ICICI-Videocon scam: Kochhars' arrest illegal, says Bombay HC; grants bail
What's the story
Former ICICI Bank CEO Chanda Kochhar and her husband Deepak Kochhar will be released from jail as the Bombay High Court granted them bail on Monday.
It also observed their arrest by the Central Bureau of Investigation (CBI) was illegal.
The CBI arrested them last month in connection with suspected irregularities in a Rs. 3,250 crore loan granted by ICICI Bank to Videocon Group.
Context
Why does this story matter?
The court's decision comes as a big relief for Kochhar, who is accused of illegally sanctioning loans for Videocon Group since she took charge as ICICI Bank's MD-CEO in 2009.
Videocon borrowed nearly Rs. 40,000cr from a consortium of 20 banks, including ICICI Bank.
The loans taken by Videocon turned into non-performing assets (NPAs) for the bank but allegedly benefited Kochhar and her family.
Details
What did the Bombay High Court say?
The Bombay High Court ordered the Kochhars' release on a Rs. 1 lakh cash bail each but added they should cooperate with the CBI.
Rejecting CBI's appeal against their bail, the division bench of Justices Revati Mohite-Dere and Prithviraj K Chavan said, "The petitioners' arrest [is] not in accordance with law and not in compliance with Section 41 A of the Criminal Procedure Code."
Development
HC reserved its decision last week
On Friday, the bench reserved its decision on the Kochhars' plea for interim release.
Recently, a special court sent the Kochhars and Videocon Group Chairman Venugopal Dhoot to 14-day judicial custody till January 10 after the CBI didn't seek further custody for interrogation.
Notably, the Kochhars were arrested on December 23, and Dhoot three days later, in connection with the Videocon loan scam matter.
Arguments
Kochhar arrested 'arbitrarily,' says her lawyer
Representing Kochhar, advocate Amit Desai argued that her arrest was in violation of Section 41A of the Criminal Procedure Code (CrPC) as the investigating officer didn't issue the mandatory notice of appearance before her arrest was made.
Desai said his client has always cooperated with the CBI probe, and noted no inquiry took place until 2022 when the CBI FIR was filed in 2019.
Argument
CBI defended arrest under these grounds
Senior advocate Raja Thakare, representing the CBI, stated the Kochhars' refusal to cooperate would have undoubtedly jeopardized the investigation, and hence their arrest was a must.
He further stated that instead of an HC plea, the accused could have submitted an application for regular bail.
Thakare noted that the accused were remanded only for eight days and the agency did not seek further custody.
Case
What does the CBI FIR say?
The CBI named the Kochhars, Dhoot, NuPower Renewables managed by Deepak, Supreme Energy, Videocon International Electronics, and Videocon Industries in its FIR.
It was registered under the Indian Penal Code sections pertaining to criminal conspiracy and the Prevention of Corruption Act.
It claimed ICICI Bank sanctioned Rs. 3,250cr-worth credit facilities to Videocon Group companies, violating its credit policy, RBI rules, and Banking Regulation Act.
Allegations
Illegal dealings between Kochhars and Videocon?
The CBI is also looking into the alleged favors that Dhoot returned to the Kochhars in exchange for the loan, per reports.
The FIR claims that between 2010-12, Dhoot invested Rs. 64 crore in NuPower Renewables, which is run by Deepak, through Supreme Energy Private Limited (SEPL).
Later, he also reportedly transferred SEPL to Pinnacle Energy Trust, which is also controlled by Deepak.
Enforcement Directorate
ED's case based on CBI's complaint
The Enforcement Directorate (ED) is also investigating the matter based on the CBI's FIR.
The agency arrested Deepak in 2020 after filing a criminal case of money laundering against him.
As part of its probe, the ED found loans sanctioned by ICICI Bank under Kochhar's tenure were kept active through refinancing to the tune of Rs. 1,730cr, which subsequently became bad loans in 2017.