ICICI Bank case: SC rejects Chanda Kochhar’s plea against termination

The Supreme Court on Tuesday rejected Chanda Kochhar’s appeal against the Bombay High Court’s March 5 order which had dismissed her plea against her termination as the managing director and CEO of ICICI Bank, saying the issue falls within the realm of a private bank and employee.

The ruling is a major setback for Kochhar who now stands to lose her pension related benefits, including bonuses and stock options.

The Bench led by justice SK Kaul while dismissing Kochhar’s appeal upheld the Bombay HC order that held that her services were not governed by any statute, “but it is a purely contractual relationship with ICICI”.

“We are not inclined to interfere… This falls within the realm of private contract between bank and employee,” the apex court said.

“This rejection on the ground of ‘maintainability’ by the HC is wholly erroneous, arbitrary, and contrary to law well settled by the SC,” senior counsel Mukul Rohatgi argued, adding that “…they have converted my resignation to termination. Whether the termination can be done without approving the resignation is a question”.

Her termination came on January 30, 2019, almost four months after the bank approved her voluntary resignation on October 4, 2018, and therefore, the termination was “illegal”, Rohatgi said.

The Bombay High Court had accepted the bank’s contention that Kochhar’s plea was not maintainable as the dispute was contractual and concerns a private body.

Kochhar was terminated from the ICICI Bank months after she had voluntarily left the second largest private sector lender. She had moved the Bombay High Court on November 30, 2019, challenging the termination of her employment by the ICICI Bank. She had contended before the high court that the bank also denied her remuneration and clawed back all the bonuses and stock options between April 2009 and March 2018, for her alleged role in granting out of turn loans to the Videocon Group which purportedly benefitted her husband Deepak Kochhar. Her counsel had earlier argued in the high court that her termination came months after the bank approved her voluntary resignation on October 5, 2018, and therefore, the termination is “illegal, untenable and unsustainable in law”.

The ICICI Bank had then filed an affidavit, contending the reliefs in the petition are not maintainable and it deserves to be dismissed as ICICI is a private bank and is administered under the Companies Act, not the state or its agency.