Case BriefsDistrict Court

Sessions Court, Greater Bombay: Abhijeet A. Nandgaonkar, Additional Sessions Judge, issued summons, being of the prima facie opinion that Chanda Kochhar, Former MD and CEO of ICICI Bank may have misused her official position in sanctioning loans to Videocon Group and got illegal gratification through her husband.

FACTUAL MATRIX

Accused 1 was the MD and CEO of ICICI Bank, whereas accused 2 is the husband of accused 1.

During June, 2019 to October, 2011 ICICI Bank sanctioned six high-value loans to various companies of Videocon Group in the tune of Rs 300 crores which was in contravention of the rules and policy of sanctioning committee. On the very next day of when the said amount of Rs 300 crores was disbursed, an amount of Rs 64 crores was transferred by the accused V.N. Dhoot to NRPL managed by accused Deepak Kochhar through his company SEPL.

Chanda Kochhar got illegal gratification/undue benefit through her husband.

ICICI Bank sanctioned various loans to Videocon Group of Companies. However, the said loans were turned NPA resulting in wrongful loss to ICICI Bank and wrongful gain to the borrowers and accused persons.

After Chanda Kochhar took over the charge of ICICI Bank as MD and CEO, all the credit facilities as stated above, sanctioned to Videocon group of companies.

The said loans were sanctioned by the different sanctioning committees and Chanda Kochhar was one of the Committee member which sanctioned RTL of Rs 300 crores to VIEL and Rs 750 crores to VIL.

Hence, total misappropriation/loss caused was of Rs 1,730.

Enforcement Directorate

After initiation of investigation, all the accused persons were arrested and it was found that Deepak Kochhar ( accused 2) had a close acquaintance and relationship with V.N. Dhoot, Chairman and Managing Director of Videocon Industries Ltd.

Accused 1 Chanda Kochhar had neither disclosed the above fact nor recused herself from sanctioning committee of ICICI bank while sanctioning loan to VIL or VIEL.

Day after the sanctioning of loan to VIEL Rs 64 crores was transferred to NRPL, owned and managed by accused Deepak Kochhar. The said was illegal gratification to accused Chanda Kochhar, through accused Deepak Kochhar by abusing her position as MD and CEO of ICICI Banking sanctioning the loan.

The said proceeds of crime Rs 64 crores transferred to NRPL through a web of companies was used to purchase properties.

Decision

Bench in view of the facts and circumstances of the case, opined that it appears that accused Chanda Kochhar misused her official position in granting the loan to accused V.N. Dhoot and/or Videocon Group Companies and got illegal gratification/undue advantage through her husband accused Deepak Kochhar, per se quid pro quo web-transactions, created by the accused persons through various companies for siphoning off money and proceeds of crime.

Hence, the above-stated constituted the commission of schedule offence, which gave rise to register the offence under Section 3 read with Section 70 punishable under Section 4 of the Prevention of Money Laundering Act.

Order

Process to be issued against the accused nos. 1 to 11, accused 2 who is in custody be served upon summons. ED granted leave to continue with the ongoing investigation and to take action as per law.[Directorate of Enforcement v. Chanda Kochhar, PMLA Special Case No. 915 of 2020, decided on 30-01-2021]


Image Credits [Chandra Kochhar]: Business Standard

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Sanjay Kishan Kaul, DInesh Maheshwari and Hrishikesh Roy, JJ has refused to interfere with the termination of Chanda Kochhar as the Managing Director and CEO of ICICI Bank. The bench said,

“We are not inclined to interfere with the impugned order for the reason that the only controversy in these proceedings is whether the resignation of the petitioner having earlier been accepted and thereafter her services been terminated, the latter could take place or not. This would fall within the realm of contractual relationship between the petitioner and the private bank.”

Chanda Kochhar, the Ex- Managing Director and CEO of ICICI Bank, was terminated from her service and same was approved by the Reserve Bank of India (RBI). ICICI, in its meeting held on 29 May 2018, constituted an enquiry by a retired Judge of the Supreme Court of India. In June 2018 the Petitioner informed ICICI that Petitioner would go on leave till the enquiry is completed. By letter dated 3 October 2018, the Petitioner sought early retirement. ICICI, by the communication dated 4 October 2018 accepted the request for early retirement subject to certain conditions. On 27 January 2019, the report of the enquiry was submitted. The report was adverse to the Petitioner. In the meeting held on 30 January 2019, the Board of the ICICI treated the separation of the Petitioner’s service as a Termination for Cause. A communication to that effect was issued to the Petitioner. By further communication dated 1 February 2019, ICICI revoked the retirement benefits of the Petitioner. Correspondence ensued between the parties. The Petitioner called upon the ICICI to restore to the Petitioner the existing and future entitlements, including unpaid amounts, stock options, medical benefits. ICICI refused the request.

