Indicating a possible scenario, industry observers say the government will now go ahead and appoint GMDs of PSU general insurers who can be selected by the FSIB and these GMDs( each company has provisions for two GMDs) can be given temporary charge of CMD of the companies wherever vacancies are there
New Delhi:
The PSU general insurance industry, which was eagerly waiting for the Delhi High Court (Delhi HC) judgement on “Singh Vs Government of India” case over the appointment of CMD of United India Insurance (UII) involving Banks Board Bureau(BBB), has now to wait longer as the case once again has been adjourned the September 8.
Justice Rekha Patil of Delhi HC has partly heard the matter today and listed the case for final arguments for 8th September, said court sources.
While the details of the adjournment process of the case, running for the last nine months, are yet to be known, it is now very clear that the government can’t appoint new CMDs for New India Assurance(NIA) and Agriculture Insurance Company(AIC) till a final verdict of the ongoing matter is out.
NIA, the listed and country’s largest general insurer, doesn’t have a regular CMD for over last four months after Atul Sahai retired from the post in February end and Malaya Poddar, CMD, Agriculture Insurance Company, is retiring this month end.
Though, the government in the meantime has already formed Financial Services Institution Bureau (FSIB) to replace BBB, earlier the head hunting agency of the government to select the top management of PSU insurance companies and banks. it has mandated FSIB only to select general manager and directors(GMDs) of PSU general insurers and not their CMDs along with chairperson and four MDs of Life Insurance Corporation(LIC).
Sources at the ministry of finance pointed out that the government is waiting for the final judgement of the Delhi HC on “Singh Vs Government of India” case before mandating FSIB to select CMDs of general insurers and LIC’s chairperson and four MDs.
The government could empower FSIB to select GMDs as Delhi HC had earlier,while disposing of “Ravi vs Government of India case’’, had struck down the power of BBB to select GMDs of PSU general insurers.
After the judgement, all the GMDs, who were selected by the BBB ,were reverted back as general mangers by the MoF.
Indicating a possible scenario, industry observers say the government will now go ahead and appoint GMDs of PSU general insurers who can be selected by the FSIB and these GMDs (each company has provisions for two GMDs) can be given temporary charge of CMD of the companies wherever vacancies are there.
But it is not yet known, whether the MoF will reinstate all the GMDs who were selected by the BBB through FSIB or will seek fresh applications from new candidates.
In November 2021, Inderjeet Singh, general manger, 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.