HC dismisses Chanda Kochhar’s plea against termination of employment

The court accepted the contention that her petition was not maintainable as the dispute was contractual

Chanda Kochhar
Kochhar was terminated from the ICICI Bank months after she voluntarily left the second largest private sector lender | PTI File

The Bombay High Court on Thursday (March 5) 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.

A division bench of Justices NM 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.

“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.

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.

Related news: ICICI Bank seeks recovery of amounts from Chanda Kochhar

“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.

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.

Related news: ED attaches ₹78-crore worth assets of Chanda Kochhar

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.

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