Bombay High Court: In an appeal filed by Chanda Kochchar (appellant) challenging the impugned order and seeking reinstatement of her Employee Stock Options (“ESOPs”) under the Employee Stock Option Scheme (“ESOS”) and clawback of bonuses and revocation of retirement benefits, including vested and unvested ESOPs, a division bench of K R Shriram and Rajesh S Patil, JJ., refuses to interfere with the impugned order as the prayers sought in the appeals are a matter of trial.
The appellant was working with the ICICI bank (respondent) as Managing Director and Chief Executive Officer when in July 2016, a news article surfaced containing allegations against the appellant about loans granted to Videocon Group companies as a quid pro quo for investments by Mr. Venugopal Dhoot of Videocon Group or his affiliates in NuPower Renewables Pvt. Ltd. (‘NRPL’). NRPL is a company promoted by Mr. Deepak Kochhar, husband of the appellant. Justice B N Srikrishna Committee was formed to conduct an independent inquiry into the allegations against the appellant. While the inquiry was still pending, the appellant addressed a letter requesting the Board of Directors of the respondent to grant her early retirement.
In the light of the findings in the report on serious violations by the appellant, the Board unanimously resolved to treat the separation of the appellant from the respondent as “termination for cause” under the respondent’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, vested and unvested and unexercised stock options, and medical benefits and clawback all bonuses paid from April 2009 until March 2018 and to take further actions as warranted.
In November 2019, the appellant filed a writ petition against the respondent seeking relief with respect to the specific performance of the letter dated 04-10-2018 by which the respondent accepted the appellant’s early retirement and the benefits referred therein under the early retirement scheme. The appellant is, inter alia, seeking reinstatement of her Employee Stock Options (‘ESOPs’) under the Employee Stock Option Scheme (‘ESOS’).
The respondent filed a suit seeking clawback of bonuses and revocation of retirement benefits, including vested and unvested ESOPs. It is the respondent’s case that the services of the appellant were treated as “termination for cause” with effect from 4-10-2018 for breach of good conduct during her employment.
In November 2019, the appellant filed a writ petition against the respondent declaring that the communication dated 4-10-2018 issued by the respondent was valid, subsisting, and binding on the respondent and the email dated 30-01-2019 and the letter dated 01-02-2019 from the respondent was illegal, non-est, void ab initio, etc. The declaration was also sought to declare the communication dated 13-03-2019 issued by RBI as non-est, illegal, and void ab initio.
The Single Judge dismissed the interim application filed by the appellant and restrained the appellant from dealing with any of the 690,000 ESOPs already exercised by her and directed her to disclose if she has sold or dealt with any of such shares as well as disclose her gain from such a sale which shall be by way of affidavit of disclosure. This order stands impugned in the present appeal.
The Court noted that the reliefs sought by the appellant are final reliefs and grant of such reliefs would amount to decree the appellant’s suit at the interim stage. Any grant of the interim reliefs as sought by the appellant would cause irreparable injury and prejudice to the respondent, in as much as if the respondent were to succeed in its suit and the appellant was to lose in her suit, the respondent would then be required to seek recovery of the shares acquired by appellant and/or monetary equivalent of the same. Appellant is an individual and respondent is a Bank whose shares are listed in the stock exchange.
The Court further noted that the Trial Court has exercised its discretion reasonably and in a judicial manner. The observations made by the learned Single Judge on the conduct of appellant, though not conclusive, are very serious in nature. If the interim reliefs sought by appellant is granted, that would cause irreparable injury and prejudice to respondent. The balance of convenience is completely in favour of respondent, since it is a public listed company, and if appellant succeeds in her suit, respondent can at that stage be directed to purchase shares from the stock market or to pay an amount equal to their value to appellant.
The Court held that if the interim reliefs sought by the appellant are granted, that would cause irreparable injury and prejudice to the respondent.
[Chanda Kochchar v ICICI Bank Limited, Appeal (L) No. 38843 of 2022, decided on 03-05-2023]
Advocates who appeared in this case :
Mr. Aspi Chinoy, Senior Advocate a/w. Mr. Rohaan Cama, Mr. Rohan Dakshini, Mr. Vishesh Malviya, Ms. Deepa Shetty, Mr. Kyrus Modi and Mr. Pranav Narsaria i/b. Rashmikant and Partners for the Appellant;
Mr. Darius Khambata, Senior Advocate a/w. Mr. Mustafa Doctor, Senior Advocate, Mr. Aditya Mehta, Mr. Ali Antulay, Mr. Abhijit Joshi, Mr. Rahul Dwarkadas, Ms. Silpa Nair, Ms. Juhi Bahirwani and Ms. Sanaya Contractor i/b. Veritas Legal for the Respondent.
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