The Bombay High Court on Monday ordered release of former ICICI Bank CEO and MD Chanda Kochhar and her husband Deepak Kochhar in the ICICI Bank-Videocon loan case.
The high court said the arrests were "not in accordance with the law".
A division bench of Justice Revati Mohite Dere and Justice PK Chavan stated the arrests were in violation of Section 41A of the Code of Criminal Procedure (CrPC), which mandates sending notice for appearance before the concerned police officer.
The Kocchar couple had termed their arrest "illegal" on the ground that no sanction was obtained before their arrest by the CBI as required under provisions of the Prevention of Corruption Act (PCA).
Chanda's lawyers also argued that she was arrested without complying with Section 46(4) of the Code of Criminal Procedure as there had been no presence of a female police officer during her arrest.
The Kochhars' petition in the high court had questioned the timing of the arrest as their son's wedding is scheduled in January.
The duo's bail comes two weeks after they were arrested by the CBI for alleged irregularities in ₹3,250-crore worth of loans provided to the Videocon group. The investigative agency also arrested Videocon chairman Venugopal Dhoot on December 26.
A special CBI court had extended the custody of former ICICI Bank chief executive Chanda Kochhar, her husband Deepak Kochhar and Videocon group chairman Venugopal Dhoot last month.
The CBI, which launched an enquiry into the alleged bank fraud in 2018, had filed a first information report (FIR) against Kochhar, her husband and Dhoot in 2019. Supreme Energy, Videocon International Electronics and Videocon Industries were also named in the FIR.
Kochhar found herself under a cloud of suspicion after a whistleblower levelled allegations of corruption and nepotism with respect to loans extended to Videocon and Dhoot's investment and stake transfer in NuPower Renewables, a company floated by Chanda Kochhar's husband, Deepak Kochhar.
It has been alleged that after Videocon secured the loan, the company's chairman Dhoot invested ₹64 crore in NuPower Renewables.
An independent probe, set up by the bank's board in May 2018 and led by Justice B.N. Srikrishna, found that Kochhar violated the bank's code of conduct in disbursal of loans to Venugopal Dhoot's Videocon Group. The alleged "quid pro quo" in loans disbursed by ICICI Bank to Videocon also resulted in the bank treating Kochhar's resignation in October 2018 as "termination for cause".
The bank also revoked all her entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested unexercised stock options, and medical benefits. The lender also clawed back all bonuses paid to Kochhar from April 2009 until March 2018.
Nupower Renewables was incorporated on December 24, 2008, with Deepak Kochhar, Venugopal Dhoot, and Saurabh Dhoot as the first directors of the company.
On January 15, 2009, the Dhoots resigned from the directorship of the company. However, before quitting, Venugopal Dhoot allotted 1,997,500 warrants to Deepak Kochhar at the rate of ₹10 per warrant, on an initial payment of ₹1 per warrant. The loans to Videocon Group companies eventually turned into non-performing assets (NPAs) by 2017.