in contravention of the rules and policies of the sanctioning committee and were later termed as non-performing assets, resulting in wrongful loss to the bank and wrongful gain to the accused.

The investigation resulted in a first information report (FIR) in 2019, and the couple was booked under Sections 120B and 420 of the Indian Penal Code, 1860 and Sections 7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. In December of last year, the former ICICI Bank CEO and her husband were arrested by the Central Bureau of Investigation. The arrests were challenged in separate petitions filed by the husband-wife duo seeking the quashing of the central agency's FIR and the remand orders. By way of interim relief, the Kochhars also sought to be released on bail.

In January, the Bombay High Court issued an interim order directing their release, holding that the arrest was not in accordance with the provisions of the Criminal Procedure Code. The bench led by Justice Revati Mohite Dere also rejected the reasons provided by the CBI for the arrest, including allegations of non-cooperation and non-disclosure of facts. It observed that the grounds for arrest were contrary to the legal provisions governing arrests. The bench emphasised the importance of Article 20(3) as a safeguard in criminal cases and stated that the mere absence of a confession does not imply non-cooperation with the investigation. The court also noted that the Kochhars had cooperated with the investigation by responding to the agency's summonses and providing documents. Furthermore, the bench observed that there had been no communication from the Central Bureau of Investigation for nearly four years, from 2019 to June 2022, during which no summons had been issued to the petitioners.

The Bombay High Court's order granting bail has now been challenged by the Central Bureau of Investigation in a special leave petition.

Case Details

Central Bureau of Investigation v. Chanda Kochhar | Diary No. 13670 of 2023