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Tuesday, Dec 10, 2019

Chanda Kochhar’s petition against ICICI Bank over her termination adjourned till Dec 9

The RBI on March 13, 2019 approved the termination of Kochhar’s service.

india Updated: Dec 02, 2019 14:20 IST
Kanchan Chaudhari
Kanchan Chaudhari
Hindustan Times, Mumbai
Chanda Kochhar also complained about denial by the bank of the agreed remuneration to her, although her plea for early retirement, with effect from October 4, 2018, was accepted by the board of directors of the ICICI Bank.
Chanda Kochhar also complained about denial by the bank of the agreed remuneration to her, although her plea for early retirement, with effect from October 4, 2018, was accepted by the board of directors of the ICICI Bank.(PTI FILE)
         

The hearing on former ICICI Bank MD & CEO Chanda Kochhar’s petition challenging termination of her services by the multinational private bank was adjourned till December 9 by the Bombay high court on Monday.

Senior advocate Vikram Nankani sought permission to amend the petition by incorporating challenge to post-facto approval granted by the Reserve Bank of India (RBI) to her termination when it came up hearing before a division bench of justice Ranjit More and justice Makarand Karnik.

The RBI on March 13, 2019 approved the termination of Kochhar’s service.

In her petition, filed through Sujay Kantawalla, Kochhar termed the termination of her services by the bank as ex-facie illegal, untenable and unsustainable in law on the ground that it was without previous approval of the RBI as Section 35B of the Banking Regulation Act, 1949 requires prior-approval of the RBI before terminating the services of a managing director of a bank.

She also complained about denial by the bank of the agreed remuneration to her, although her plea for early retirement, with effect from October 4, 2018, was accepted by the board of directors of the ICICI Bank.

According to her petition, Kochhar joined ICICI Bank as a management trainee in April 1984 and went on to become the MD and CEO of the private bank in May 2009. Her appointment as such continued from time to time and was last approved by the RBI till March 31, 2019.

Kochhar, before she could complete the term in October 2018, applied for early retirement and it was accepted by the ICICI Bank board.

On January 30, 2019, the group chief human resource officer of the bank informed Kochhar that after taking into consideration the enquiry report submitted by Justice (retired) Shrikrishna, the board of directors had decided to “treat her separation from the bank as termination for cause” under the bank’s internal policies, schemes and the code of conduct.

She was also informed that the acceptance of her plea for early retirement stood revoked with immediate effect and attendant consequence required that the entire amount of bonus, Rs. 7.42 crore, paid to her from April 2009 to March 2018 – her entire tenure as MD and CEO, was recovered from her.

Besides, the communication informed her that all the early retirement benefits extended to her by the bank were revoked with immediate effect.

The ICICI Bank responded by taking preliminary objection to the maintainability of the petition. It’s counsel, senior advocate DJ Khambata, pointed out that ICICI Bank is a private bank and not the ‘State’ or its agency or instrumentality and therefore a writ petition cannot be filed against it. Khambata also opposed the plea for amendment of the petition contending that Kochhar cannot be allowed to improve her case when the petition itself was not maintainable.

In this regard the affidavit filed by the bank added it was not owned or controlled by the State and was administered in accordance with the Companies Act, 2013 by its Board of Directors, and therefore a writ petition cannot lie against it.