On 05.03.2020, the Bombay High Court had, in Chanda Deepak Kochhar v. ICICI Bank Ltd., 2020 SCC OnLine Bom 374, refused to interfere with Kochhar’s termination and had said,

“… merely because the approval under Section 35B(1)(b) is questioned, that cannot infuse a public law element in this dispute, which remains a contractual dispute. For the contractual remedies, the Petitioner will have to approach the appropriate forum and not writ jurisdiction.”

[Chandra Deepak Kochhar v. ICICI Bank Ltd., 2020 SCC OnLine SC 969, order dated 01.12.2020]


For Petitioner: Senior Advocate Mukul Rohatgi

For Respondent: Senior Advocate  Darius Khambata

 

Case BriefsCOVID 19High Courts

Bombay High Court: G.S. Patel, J., while fashioning a workable solution limited to the facts the instant case, ordered that subject to the conditions as set out in the order, the period of the moratorium during which there is a lockdown will not be reckoned by ICICI Bank for the purposes of computation of the 90-day NPA declaration period.

Facts & issue

The High Court was hearing a writ petition wherein the petitioners sought the exclusion of the moratorium period for the computation of the 90-day period. Notably, in the wake of the COVID-19 pandemic and the consequent lockdown, the Reserve Bank of India (“RBI”) has directed that there will be a moratorium in regard to repayments and classifications as NPAs. This moratorium period, as appears prima facie from the RBI circulars, operates with effect from 1-3-2020 and, as currently advised, goes up to 31-3-2020.

The petitioners had finance facilities with ICICI Bank which were to be repaid in instalments. The petitioners defaulted in repayment schedule due on 15-1-2020 and 15-2-2020. Notably, as per RBI’s directions, if the payment is not made and the account is not regularised within 90 days of the date of default then the borrower’s account gets classified as an NPA. In the instant case, the 90-day period in respect of 15-1-2020 default would end on 15-4-2020 and that for 15-2-2020 will end on 15-5-2020. The question before the Court was:

Now that the moratorium has started running, should there be a suspension of this countdown timer for NPA-declaration and for reckoning the 90-day period?

Contentions

Dr Birendra Saraf, Senior Advocate appearing for the petitioners submitted that the moratorium period must be excluded even for the computation of any balance days of the NPA declaration 90-day period. Otherwise, the moratorium itself would be meaningless in situations such as those of the petitioners. Per contra, Viraag Tulzapurkar, Senior Advocate representing the respondent ICICI Bank said that a broad-based declaration or finding returned by a Court could have all manner of unintended consequences in respect of other borrowers and that the Court should be slow in extending any such relief by an ad-interim order that may be construed to apply across the board. He also raised question on maintainability of the instant writ petition but the High Court left the issue open for an appropriate stage.

Order

According to the High Court, the instant case required fashioning a workable order limited to the facts of this case ensuring that it sets no precedent for ICICI Bank in other cases and yet ensuring that the petitioners have enough latitude to be able to service their debt. Having regard to the facts of this case, and recognising the need to sufficiently protect the interests of both sides, the Court made the following order:

(a) Subject to the conditions set out below, the period of the moratorium during which there is a lockdown will not be reckoned by ICICI Bank for the purposes of computation of the 90-day NPA declaration period. As currently advised, therefore, the period of 1-3-2020 until 31-5-2020 during which there is a lockdown will stand excluded from the 90-day NPA declaration computation until — and this is the condition — the lockdown is lifted. Thus, irrespective of the continuance of the moratorium until 31-5-2020, if the lockdown is lifted at an earlier date than 31-5-2020, then this protection available to the petitioners will cease on the date of lifting of the lockdown, and the computing and reckoning of the remainder of the 90-day period will start from that earlier lifting of the lockdown-ending date.

(b) In that scenario, should the lockdown be lifted before 31-5-2020, the petitioners will have 15 days after the ending of the lockdown in which to regularise the payment under the first instalment due on 15-1-2020 and a further three weeks thereafter to regularise the payment under the second instalment due on 15-2-2020.

(c) If the lockdown extends beyond 31-5-2020, then these days will be deferred accordingly, irrespective of whether the moratorium itself is extended beyond 31-5-2020.

(d) The whole of the moratorium period is, evidently, excluded for all amounts that fall due during that moratorium period.

