MC Explains | Why Bombay High Court validated Chanda Kochhar’s termination by ICICI Bank

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26 Aug, 2025 12:21

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On November 10, the Bombay High Court said the termination of Chanda Kochhar from the post of CEO of ICICI Bank was prima facie “valid termination” and dismissed her interim application seeking post-retirement benefits.

A single bench of Justice RI Chagla also directed Kochhar to not deal with the bank's 6.90 lakh shares she had acquired in 2018. She was also told to disclose in an affidavit all dealings with respect to the shares within six weeks.

ICICI Bank initially accepted Kochhar’s early retirement but later terminated her services with retrospective effect after an internal inquiry. The order is seen as a victory for ICICI Bank in the legal battle against the former CEO.

What is the case about?

In May 2018, the bank initiated an inquiry against Kochhar following a complaint about her alleged role in granting out-of-turn loans worth Rs 3,250 crore to the Videocon Group, which benefited her husband Deepak Kochhar.

Kochhar went on leave thereafter and later applied for early retirement, which was accepted.

The bank then said it had treated her separation as "Termination for Cause" and had also sought approval from the Reserve Bank of India (RBI) for Kochchar's termination of appointment as is mandatory under the provisions of the RBI Act.

Kochhar’s arguments

In her application, Kochhar sought specific performance of the entitlements and benefits that were unconditionally provided to her when the bank accepted her early retirement in 2018.

The bank could not have terminated a person who had already retired, the application said. The benefits granted to her, unconditionally, included employee stock options that were exercisable till 2028.

But the court wasn’t convinced by Kochhar’s arguments. Besides, Kochhar contended that the Justice Srikrishna inquiry was a preliminary probe and could not result in disciplinary action.

The court said didn't find merit in that argument. “I further find no fault in the inquiry headed by Justice Srikrishna (retired), which is with the view to ensure a fair and independent process, particularly with regard to the allegations of misconduct made against the MD and CEO of the ICICI Bank,” the court said.

ICICI Bank accepted the early retirement of Kochhar as it didn’t have complete knowledge of the facts, including non-disclosure by Kochhar on various issues.

Non-disclosures cited

The court, citing the report submitted by Justice Srikrishna, said there was non-disclosure by Kochhar regarding certain directorships of her husband Deepak Kochhar in companies where Videocon Group was either a substantial shareholder or which were part of the group.

The court also said Kochhar sat on various committees of ICICI Bank which sanctioned loans to Videocon Group and the Essar Group, with which Deepak Kochhar had direct or indirect business dealings, without disclosing the actual or potential conflicts of interest.

“Prima facie, I find that the revocation of the early retirement acceptance is valid and do not find, given the facts in the present case, any merit in the contention on behalf of Kochhar that once there is cessation of employer and employee relationship, the acceptance of early retirement cannot be revoked,” Justice Chagla said.

Fall from grace

At one point, Kochhar was everything a young banker in India could hope to become—sharp in her comments, inimitable in management style and impressive in public engagement.

Kochhar joined ICICI in 1984 as a management trainee when the bank was still a non-banking financial company (NBFC) called the Industrial Credit and Investment Corporation of India, which later became ICICI Bank.

Over the years, Kochhar’s growth in ICICI Bank was steady and a model for any aspiring banker. She rose through the ranks and played an instrumental role in building the entity into one of the biggest banks in the country, particularly its retail portfolio. But, after nearly three and a half decades in ICICI, Kochhar exited with her professional image tainted.