JAIPUR: A single judge bench of the Rajashan High Court today asked LIC of India to explain the reasons for abrupt discontinuation of services of Financial Service Executives (FSS) employed since 2007 under a scheme run by LIC throughout the country.
The bench asked LIC to file its response by April 21 when the Court would hear the matter for grant of interim orders on the petition that alleged abrupt discontinuation of contract of FSE's across the country.
Justice Anupender Singh Garewal issued the notice to the Chairman, the Managing Director of LIC, Mumbai, senior Regional Manager LIC, New Delhi, and Divisional Manager LIC Ajmer.
It was alleged in a petition filed by one Gyan Prakash Mishra and others, who were appointed as FSE in year 2008, that LIC-appointed the FSEs as catalyst between the Bank and LIC who had tied up for insurance of account holders of bank.
The counsel for the petitioners argued that the LIC board floated a scheme in the year 2007 for procuring insurance business from bank through agents called FSEs and for which MBA degree-holders were engaged initially for a period of 3 years extensible for another 2 years. However, since the scheme continued successfully, LIC kept renewing the contract annually for 8 years and suddenly in January, 2015 decided not to extend the FSEs contract beyond the period of 8 years but did not discontinue the scheme of 2007.
It was further argued by the advocate that pursuant to the decision of LIC of 2015 the services of the petitioners are to be discontinued with effect from April 30, 2016.
It was contended by the lawyer that the Supreme Court has laid down the position of law and accordingly any contractual or ad hoc employment has to be coterminus with the scheme
under which contractual engagement is made. Thus, when the scheme is continuing, the LIC cannot terminate their contract with effect from April 30, 2016.