The High Court of Bombay has dismissed the petition filed by Chanda Kochhar, ex-CEO and Managing Director of ICICI Bank, challenging her termination. Kochhar’s termination had come about pursuant to the findings of Justice Srikrishna Committee, which was set up by the bank to enquire into the allegations that the bank, under her leadership, had granted loans to Videocon (which later turned bad), around the same time that Videocon made an investment, through a web of transactions, in a company promoted by Kochhar’s husband, Deepak Kochhar.
It is interesting to note that Kochhar had originally stepped down voluntarily (ostensibly, as a temporary move) in the wake of the allegations, but her severance was later treated as 'termination for cause'. This move by ICICI Bank was followed by it filing a recovery suit against its former official to claw back the amounts already paid as bonus. It was done in exercise of its rights under an agreement executed between the bank and Kochhar on 8th December 2016, which contained integrity clauses.
In the order passed on 5th March 2020, the Bombay HC has observed that ICICI Bank was a private entity and not an instrumentality of the State, and that Kochhar’s employment was not governed by any statute. Notably, ICICI Bank’s move to terminate Kochhar had been approved by the Reserve Bank of India, as required under Section 35B(1)(b) of the Banking Regulation Act, 1949.