The Bombay High Court on Monday allowed former MD and CEO of ICICI Bank Chanda Kochhar to amend her plea, challenging the bank’s decision to terminate her from services last year and make the Reserve Bank of India (RBI) a party to it. The matter will be heard on December 9.
A division bench was hearing a petition filed by Ms. Kochhar on November 20, 2019 challenging her termination by the ICICI Bank and denying her the agreed remuneration as the MD and CEO without previous approval of the RBI. She alleged the termination, that too after the board of directors of the bank having accepted her request for early retirement, constituted breach of statutory obligation under the Banking Regulation Act, 1949.
According to the plea, “On October 3, 2018, Ms. Kochhar requested ICICI Bank’s board of directors to grant her early retirement and the next day, they approved it with immediate effect and set out the benefits of early retirement scheme.”
Thereafter, on January 30, 2019, Ms. Kochhar received an e-mail from the bank which said following the enquiry report from Justice (retd.) Srikrishna, the board has decided to treat her separation from the bank as ‘termination for cause’ and clawback all bonus paid from April 2009 until March 2018.
It also said the previous e-mail, explaining her early retirement benefits, stood revoked with immediate effect.
She said she was aggrieved that no previous approval from the RBI was obtained to treat the communication by the bank as “termination for cause.” She urged the court to term the communication dated October 4, 2018 as valid and binding and that on January 30 as illegal and not binding.
The bank filed an affidavit on November 30, 2019 contending the reliefs sought in the petition were not maintainable and deserve to be dismissed because the lender was a private bank administered under the Companies Act and not the State or its agency.
The affidavit said, “ICICI Bank wrote a letter to the RBI on February 5, 2019 which replied on March 13, 2019 approving Ms. Kochhar’s termination from service with effect from October 4, 2018.”
On Monday, senior counsel Darius Khambata, appearing for the bank, said the petition was not maintainable and any termination can be done with the approval of the bank’s board.
Senior counsel Vikram Nankani and advocate Sujay Kantawala, representing Ms. Kochhar, however said the bank also needed approval from the RBI before issuing a termination letter.
He then urged the court to grant him permission to amend the petition and make RBI a party to the plea.
