Can the chairman of the Insurance Regulatory Development Authority of India (IRDA), which oversees the country’s multibillion-dollar insurance industry, change the qualification requirements for senior officials? On September 1, the High Court of Telangana (HC) issued 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 than the CFA.
The IRDA under Vijayan promoted Mamta Suri to the post of Chief Director General (CGM) instead of Jayasimhan Sathyamangalam, who then addressed the court. Calling the appointment incompetent, arbitrary and against the law, the HC retrospectively ordered the promotion of the ignored candidate. Sathyamangalam is currently the Managing Director.
The court ruled that the power to relax the required qualification – namely, fellow chartered accountant (FCA) – does not lie with the president since no resolution to that effect has been passed. “Therefore, the action of the president to relax the FCA as CFA / ICWAI providing the appointment to the unofficial defendant is an action without jurisdiction and is an arbitrary action and it is also against the law,” said the Judge T Amarnath Goud in his order.
In addition to ruling Suri’s promotion illegal as of 2014, the court asked IRDA to remove, among others, ICWAI and CFA as eligible qualifications. The ordinance stated that CFA stands for Chartered Financial Analyst and FCA stands for Chartered Accountant Colleague. CFA is a financial and investment management course offered by the Institute of Chartered Financial Analysts of India (ICFAI), while an FCA is a qualification obtained by an associate accountant after five years of practice as a as an accountant after obtaining the title of Associate Chartered Accountant (ACA).
The method of recruitment for the post of Senior Joint Director (CGM) is by promotion among the Joint Directors (GM) after four years, subject to merit, aptitude and seniority. Suri’s appointment is illegal because his qualification is CFA, and also for the reason that on the date of the notification (October 23, 2013) the unmodified 2009 Executive Regulations were in force, which stipulate that only the FCA is eligible for qualification, stressed the court, thus granting the writ requests and setting aside the contested orders.
As Jayasimhan is the only person qualified for the vacant post, the respondents can consider him for the vacant post with all the attendant benefits, the court added.