Money & Banking

Telangana HC directs IRDA to promote overlooked senior official

PALAK SHAH Mumbai | Updated on September 21, 2021

Terms relaxation of qualification in favour of another candidate as contrary to law

Can the chairman of the Insurance Regulatory Development Authority of India (IRDA), which oversees the country’s multibillion-dollar insurance sector, change the qualification terms of appointment of senior officials? On September 1, the Telangana High Court (HC) passed an order against the decision of former IRDA chairman TS Vijayan to relax the minimum qualification for the appointment of a senior official. Vijayan relaxed the requirement from chartered accountant (CA) to chartered financial analyst (CFA) in 2014. A CA degree is more rigorous compared to CFA.

IRDA under Vijayan promoted Mamta Suri as the Chief General Manager (CGM) instead of Jayasimhan Sathyamangalam, who then approached the court. Calling the appointment as one without jurisdiction, arbitrary and contrary to law, the HC directed the promotion of the ignored candidate retrospectively. Sathyamangalam is currently a general manager.

Revitalising insurance

The court ruled that the power of relaxing the required qualification — namely, fellow chartered accountant (FCA) — is not vested with the Chairman since no resolution to that effect has been passed. “Hence the action of the Chairman in relaxing FCA as CFA / ICWAI providing appointment to the unofficial respondent is one without jurisdiction and is arbitrary action and it is also contrary to law,” said Justice T Amarnath Goud in his order.

Insuring the insurers

Apart from terming Suri’s promotion as illegal with effect from 2014, the court asked IRDA to inter-alia delete ICWAI and CFA as eligible qualifications. The order stated that CFA means chartered financial analyst and FCA means fellow chartered accountant. CFA is an investment and financial management course offered by the Institute of Chartered Financial Analysts of India (ICFAI), whereas an FCA is a qualification attained by an associate chartered accountant after five years of practice as an accountant after qualifying as an associated chartered accountant (ACA).

The method of recruitment for the post of Senior Joint Director (CGM) is by promotion from among Joint Directors (GM) after four years, subject to merit, suitability and seniority. The appointment of Suri is illegal as her qualification is CFA, and also for the reason that, as on the date of the notification (October 23, 2013) the un-amended Executive Rules 2009 were in force, which stipulate only FCA as the eligible qualification, the court pointed out, thus allowing the writ petitions and setting aside the impugned orders.

As Jayasimhan is the only person qualified for the vacancy, the respondents can consider him for the vacancy with all consequential benefits, the court added.

Published on September 21, 2021

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