The outcome of the `Singh Vs Government of India case may impact the appointments of many existing CMDs of PSU general insurers, chairman and also managing directors of LIC, who were all selected by the BBB over the last four years
`The alternative framework to BBB for the selection of top PSU insurers is almost ready and waiting for the final approval of PMO, which had rejected some of the earlier suggestions, from the MoF on the issue. We will implement it once the Delhi HC delivers its final verdict,” said sources at the MoF
New Delhi:
The Delhi High Court(Delhi HC) on Monday adjourned the “Singh Vs Government of India” case over the appointment of CMD of United India Insurance (UII) involving Banks Board Bureau(BBB), which can give a jolt to all the existing regular CMDs of PSU general insurance companies along with chairman and four managing directors of Life Insurance Corporation(LIC), by a week to May 26 .
It is learnt, the case which was to come for hearing and judgment today, was not listed in the court’s day’s timetable and afterwards was adjourned to next Thursday.
A few months back, Inderjeet Singh, general manger, New India Assurance(NIA), had gone to Delhi HC on the issue of appointment of Satyajit Tripathy (who is currently CMD, United India Insurance (UII)) by the government on the basis of recommendation of the BBB, the head hunting agency of the government to select the top management of PSU insurance companies and banks.
Singh’s petition was that though he was originally selected by the BBB for the post of UII, the government finally chose Tripathy, who was chosen as a reserved candidate by the agency for the post.
Industry sources said that though Singh’s name was forwarded to the Prime Minister Office (PMO) by the ministry of finance (MoF), on the basis of BBB’s selection, for the final set of approvals, it was rejected by the PMO as some complaints against Singh had surfaced in the meantime.
Then, Tripathy who was in the reserve list as prepared by the BBB, was cleared by the PMO for UII’s top post.
Sources point out, though the exact details of the complaints are not yet made public, it is alleged that Singh, who was posted abroad earlier, had drawn excess salary by `mistake’ but had refunded it soon after he found out the lapse.
Though, industry observers describe the `lapse’ as a very `minor one’, the government was silent as to why it rejected Singh for the UII’s top post at the last moment and whether it made any attempts under the due process of law to find out the exact nature of `lapse’ committed on the part of Singh in overdrawing his salary before denying him UII post.
Finally, Singh had decided to appeal his case in the Delhi HC on two counts in November 2021.
The first one was that as BBB had selected him as the main candidate for the UII top post, the government should have appointed him there and secondly, how Tripathy who was selected as a reserved candidate by the BBB can be appointed as the UII chief.
However, after being pointed out by the Delhi HC that BBB’s power to select directors in the PSU general insurance industry has already been disallowed by the same court, Singh had withdrawn his first plea and now only pursuing the second plea in the Delhi HC.
Delhi HC had already served notices to the Government of India and Tripathy on the matter.
The case has already been adjourned four times in the last 7 months.
The outcome of the `Singh vs Govt of India” case may impact the appointments of many existing CMDs of PSU general insurers, chairman and also managing directors of LIC, who were all selected by the BBB over last four years.
Earlier, while deciding another case involving a general manger of a PSU general insurance company, Delhi HC had struck down the BBB’s power to select directors of PSU general insurance companies and the government has already implemented the verdict by cancelling all the appointments of then serving directors who were selected by the BBB.
In view of Delhi HC’s earlier decision on the BBB and Singh’s pending case in the same court, the MoF is unable to use the BBB’s platform to select any new CMDs for the PSU insurance companies which it has been doing since 2018.
MoF sources point out, with the assumption that BBB will not anymore be allowed to select any top officials of the PSU insurers by the Delhi HC , the government is now ready to activate an alternative mechanism to conduct the exercises for selecting the top management of PSU insurers,
`The alternative framework of BBB for the selection of top PSU insurers is almost ready and waiting for the final approval of PMO, which had rejected some of the earlier suggestions, from the MoF on the matter. We will implement it once the Delhi HC delivers its final verdict,” said sources at the MoF.
Meanwhile, New India Assurance(NIA), the listed and country’s largest general insurer, doesn’t have a regular CMD for almost last 80 days after Atul Sahai retired from the post in February end.
With the prolonging court case and delay in starting the selection procejures, the aspirations of some of the senior officials, who are in the race for the job, are getting thwarted as they are nearing their retirements.