The Bombay High Court on Monday granted bail to former ICICI Bank CEO and MD Chanda Kochhar and her husband Deepak Kochhar in a loan fraud case, saying their arrest was not in accordance with the provisions of law.

A division bench of Justices Revati Mohite Dere and P K Chavan held that the arrest of Kochhars was in violation of Section 41A of the Code of Criminal Procedure (CrPC), which mandates sending notice for appearance before the police officer concerned.

The couple was arrested by the Central Bureau of Investigation (CBI) on December 23, 2022 in connection with the Videocon-ICICI Bank loan case. They are presently in judicial custody.

Apart from the Kochhars, the CBI has also arrested Videocon group founder Venugopal Dhoot in the case. He is also in judicial custody.

"According to the facts, the petitioners' (Kochhars) arrest was not done in accordance with the provisions of law. There has been non-compliance of section 41(A) thus warranting their release," the high court said.

"The arrest has not been in conformity with the provisions of law," it added.

The bench directed the duo to deposit a cash bail amount of Rs one lakh each.

The couple's lawyer later said they would now initiate the process before the special CBI court for their release.

The HC said the duo shall cooperate with the probe and attend the CBI office as and when summoned.

The court also asked the Kochhars to surrender their passports to the CBI.

The order was passed on petitions filed by Chanda Kochhar and her husband, challenging their arrest by the CBI in connection with the Videocon-ICICI Bank loan case.

The duo in their pleas said their arrest by the CBI was arbitrary and illegal.

Senior counsel Amit Desai appearing for Chanda Kochhar had argued that she was arrested without compliance under Section 46(4) of the CrPC as there was no presence of a female police officer during her arrest.

The section stipulates that no woman can be arrested after sunset and before sunrise without obtaining prior permission of the judicial magistrate.

Desai submitted that Chanda Kochhar's arrest memo did not include the name of the female police officer.

He further said Chanda Kochhar had cooperated with the CBI in its probe into the case and appeared before the agency as and when summoned for questioning.

Desai submitted that Chanda Kochhar had offered to give a statement to the CBI in 2019 when the FIR was registered, however she received no response.

Till July 2022, the CBI had not even issued summons, and then there was arrest in December on the ground of non-co-operation. "What is it that compelled the CBI to exercise powers of arrest? Ground of non co-operation is subjective”, Desai submitted.

Senior counsel Vikram Chaudhari appearing for Deepak Kochhar had argued that the latter had also been co-operating with the central agency in its probe into the case.

However, senior counsel Raja Thakare, appearing for the CBI, said there was no violation of statutory or constitutional provisions during the arrest of Kochhars.

The CBI has alleged that private sector lender ICICI Bank had sanctioned credit facilities to the tune of Rs 3,250 crore to the companies of Videocon Group promoted by Dhoot in violation of the Banking Regulation Act, Reserve Bank of India's guidelines, and credit policy of the bank.

The CBI had named Chanda Kochhar, Deepak Kochhar as well as Dhoot along with Nupower Renewables (NRL) managed by Deepak Kochhar, Supreme Energy, Videocon International Electronics Ltd and Videocon Industries Ltd as accused in the FIR registered in 2019 under Indian Penal Code sections related to criminal conspiracy and provisions of the Prevention of Corruption Act.

The central agency has alleged that the ICICI Bank sanctioned credit facilities to the tune of Rs 3,250 crore to these companies in violation of norms.

It further alleged that as a part of quid pro quo, Dhoot made an investment of Rs 64 crore in Nupower Renewables through Supreme Energy Pvt Ltd (SEPL), and transferred SEPL to Pinnacle Energy Trust managed by Deepak Kochhar through a circuitous route between 2010 and 2012.