HC dismisses Kochhar’s plea against termination of employment.

Bombay High Court has dismissed the petition filed by former ICICI bank chief Chanda Kochhar against her employer for terminating her. Chanda Kochhar was Managing Director of the ICICI Bank and was terminated from the service last year. The Reserve Bank India (RBI) had communicated its approval on the termination.

Chanda Kochhar had challenged the termination order as well as the communication issued by the Reserve Bank of India.

Also Read- CIVIL SUIT FOR TERMINATION OF SERVICES INDIA

FACTS:

  1. The Bombay High Court on Thursday dismissed a petition filed by Chanda Kochhar against her termination as managing director and CEO of the ICICI Bank, noting the dispute arises from a contract of personal service.
  2. According to the ICICI Bank, complaints were received against Kochhar and so in its meeting held on May 29, 2018, the bank constituted an enquiry by a retired judge of the Supreme Court. In June 2018, Kochhar informed ICICI that she would go on leave till the inquiry is completed. Also by a letter dated October 3, 2018, Kochhar sought early retirement. ICICI accepted her request for early retirement, subject to certain conditions.
  3. On January 27, 2019, the report of the inquiry was submitted. The findings given in the report were against Kochhar. And thus, in the meeting held on January 30, 2019, the board of the ICICI treated the separation of Kochhar’s service as a Termination for Cause. Further on February 1, 2019, ICICI revoked Kochhar’s retirement benefits.
  4. Advocates Darius Khambata Mustafa Doctor for ICICI and advocate Venkatesh Dhond for the RBI objected to the very maintainability of the petition filed by Kochhar.
  5. A division bench of Justices N M Jamdar and M S Karnik accepted the bank’s contention that Kochhar’s petition was not maintainable as the dispute was contractual and concerns a private body.
  6. “The termination of the petitioner is in the realm of contractual relationship,” the court said in its order. Courts cannot exercise their writ jurisdiction when employment in a private entity is regulated by contracts, it further said. “Contractual duties are enforceable as matters of private law by ordinary contractual remedies such as damages, injunction, specific performance and declaration,” the high court said.

Also Read- Illegal Termination Challenged in High Court Chandigarh

ORDER:

The bench in its order noted that even if an institution is performing a public duty and is amenable to writ jurisdiction, all its decisions would not be subject to judicial review.

“If the private body is discharging a public function and the denial of any right is in connection with the public duty imposed on such body, the public law remedy can be enforced,” the court said.

Also Read- Claim your Gratuity from Consumer Court

It took note of the fact that ICICI was a private bank governed by a board of directors and did not receive any funds from the government. The ICICI Bank’s counsel Darius Khambata earlier argued that a judicial review cannot be incurred under Article 226 of the Constitution, which empowers high courts to issue directions, orders or writs in such a matter. The bank sought dismissal of Kochhar’s petition. Kochhar was terminated from the ICICI Bank months after she voluntarily left the second largest private sector lender.The high-profile former banker moved the high court on November 30, 2019, challenging “termination” of her employment by the ICICI Bank. She contended 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 worth Rs 3,250 crore to the Videocon Group which benefitted her husband Deepak Kochhar. Kochhar’s counsel Vikram Nankani earlier argued 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 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.Khambata argued that ICICI was a private banking company and Kochhar’s petition seeks to contest what are purely private contractual terms.

Also Read- Termination of Teacher’s Service Challenged in CAT Tribunal

For case specific advice, one may contact best top expert Service Lawyer of High Court Chandigarh (Punjab Haryana).

More on 99888-17966.

Advertisements