Appellate Tribunal for Forfeited Property: In an appeal filed by Enforcement Directorate (‘ED’) challenging the Adjudicating Authority’s order dated 6-11-2020, wherein the authority refused to confirm attachment of a flat in Churchgate, Mumbai (‘the Flat’) and cash of Rs.10.5 Lakhs, the Bench of Munishwar Nath Bhandari, J. (Chairman) and Balesh Kumar (Member) found a clear chain of events indicating money laundering, including a Rs 64 crore transfer from Videocon to NRPL, a company controlled by Chanda Kochar’s husband. The long-standing association and financial interlinking between Chanda Kochhar’s husband and Videocon justified the attachment of property purchased with diverted funds.
Thus, setting aside the Adjudicating Authority’s order, except for the attachment of Rs 10.5 lakhs, which was not confirmed, the Tribunal upheld all other parts of the Provisional Attachment Order dated 10-1-2020.
Background
On 22-1-2019, an FIR was registered by the CBI for an offence under Sections 120-B and 420 of Penal Code, 1860 (‘IPC’) and Sections 7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. It was alleged Chanda Kochhar (MD and CEO), was involved in a criminal conspiracy to sanction Rs 1,730 crore in loans to the Videocon Group in violation of bank policies.
During June-2009 to October-2011, ICICI Bank had sanctioned 6 high value loans to various Videocon Group of Companies. In 2009, a loan of Rs. 300 crores were sanctioned to Videocon International Electronics Ltd. (‘VIEL’), in contravention of the rules and policy by a committee which included Chanda Kochhar. The next day on which the loan was disbursed, Rs 64 crore was transferred by V.N. Dhoot, founder of Videocon to NRPL, a company controlled by Kochhar’s husband. It was alleged that after Chanda Kochhar became MD and CEO of ICICI Bank on 1-5-2009, the aforesaid loans to the Videocon Group were sanctioned. The allegations included conflict of interest, as she chaired or was a member of committees that sanctioned loan of Rs. 300 crores to VIEL and Rs. 750 Crores to Videocon Industries Ltd (‘VIL’). The conflict of interest was due to the interest of her husband Deepak Kochhar in VIL and its entities, which she did not disclosed.
It was stated that Rs 1,730 crore loan to the Videocon Group was to be repaid in 20 quarterly instalments, but no repayment was made. The matter was reviewed by ICICI’s Board which found Chanda Kochhar guilty of multiple violations, including breach of fiduciary duty, conflict of interest, and misconduct. An internal enquiry led by Justice (Retd.) B.N. Srikrishna, concluded that she violated RBI, SEBI, and ICICI’s own policies, warranting her termination.
The investigations revealed that her husband, Deepak Kochhar, was the Managing Director of NRPL and controlled its affairs, the company that indirectly received, diverted loan funds. Consequently, the ED attached the Flat, which was the property of NRP and cash of Rs.10.5 Lakhs. However, the Adjudicating Authority refused to confirm the attachment, prompting the ED to file this appeal.
Analysis and Decision
The Tribunal stated that the value of the Flat was much more than a consideration of Rs. 11 lakhs, and it had rightly been taken to be nothing but the proceeds of crime. The Tribunal opined that as it was acquired through a crime linked to sanctioning of loan worth Rs 750 and Rs 1730 crores by ICICI Bank where Chanda Kochhar, despite a conflict of interest, participated in and approved the loans urgently, constituting fraud under Section 420 IPC.
The Tribunal noted that the loan to Videocon Group was sanctioned under an “urgent” proposal without explanation, and Chanda Kochhar failed to disclose her conflict of interest. After disbursement of Rs 300 crores, Rs 64 crores was routed to NRPL. This diversion violated loan terms and benefited Deepak Kochhar’s entity, justifying the attachment of NRPL’s assets as proceeds of crime.
The Tribunal took note of the respondents’ contention, which referred to Section 5(1) of the Prevention of Money Laundering Act, 2002 (‘PMLA’) to indicate that there was no exceptional reason to attach the property when it was already under mortgage and opined that since Deepak Kochhar had significant interest in NRPL, the attachment was justified under the second proviso of Section 5(1) PMLA to prevent possible alienation. Their strong opposition to the attachment indicated intent to frustrate proceedings, thus validating the provisional attachment.
The respondents argued that Chanda Kochhar wasn’t solely responsible for sanctioning the loan and that Deepak Kochhar didn’t own NRPL. However, the Tribunal found a clear chain of events indicating money laundering, including a Rs 64 crore transfer from Videocon to NRPL, which was under Deepak Kochhar’s control as per V.N. Dhoot’s statement. The long-standing association and financial interlinking between Deepak Kochhar and Videocon justified the attachment of property purchased with diverted funds, and the Adjudicating Authority’s contrary findings were deemed perverse.
Thus, setting aside the Adjudicating Authority’s order, except for the attachment of Rs 10.5 lakhs, which was not confirmed, the Tribunal upheld all other parts of the Provisional Attachment Order dated 10-1-2020.
[Enforcement Directorate v. Chanda Kochhar, FPA-PMLA-3802/DLI/2020 decided on 3-7-2025]
Advocates who appeared in this case :
For the Appellant: Zoheb Hossain (Spl. Counsel), N.K. Matta (SPP), Vivek Gurnani, Kanishk Maurya, Aaditya Raj Sharma, Faizan Khan, Advocates and Mr. Rakesh Bansal (EO, ED)
For the Respondents: Vikram Chaudhri (Sr. Advocate) Arveen Sekhon, Muskaan Khurana, Advocates
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