Bombay HC asks RBI to file reply on Chanda Kochhar’s termination from ICICI
The ICICI Bank informed the court that the order was passed belatedly as it was awaiting the justice (retd) Srikrishna report.Updated: Dec 09, 2019 15:06 IST
The Bombay high court on Monday directed the Reserve Bank of India (RBI) to file a reply on the claim made by former ICICI Bank managing director and chief executive officer Chanda Kochhar that her termination under section 35 (b) of the Banking Regulation Act, 1949 was not done according to the due procedure. Kochhar, in her petition, has said that she was sacked by the bank on January 30, 2019, while the central bank’s sanction was secured on March 13, 2019.
The ICICI Bank informed the division bench of justices Ranjit More and Surendra Tavade that the order was passed belatedly as it was awaiting the justice (retd) Srikrishna report, which was tasked with investigating quid pro quo dealings by Kochhar.
Senior counsel Darius Khambata, appearing for ICICI Bank, said through an affidavit that there was no violation of any statutory provision.
The affidavit further referred to the inquiry report and pointed out that Kochhar had not fulfilled her contractual duties while serving the bank and she had failed to disclose her personal interests through her husband who was a director of Quality Techno Advisors Private Limited, the firm being probed for illegal transactions along with the Videocon Group. This the affidavit said was against the Code of Conduct and applicable laws, rules and regulations.
Khambata submitted that in light of these disclosures by the report, the bank had decided to terminate her services, hence the petition was not maintainable.
However, Kochhar’s lawyers senior advocate Vikram Nankani and advocate Dr Sujay Kantawala pointed to the fact that as per section 35 (b), “previous” sanction of RBI was required to terminate the services of Kochhar. They contended that even after receiving the bank’s letter seeking approval to terminate the services of Kochhar, RBI failed to observe that the additional time was being sought post facto, following the adage “garbage in, garbage out “ and issued the approval on March 13.
After hearing the submissions the bench directed the RBI to file a reply and posted the matter for hearing on December 18.