Today(6th September), The Supreme Court issued a notice on a petition challenging the Bombay High Court’s ruling that deemed the CBI’s arrest of Chanda Kochhar and her husband Deepak Kochhar unlawful. The arrests were related to the Videocon loan case.
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NEW DELHI: Today(6th September), The Supreme Court of India, took a step by issuing a notice on a petition challenging a Bombay High Court order that declared the Central Bureau of Investigation’s (CBI) arrest of Chanda Kochhar, former Managing Director and CEO of ICICI Bank, along with her husband Deepak Kochhar, as unlawful. The arrests were made in connection with the highly publicized Videocon loan case.
A bench comprising Justices Sanjiv Khanna and PV Sanjay Kumar delivered the order after hearing the initial arguments from Additional Solicitor General SV Raju, who represented the CBI in the proceedings. The appeal by the CBI was initiated against the Bombay High Court’s February 2023 ruling, which upheld the interim bail previously granted to the Kochhars and criticized the agency’s arrest procedures.
The Controversial Arrest and Loan Fraud Allegations
Chanda Kochhar and her husband were arrested in December 2022 by the CBI under charges of alleged misconduct and financial irregularities in the sanctioning of a Rs.3,250 crore loan to the Videocon Group, dating back to 2012. The CBI accused Chanda Kochhar of misusing her position at ICICI Bank to approve the loan, which eventually turned into a non-performing asset (NPA) and contributed to what was labeled as a large-scale bank fraud.
The arrest triggered a series of legal debates, particularly after allegations surfaced that Chanda Kochhar’s husband, Deepak Kochhar, and her family members had profited from the financial dealings with Videocon. The central claim was that while she headed ICICI Bank, she facilitated the loan in a quid pro quo arrangement, which allegedly saw her husband’s company, Nu Renewable, benefit from investments made by Videocon.
According to the CBI’s investigation, the financial benefits received by her husband’s company were directly linked to the approval of the massive loan to Videocon.
“It was alleged that during Kochhar’s tenure as ICICI Bank’s CEO, she approved a loan for the Videocon Group. In return, her husband’s company, Nu Renewable, was purportedly invested in by Videocon.”
-said a legal representative aware of the case details.
CBI Arrests Declared Illegal by Bombay High Court
Following the couple’s arrest in December 2022, a special CBI court extended their judicial custody on December 29, 2022. However, in a turn of events, the Bombay High Court granted interim bail to Chanda and Deepak Kochhar on January 9, 2023, providing them temporary relief from their custody.
The High Court later, in February 2023, confirmed the interim bail and went a step further by labeling the CBI’s actions as unlawful. It deemed the arrest “illegal” and found that the investigative agency had violated the provisions outlined in the Code of Criminal Procedure (CrPC).
According to the CrPC’s Section 41A, authorities are required to issue a notice to the accused, asking them to appear before the concerned police officer. This provision aims to prevent unnecessary arrests when the accused can cooperate with the investigation without being detained.
“It found that the arrests violated Section 41A of the Code of Criminal Procedure (CrPC), which requires issuing a notice for appearance before the concerned police officer to avoid unnecessary arrests.”
-the court concluded.
ALSO READ: Bombay High Court Deems Arrest of Former ICICI Bank CEO Chanda Kochhar and Husband “Abuse of Power”
The ruling came as a major setback for the CBI, prompting them to challenge the High Court’s decision in the Supreme Court. Their petition argues that the Bombay High Court misinterpreted the legal provisions regarding arrests and that the agency followed due process in apprehending the Kochhars.
Supreme Court Notice on CBI’s Appeal
In response to the CBI’s appeal, the Supreme Court issued a notice, initiating a fresh review of the case. The apex court’s decision to hear the appeal is seen as a critical step in determining whether the Bombay High Court’s ruling on the legality of the arrest was justified. The case is now poised for a thorough legal examination at the highest judicial level.
Chanda Kochhar’s legal troubles have garnered widespread media attention due to the prominence of her position at ICICI Bank and the magnitude of the alleged financial misdealings. The Videocon loan case has long been under scrutiny, with various stakeholders watching closely to see how the judiciary will handle the legal complexities surrounding the arrest and investigation process.
The appeal hearing will likely focus on whether the CBI adhered to the appropriate legal procedures when arresting the Kochhars and if there was, indeed, a violation of Section 41A of the CrPC. The Supreme Court’s examination of these procedural matters will be crucial in setting a precedent for how such high-profile arrests should be conducted in the future.
Broader Implications for Corporate Governance
The case against Chanda Kochhar also raises larger questions about corporate governance, particularly concerning conflicts of interest and the role of bank executives in approving large loans. As a former leader of one of India’s top private sector banks, Kochhar’s fall from grace has fueled debates about the responsibilities of corporate heads in safeguarding against financial misconduct.
The Videocon loan case is seen as emblematic of the challenges India’s banking sector faces in maintaining transparency and accountability. The allegations against Kochhar have sparked discussions about the need for tighter regulatory oversight in the banking industry to prevent such instances of fraud.
“Her husband’s company, Nu Renewable, allegedly received an investment from Videocon. The loan eventually became a non-performing asset (NPA) and was labeled as bank fraud.”
-one financial expert observed, highlighting the broader ramifications of the case.