The Bombay High Court on Thursday dismissed the writ petition filed by the ex-Managing Director and the Chief executive officer of the ICICI bank challenging her termination from service and the communication effected by RBI under Regulation 35B(1)(b).
Mrs. Chanda Kochhar joined the ICICI bank as a management trainee in the year 1984. In the year 2009 she was appointed as Managing director and the chief executive officer until the year 2014. She was reappointed as the CEO and managing director until the year 2019. The approval of these appointments was duly communicated to the RBI. In the meeting conducted by the ICICI in the year 2018, it received complaints against the petitioner which was enquired by the retired Supreme Court judge during June, 2018. On 3rd October, 2018, the petitioner sent a letter to ICICI seeking early retirement which was accepted by the said bank subject to certain terms and conditions through a letter dated 4th October, 2018.
The enquiry report was submitted by the retired Supreme Court judge and the findings of the same were adverse to the petitioner herein. Hence the bank in a meeting held in the month of January, 2019, treated the petitioner’s separation as ‘termination for cause’ and the same was communicated to the petitioner through a letter dated 1st February, 2019. Further the bank had revoked all her retirement benefits.
On 20th November, 2019, the petitioner herein filed the present writ petition challenging the termination order. However the ICICI bank challenged the maintainability of the petition and further relied its arguments on the termination letter sent to the petitioner and the approval letter sent by the RBI approving the termination of the petitioner. Subsequently the petitioner sought to amend the petition to include a prayer challenging the approval letter of the RBI and the division bench allowed the same.
The ICICI bank and the RBI raised the maintainability of the petition as preliminary objection. The ICICI bank contended that the writ petition is not maintainable as the bank is neither an authority under Article 12 nor it discharges a public duty. Also, the bank is a private body and hence the petitioner is not governed by any statute. Further it stated that the relationship of the petitioner with that of the bank is purely contractual. The bank also stated that the petitioner challenged the communication of RBI in order to create the maintainability of the petition and does not have any other bona fide reasons
However the petitioner defended stating that the petitioner is governed by the Banking regulations more particularly under 35B(1)(b) and the approval of RBI with respect to her termination has a direct effect on the petitioner and hence the writ petition is maintainable. The RBI defended by raising its objection stating that the bank does not enter into any employer-employee relationship. It grants its approval under regulation 35B(1)(b) only by overseeing that the decisions of the bank does not have adverse impact on the depositors.
After hearing both the parties and examining the materials placed on record, the court observed as follows:
1. ICICI is a private bank. It is not established under any statutory act and does not receive funds from the government.
2. ICICI has its own code of Business conduct and ethics which governs its employees. The appointment of the petitioner was also under the resolutions passed by the board. The remuneration and other benefits of the petitioner were also fixed by the board.
3. The relationship between the petitioner and the ICICI bank is governed by the terms of contract and resolutions of the board.
4. The courts do not exercise its jurisdiction in disputes where the employment is regulated by the contracts.
5. The Reserve Bank of India does not have powers to grant approvals. It merely regulates the commercial banking and issues directions with regard to its activities and policies relating to banking. The opinion of the reserve bank is only with respect to the impact of the termination on the banking system.
The petition was listed before the division bench of Supreme Court comprising of Justice M.S.Karnik and Justice Nitin Jamdar. The bench dismissed the writ petition filed by Chanda Kochhar holding that the private organization is not amenable to the writ jurisdiction.
Edited by J. Madonna Jephi
Approved & Published – Sakshi Raje
- Writ petition no. 3315 of 2019, Supreme Court of India, Order dated 5th March, 2020.