Chanda Kochhar Failed To Disclose Conflict Of Interest With Videocon, ICICI Tells Bombay HC; Court Asks RBI To File Reply

The Bombay High Court on Monday asked the Reserve Bank of India to file an affidavit-in-reply in former ICICI bank CEO and MD Chanda Kochhar's plea challenging ICICI's decision to terminate her.

Division bench of Justice Ranjit More and Justice SP Tavade heard Kochhar's writ petition which contends that the bank could not have terminated Kochhar retroactively in 2019 when her retirement was approved in October 2018.

ICICI bank's counsel Senior Advocate Darius Khambatta argued that the said petition was not maintainable as the High Court could not exercise its jurisdiction under Article 226 of the Constitution to issue a writ of mandamus as Kochhar was not a public servant performing a public function.

Khambatta then read from an additional affidavit filed on behalf of the bank, which states-

"The writ petition is merely a part of a concerted stratagem adopted by the petitioner, who was a key management personnel and was subjected to various contractual terms including clawback provisions in accordance with RBI guidelines, to avoid making payments to the respondent under such clawback provisions."

Contrary to contentions raised by Kochhar's lawyer Senior Advocate Vikram Nankani, Khambatta submitted that RBI had complied with Section 35B of the Banking Regulation Act and approved Kochhar's termination on March 13, 2019.

Although, Kochhar's husband was a Director at Quality Techno Advisors Pvt Ltd and several entities controlled by him were in business with ICICI bank, she failed to disclose the same in violation of the code of conduct. The affidavit states-

"To the contrary, petitioner attended various meetings of the said respondent's credit committee and participated in the sanction of loans to the entities of Videocon Group without disclosing her conflict of interest."

On the other hand, Nankani submitted that ICICI bank knew that they needed RBI's approval before terminating Kochhar that is why after approving her early retirement in October 2018 they withdrew the same on January 30, 2019 and wrote to RBI five days later on February 5, 2019.

Court asked RBI to file a reply in the matter by December 16 and the next date of hearing is December 18.