The Bombay High Court on Tuesday allowed an application filed by private lender ICICI Bank and directed its former chief executive Chanda Kochhar to approach a proper judicial forum to try the case.
The court held that a suit filed by Kochhar in connection with her entitlements and benefits is not a commercial suit and, hence, she needs to file a regular civil suit.
Justice NJ Jamdar, in an oral order, clarified that the nature of the dispute between Kochhar and her former employer is not a commercial suit and, hence, it cannot be heard by the commercial court.
A copy of the written order is awaited. The court was hearing an intervention application filed by the ICICI Bank, challenging a suit filed by Kochhar in a commercial court. The bank had sought judicial intervention to direct her to approach the appropriate judicial forum to try the case.
Senior Advocate Darius Khambata, along with law firm Veritas Legal, appeared for the lender and argued that Kochhar had wrongly filed the suit under the Commercial Court Act 2015.
“The suit is filed in relation to a dispute, which does not fall under the definition of a ‘commercial dispute’... the commercial division of this court has no jurisdiction to entertain, try and/or dispose of the present suit,” its petition said.
In January, Kochhar moved to the court against the ICICI Bank, seeking specific performance commitments and contractual obligations promised to her after her early retirement in October 2018.
Kochhar in her petition had submitted that the bank reneged on its contractual commitments and cannot terminate a person who had already retired. As per people in the know, the stock options due to Kochhar could run into more than Rs 1,000 crore at current market value
Subsequently, the lender had filed an intervention application in this suit and argued that “Under Section 7 of Commercial Court Act 2015, the commercial court has jurisdiction only to entertain suits and applications relating to ‘commercial disputes’ of specific value.”
Earlier on April 5, Justice NJ Jamdar reserved his order in the plea.
After receiving a whistle-blower complaint making allegations against Kochhar, the ICICI Bank board had decided to institute a private enquiryaround May 2018. After that, Kochhar proceeded on leave. In October, the bank accepted her request for early retirement and agreed to provide certain benefits.
In January 2019, ICICI Bank’s internal inquiry allegedly found that Kochhar had violated disclosure norms on conflict of interest and that her October 2018 exit would not be treated as a normal resignation but as a dismissal. At the time of the development, the bank had said it would also seek to claw back bonuses handed out during her tenure as CEO, and she was to lose all dues and stock options for which she otherwise would have been eligible.
Subsequently, she challenged her termination in December 2019 before the Bombay High Court. But the court dismissed the same suit in March 2020. The Supreme Court also upheld the High Court’s ruling in December 2020. In January 2022, Kochhar filed a fresh suit in the Bombay High Court, challenging the claw-back of her retiral benefits
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