The Bombay High Court on Thursday dismissed the writ petition filed by erstwhile managing director and chief executive officer Chanda Kochhar of ICICI Bank against the private lender.

The court accepted the arguments of the private lender that Kochhar’s writ petition was not maintainable as it is a private banking company and the petition seek to contest purely private contractual terms. The bank had argued that Kochhar’s petition did not have legal basis.

Moreover, the bank had said none of the reliefs sought by Kochhar — declare termination illegal, refrain from recovering and cancelling early retirement benefits and remuneration, permit the exercise of stock options — sought compliance with any statutory provisions whatsoever. The lender also claimed that the reliefs Kochhar sought were of a purely private character and sought to secure performance of contractual obligations allegedly owed by an employer to an employee.

Kochhar was contesting that ICICI Bank should have secured the Reserve Bank of India (RBI)'s permission first before terminating her services. She also challenged RBI’s approval in terminating her services, arguing that the move was illegal and had no legal base. The central bank on March 13 gave its consent to the bank management to terminate Kochhar after it fired her on January 31, 2019.

“The RBI issued the alleged approval without due and proper application of mind and in colourable exercise of powers, by mechanically accepting the mala fide request of the respondent bank (ICICI) without disclosing contents thereof to the petitioner (Kochhar) and contrary to the provisions of Section 35B (1)(b) of the Banking Regulations Act,” Kochhar said in her petition.

The Banking Regulation Act says that the prior approval of the RBI is required to terminate the contract of a bank’s chairman or managing director.

“The requirement of prior approval is mandatory and cannot be granted post facto and the non-fulfilment thereof is incurable and an afterthought,” Kochhar’s petition read.

The bank in its reply had said that Section 35B of the Banking Regulation Act, 1949, under which Kochhar was seeking nullification of her termination of her services, is a “regulatory provision”.

The bank had further argued that Kochhar was aware that Section 35B is a part of RBI’s regulatory and supervisory powers and the Section does not confer on her any right or protection. Also, the Section does not cast a duty on the bank, but is just a form of regulatory oversight by the RBI for the protection of the banking company and its depositors.

The bank had also said, “The said Section does not govern or regulate the petitioner’s (Kochhar’s) contract of services with the respondent (ICICI Bank)”. Therefore, the petitioner has no locus standi to make a claim in respect of the alleged violation of the said Section.

The division bench of the high court was presided over by N M Jamdar and M S Karnik.