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HomeNewsBombay High Court dismisses Chanda Kochhar's plea against ICICI Bank

Bombay High Court dismisses Chanda Kochhar’s plea against ICICI Bank

The Bombay High Court on Thursday dismissed Chanda Kochhar‘s application seeking contractual obligations allegedly promised prior to her early retirement as ICICI Bank CEO in October 2018. The High Court also ruled that Kochhar’s retrospective termination by ICICI Bank is prima facie ‘valid’. The court also allowed an application filed by ICICI Bank that has restrained its former chief executive Kochhar from dealing in 690,000 shares of the lender that she had acquired through stock options between October and December 2018.

“The acceptance of early retirement by ICICI Bank was on account of its not having complete knowledge of the facts…which were only learnt of upon receipt of the enquiry report…in my prima facie view, ICICI Bank was justified in revoking acceptance of early retirement vide communication dated January 30, 2019,” observed justice RI Chagla in the 60-page order. “I do not find any merit in the submission that the enquiry was a preliminary enquiry headed by justice Srikrishna (retired) and that such preliminary enquiry could not result in disciplinary procedure or action taken against Mrs Kochhar,” said the order.

The court also asked her to submit details about all her assets within six weeks. The court was hearing an application filed by Chanda Kochhar against her ex-employer ICICI Bank seeking specific performance commitments and contractual obligations promised to her post her early retirement in October 2018.

The genesis of the dispute lies in whistle-blower’s allegations against Kochhar and business dealings between members of her family and the Videocon Group. The ICICI Bank board decided to institute a private enquiry around May 2018, post which Kochhar proceeded on leave. In October 2018, the bank accepted her request for early retirement and agreed to provide certain benefits. In January 2019, ICICI Bank’s internal inquiry allegedly found that Kochhar had violated disclosure norms on conflict of interest and that her October 2018 exit would not be treated as normal resignation but as a dismissal. At the time of the development, the bank had said that it would also seek to claw back bonuses handed out during her tenure as CEO, and she was to lose all dues and stock options for which she otherwise would have been eligible.

Now, in a relief to the bank, the court has held the lender’s action to terminate her with retrospective effect valid and has restrained Kochhar from dealing with those 690,000 shares until further order. In this case, senior advocates, Darius Khambata and Dr Birendra Saraf along with law firm Veritas Legal are appearing for ICICI Bank. While Chanda Kochhar is being represented by senior counsel Aspi Chinoy and Rohan Dakshini of Rashmikant and Partners. Kochhar in her petition had submitted that the bank reneged on its contractual commitments and cannot terminate a person who had already retired.

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