Petitioner's Service Conditions Not Governed By Any Statute; Bombay HC Dismisses Chanda Kochhaar's Challenge To Termination From ICICI [Read Judgment]

The Bombay High Court on Thursday dismissed a petition filed by Chanda Kochhar, former Managing Director and CEO of ICICI Bank observing that the said challenge was not maintainable as the petitioner's service conditions are not covered by any statute.Division bench of Justice Nitin Jamdar and Justice Makrand Subhash Karnik upheld the preliminary objection raised by ICICI bank regarding maintainability of the petition since the bank was not a public body and that the issue was at best a contractual dispute between an employer and an employee.In January 2019, Chanda, her husband Deepak Kochhar, and industrialist Venugopal Dhoot were named in a FIR by Central Bureau of investigation for cheating and defrauding ICICI Bank to the tune of Rs 1,730 crore. CBI filed a charge sheet against the three for committing offences punishable under Section 120B (criminal conspiracy) and 420 (cheating) of IPC, Sections 7 (taking gratification) and 13(2) (criminal misconduct) read with 13(1)(d) (pecuniary advantage) of the Prevention of Corruption Act.Following this, ED also lodged a case of money laundering against Chanda Kochhar in connection with loans disbursed by bank to the Videocon Group which later turned into Non-Performing Assets.Case BackgroundChanda Kochhar joined ICICI Bank on April 17, 1984 as a management trainee. After 25 years of service, she was a Managing Director and Chief Executive Officer from May 1, 2009 to March 31, 2014. Thereafter, she was re-appointed as a Managing Director and Chief Executive Officer for five more years till March 2019. According to the ICICI bank, complaints were received against the Kochhar and in a meeting held on May 29, 2018, an enquiry headed by Justice (retd) BN Srikrishna was constituted. In June 2018, Kochhar informed the bank that she would go on leave till the enquiry is completed. However, by a letter dated October 3, 2018, the petitioner sought an early retirement. The respondent bank, in a communication dated October 4, 2018 accepted the request for early retirement subject to certain conditions. Then, the report of enquiry conducted by Justice Srikrishna was submitted. There were adverse observations against the petitioner's actions. Consequently, in a meeting held on January 30, 2019, the Board of ICICI treated the separation of the petitioner's service as a termination for cause. A communication to that effect was issued to the petitioner. By further communication, ICICI revoked the retirement benefits of the petitioner. In November 2019, Kochhar filed the present writ petition challenging her termination praying for a declaration that the communication accepting the request of the petitioner for early retirement, is valid. She challenged the order of termination and sought to refrain ICICI from recovering and/or cancelling the benefits granted to her for early retirement. Petitioner sought a declaration to exercise the benefits of stock options. SubmissionsSenior Advocate Vikram Nankani appeared on behalf of the petitioner, Senior Advocates Darius Khambata and Mustafa Doctor for ICICI bank Senior Advocates for ICICI and Senior Advocate Venkatesh Dhond for Reserve Bank of India. Khambatta raised a preliminary objection on behalf of ICICI regarding maintainability of the said challenge. He submitted that ICICI is not an authority under Article 12 of the Constitution of India, it performs no public duty. There is no public law element in its functioning, in fact it is only a private bank having a purely private character. The services of the Petitioner are not governed by any statute, but it is a purely contractual relationship with ICICI. The challenge to the order of Reserve Bank is not bonafide, and it is only to create a case for maintainability for an otherwise contractual dispute Khambatta argued.On the other hand Nankani submitted that the services of the petitioner are governed by Section 35B(1)(b) of the Banking Regulation Act. The Reserve Bank granting approval for termination directly affects the rights of the petitioner, and therefore such order is justiciable in writ jurisdiction, he said. The impugned order of Reserve Bank shows that the approval is granted ex-post facto when Section 35B(1)(b) postulates prior permission. The Reserve Bank will have to justify its actions, and therefore, the Writ Petition is maintainable, Nankani pleaded.The Reserve Bank joined the ICICI in raising the issue of maintainability and Venkatesh Dhond submitted that while approving termination of a Managing Director, the Reserve Bank of India does not enter into employer-employee dispute. He further stated that Section 35B(1)(b) of the Act is a regulatory provision only to oversee that the action of the bank does not have an adverse impact on the depositors or the banking system. JudgementAfter examining all submissions put forth by the three parties involved, Court observed-"Writs can be issued to the State; an authority; a statutory body; an instrumentality or agency of...

Petitioner's Service Conditions Not Governed By Any Statute; Bombay HC Dismisses Chanda Kochhaar's Challenge To Termination From ICICI [Read Judgment]

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Petitioner's Service Conditions Not Governed By Any Statute; Bombay HC Dismisses Chanda Kochhaar's Challenge To Termination From ICICI [Read Judgment]

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