Chennai, Oct 5 (IANS): All is not well in the government insurance sector with regard to elevation of officials, it seems.

Recently, orders by two different High Courts, in a matter of two months, relating to non-promotion of insurance industry experts, has shocked the sector.

In both cases, the court decisions were in favour of the petitioners.

In one case, the aggrieved party is Ravi, General Manager, National Insurance Company Ltd.

And in the other, it was S.N. Jayasimhan, Joint Director now known as General Manager, Insurance Regulatory and Development Authority of India (IRDAI).

In Jayasimhan's case, the Telangana High Court held that the IRDAI's then Chairman did not have the authority to relax the qualifications for selecting a person to the post of Chief General Manager.

As per the IRDAI norms, only a Fellow Chartered Accountant (FCA) can be considered for the post of Chief General Manager while the action of the Chairman in relaxing FCA to CFA/ICWAI (Chartered Financial Analyst/Institute of Cost and Works Accountants of India) and providing appointment to another is without jurisdiction and arbitrary.

The high court ordered that Jayasimhan, FCA, is the only person qualified and the IRDAI shall consider his case for the post of Chief General Manager forthwith with all consequential benefits.

It also set aside the promotion orders of Mamata Suri, Executive Director, Insolvency and Bankruptcy Board of India, on deputation from the IRDAI, holding that Suri does not possess the FCA qualification and her promotion is illegal.

The court also held that the power of relaxing the qualification is not vested with the Chairman since no resolution to that effect has been passed.

Hence the action of the Chairman in relaxing FCA to CFA/ICWAI and promoting Suri is contrary to law, arbitrary, and without jurisdiction.

On her part, Suri preferred an appeal against the Single Judge's order. The Bench ordered an interim suspension of the Single Judge order, but added its order does not come in the way of the IRDAI promoting Jayasimhan in the existing vacancies.

The Delhi High Court on Monday held that the Banks Board Bureau (BBB) cannot select the General Manager and Directors of public sector general insurers as it is not a competent body.

It also ordered setting aside of appointments made pursuant to the selections of General Manager and Directors of public sector general insurers are liable to be set aside.

In his case, Ravi had complained people junior to him were selected by the BBB for the position of Director in public sector general insurers twice - in August 2020 and May 2021.

The court held that the circulars enabling the BBB to select the General Manager and Directors of government owned general insurers are not legally valid and are set aside.

"Consequently, the impugned selections could not have been undertaken by the BBB. The appointments made pursuant to the impugned selections of General Manager and Directors of PSICs (public sector insurance companies) are liable to be set aside. It is ordered accordingly," it declared.

Interestingly, the other question that would arise is that when the BBB is not competent to select Directors, then how competent is it to select the Chairman and Managing Directors of the public sector general insurers.