34BPower of Authority to remove managerial persons from office

34B. Power of ¹[Authority] to remove managerial persons from office. --(1) Where the ¹[Authority] is satisfied that in the public interest or for preventing the affairs of an insurer being conducted in a manner detrimental to the interests of the policy-holders or for securing the proper management of any insurer it is necessary so to do, he may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, any director or the chief executive officer, by whatever name called, of the insurer.

(2) No order under sub-section (1) shall be made unless the director or chief executive officer concerned has been given a reasonable opportunity of making a representation to the ¹[Authority] against the proposed order:

Provided that if, in the opinion of the ¹[Authority], any delay would be detrimental to the interests of the insurer or his policy-holders, he may, at the time of giving the opportunity aforesaid or at any time thereafter, by order direct that, pending the consideration of the representation aforesaid, if any, the director or, as the case may be, chief executive officer, shall not, with effect from the date of such order, --

(a) act as such director or chief executive officer of the insurer;

(b) in any way, whether directly or indirectly, be concerned with, or take part in, the management of the insurer.

(3) Where any order is made in respect of a director or chief executive officer of an insurer under sub-section (1), he shall cease to be a director or, as the case may be, chief executive officer of the insurer and shall not, in any way, whether directly or indirectly, be concerned with, or take part it, the management of any insurer for such period not exceeding five years as may be specified in the order.

²[(4) If any person in respect of whom an order is made by the Authority under sub-section (1) or under the proviso to sub-section (2), contravenes the provisions of this section, he shall be liable to a penalty of one lakh rupees for each day during which such contravention continues or one crore rupees, whichever is less.]

(5) Where an order under subsection (1) has been made, the ¹[Authority] may, by order in writing, appoint a suitable person in place of the director or chief executive officer who has been removed from his office under that sub-section, with effect from such date as may be specified in the order.

(6) Any person appointed as director or chief executive officer under this section shall--

(a) hold office during the pleasure of the ¹[Authority] and subject thereto for a period not exceeding three years or such farther periods not exceeding three years at a time as the ¹[Authority] may specify;

(b) not insure any obligation or liability by reason only of hi s being a director or chief executive officer or for anything done or omitted to be done in good faith in the execution of the duties of his office or in relation thereto.

(7) Notwithstanding anything contained in any law or in any contract, memorandum or articles of association, on the removal of a person from office under this section, that person shall not be entitled to claim any compensation for the loss or termination of office.]