The Delhi High Court judgement that the Banks Board Bureau (BBB) cannot select the General Manager and Directors of public sector general insurers has cost a couple of officials their board positions, said a senior industry official.
“A handful of officials in the government-owned general insurance companies have been impacted by the court order,” the official, who did not want to be identified, told IANS.
Listed reinsurer General Insurance Corporation of India (GIC Re), in a regulatory filing, has said Madhulika Bhaskar, General Manager has vacated office as Director with effect from November 3, consequent to Delhi High Court’s order in Ravi vs. Union of India & Others.
The Delhi High Court in October this year had held that the 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.
The ruling came on a case filed by National Insurance Company Ltd General Manager Ravi, complaining 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 also held that the circulars enabling 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.
According to an industry official, there is no additional pay when a General Manager is selected as a Director but he/she and their family members get the medical insurance benefit.