Clarifications

By way of abundant caution, the High Court made certain clarifications:

  1. This order is not a backward extension of the moratorium to January 2020. It is predicated on, and only on, the current lockdown period which makes normal functioning impossible. The relief to the petitioners is co-terminus with the lockdown period, not the declared end of the moratorium.
  2. This may result in additional days (less than 90) being allowed to be reckoned in the countdown or timer because the lockdown came into effect after 1-3-2020. But that is a consequence the petitioners must accept in regard to the prior defaults.
  3. As to whether the petitioners are entitled to the benefit of the entire moratorium period in respect of the prior defaults of January and February 2020, the rival contentions are expressly kept open.
  4. These directions consciously do not take into account any partial or staggered lifting of the lockdown, but only a complete lifting. The reason is self-evident. It may be well nigh impossible for any court ever to decide whether or not a ‘partial lifting’ of the lockdown enables the petitioners to resume their normal operations and, if so, to what extent. The exclusion from the 90-day NPA declaration timer and countdown can only therefore operate during the lockdown period, full or partial, and will end upon the complete lifting of the lockdown.
  5. ICICI Bank is not to be held accountable or liable for these extensions.
  6. This order will not serve as a precedent for any other case in regard to any other borrower who is in default or any other bank. Each of these cases will have to be assessed on their own merits.
  7. These are only prima facie and tentative views. Nothing in this order is to be construed as a final determination of any issues or competing rights. [Transcon Skycity (P) Ltd. v. ICICI Bank, 2020 SCC OnLine Bom 626 , dated 11-4-2020]
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Redressal Commission (NCDRC): Dinesh Singh (Presiding Member) while dismissing the revision petition filed by ICIC Bank Ltd. upheld the decision of District Forum and State Commission with regard to compensation and reconstruction of lost/misplaced original sales deed of the ‘Complainants’.

The pertinent facts of the case were that the complainants had taken a home loan from the Bank and deposited the original sale-deed of their flat with the Bank. Later, the bank informed the complainants that the originally registered sale deed of their flat was misplaced/lost by them.

On being aware of the above circumstances, complainants filed a complaint at the District Forum alleging ‘deficiency of service’ on the bank’s part.

District Forum allowed the Complaint and directed the OPs — to reconstruct the sale deed by registering a complaint in the Police Station concerned regarding eth original sale deed. The same should be published in a National Newspaper, Daily Newspaper of Rajasthan and Alwar and procure a certified copy of the sale deed and notify in the copy itself that the Original Document lost due to fault of the OPs. On preparing such documents, they should be handed over to the complainant and the copy of the same should be included in the records of the OPs, which will be equivalent to the original document.

Further, Bank filed an appeal under Section 15 of the Act before the State Commission, but was dismissed.

State Commission while dismissing the appeal stated that,

According to the settled principles of the National Commission, the non-returning of original documents depicts deficiency of services and is an unfair trade practice.

 Commission’s Decision

The Bench stated that the two forums had returned concurrent findings. No palpable or crucial error in appreciating the evidence by the two foras was visible.

In the given specificities and fact of the matter, the order made by the District Forum was just and equitable.

Commission also noted that, an original registered sale deed is an important document, its loss adversely affects the property. Even if the document is reconstructed, a question still obtains on the property, and continues in perpetuity.

Bank’s position cannot be appreciated.

“When, by its own admission, it lost/misplaced the original document of the Complainants, it should have, on its own, in the normal won’t of its functioning, got the document reconstructed, handed over the reconstructed document to the Complainants, with courtesy and apology, as also conducted an internal inquiry to fix responsibility as well as undertaken systemic improvements for future.”

Thus, the revision petition being patently ill-conceived and totally bereft of merit, was dismissed with stern advice of caution to the Bank and direction with regard to timely compliance of the order was given. [ICICI Bank Ltd. v. Rajesh Khandelwal, 2020 SCC OnLine NCDRC 12, decided on 12-02-2020]

Business NewsNews

As reported by media, the board of ICICI Bank had appointed Retired Supreme Court Judge, Justice Srikrishna to investigate in regard to the allegations placed against Kochhar. The investigation concluded with Justice Srikrishna finding Kocchar guilty of violating the lender’s code of conduct.

On 30-01-2019, the board of ICICI Bank released a statement stating that, “After due deliberations, the Board of Directors decided to treat the separation of Ms Chanda Kochhar from the Bank as a ‘Termination for Cause’ under the Bank’s internal policies, schemes and the Code of Conduct, with all attendant consequences (including revocation of all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested & unexercised stock options, and medical benefits), and require the clawback of all bonuses paid from April 2009 until March 2018, and to take such further actions as may be warranted in the matter.”

[Source: Indianexpress.com]