Case:- WP(C) No. 2303/2024 v. Union Territory of Jammu & Kashmir

Section 5(2) provided a person, company, firm, association of persons entitled to apply for licence.

12. Section 6(4) provided tenure of given licence to be for a period of three years with a provision for renewal thereof.

13. Section 7 provided for renewal of an issued license to be applied for within sixty days before the scheduled expiry date. Section 7(3) was empowering the Controlling Authority, constituted under section 3, to renew an expiring license or refuse the renewal of granted license but same to take place by an order in writing whereas in the event of refusal of renewal, a reasonable opportunity of being heard to be afforded to a licensee seeking renewal.

14. For the working of the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015, in terms of its section 26, rules were actually framed vide SRO No.114 dated 01.04.2016 to be known as the Jammu & Kashmir Private Security Agencies (Regulation) Rules, 2016.

15. In terms of said Rules of 2016, rule 3 provided the manner of making an application for grant of license, whereas rule 9 dealt with procedure with respect to grant of licence. Rule 10 provided the 5 WP(C) No. 2303/2024 conditions of grant of license and rules 11 and 12 with respect to renewal of licence and conditions of renewal of license.

16. During the subsistence of the licence period, the B. D. Security Private Ltd.’s, director-Tirlok Singh had come to resign from his directorship in December, 2019, whereas director- Tejinder Singh resigned from his position as director from the Board of Directors on 01.05.2023 leaving the petitioner No. 3 – Sahil Gupta to be rejoined by the petitioner No. 2 – Smt. Suman Gupta so as to become two directors of B. D. Security Pvt. Ltd.

17. It is an undisputed record based fact that the petitioner No. 2 – Smt. Suman Gupta, was an ex-director of B. D. Security Pvt. Ltd., and in fact, being one of two founding directors of B. D. Security Pvt. Ltd., having subscribed to its articles of association in the year 2006 and continuing as director of B. D. Security Pvt. Ltd., till her resignation in March, 2015. Thus, it was the petitioner No. 2 – Suman Gupta’s, rejoining the B. D. Security Pvt. Ltd., in 2020 when the private security licence of B. D. Private Security Ltd., was very much in force.

18. The petitioner No. 2 – Smt. Suman Gupta also happens to be the mother of the petitioner No. 3 – Sahil Gupta.

19. License No.Home/PSARA/23/2017/16 dated 19.03.2019 issued in favour of the B. D. Security Pvt. Ltd., by reference to the name of its Director – Tejinder Singh under the Jammu Kashmir Private Security Agencies (Regulation) Act, 2015 was endorsed to be valid for a period of five years expiring on 18.03.2024 with effect 6 WP(C) No. 2303/2024 from 19.03.2019 as per the tenure provided in terms of rule 9(3) of SRO No.114 dated 01.04.2016 formed under Jammu & Kashmir Private Security Agencies (Regulation) Rules, 2016 although tenure of license under section 6(4) (a) of Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 was actually provided to be for three years.

20. Notwithstanding the contradiction of tenure of licence in terms of the said Act on one hand and the Rules on the other hand, the license No.Home/PSARA/23/2017/16 dated 19.03.2019 of B. D. Security Private Ltd., came to run its full five years’ tenure.

21. During subsistence licence No. Home/PSARA/23/2017/16 dated 19.03.2019 of B. D. Security Private. Ltd., issued under the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015, the J&K Re-organization Act, 2019 came into picture which repealed the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 to be replaced by the Private Security Agencies (Regulation) Act, 2005.

22. B. D. Security Private Ltd., incorporated on 14.03.2006 under the Companies Act, 1956 transformed itself into a public company under section 18 of the Companies Act, 2013 with due approval of the Central Govt. granted vide No. SRN AA6247783 dated 27.11.2023 and, accordingly, getting re-named as B. D. Security Ltd., i.e. the petitioner No. 1 herein and consequently a new certificate of incorporation being now a public company came to 7 WP(C) No. 2303/2024 be issued by the Registrar of Companies, Jammu with corporate identity No. U7 4920JK2006PLC002638.

23. At the time of this transformation from a private to public company, the petitioner No. 1 was having the petitioners No. 2 & 3 as its two directors and license No.Home/PSARA/23/2017/16 dated 19.03.2019 was being operated by it.

24. The licence renewal applied for by the petitioner No. 1 came to be dealt with by the Controlling Authority under the Private Security Agencies (Regulation) Act, 2005 as being the law having come in force in the UT of Jammu & Kashmir in place of the repealed Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 whereunder original licence No.Home/PSARA/23/2017/16 dated 19.03.2019 was actually issued.

25. Private Security Agencies (Regulation) Act, 2005 coming to replace the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 in the Union Territory of Jammu & Kashmir was not having any rules to operationalize the provisions of Private Security Agencies (Regulation) Act, 2005 in the Union Territory of Jammu & Kashmir until May, 2022 when in exercise of power under section 25 of the Private Security Agencies (Regulation) Act, 2005, the Jammu & Kashmir Private Security Agencies (Regulation) Rules, 2022 came to be framed in the form of S. O. 227 dated 05.05.2022.

26. The licenses issued under the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 were continuing to have 8 WP(C) No. 2303/2024 their validity preserved notwithstanding the expiry of the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 as the Private Security Agencies (Regulation) Act, 2005 getting operationalized in the Union Territory of Jammu & Kashmir upon framing of the Jammu & Kashmir Private Security Agencies (Regulation) Rules, 2022 vide S. O. 227 dated 05.05.2022 at no point of time ever called upon the licensees existing under the regime of the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 to come forward for getting their respective licences validated under the Private Security Agencies (Regulation) Act, 2005.

27. Section 8 of the Private Security Agencies (Regulation) Act, 2005 provides for renewal of licence requiring an application to be made to the Controlling Authority accompanied by requisite fees and other documents required under sections 6, 7 & 11 of the said Act and further providing refusal to renew the licence to be effected by an order in writing on the basis of reasonable opportunity of being heard made available to the applicant seeking renewal of the licence.

28. Rule 4 of S.O. 227 of 2022 provides conditions for grant of licence. Rule 4(6) mandates upon a licensee not to change the management forming the Agency unless an approval is sought from the Controlling Authority for which Controlling Authority is seek a report from the CID, J&K before such an approval is granted. 9 WP(C) No. 2303/2024

29. As against prescription of rule 5 of S.O. 227 of 2022 with respect to renewal of licence, rule 10 of SRO 114 of 2016 had provided for conditions for grant of licence under Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 mandating upon a licensee to inform the Controlling Authority regarding any change in the address of persons forming the agency and change of management within seven days of such change.

30. Rule 6 of S.O. 227 of 2022 provides conditions for renewal of licence and the said conditions are reproduced hereunder:- “6. Conditions for renewal of license- The renewal of the licence shall be granted subject to the following conditions, namely:- (i) The applicant continues to maintain his principal place of business in the jurisdiction of the Controlling Authority; (ii) The applicant continues to ensure the availability of the training for its private security guards and supervisors required under sub-rule (2) of rule (8) of these rules; (iii) The applicant continues to adhere to the license conditions; (iv) The applicant has no criminal antecedents as may be verified from a database of crime and criminals as also obtained from other means as provided in proviso to sub rule (4) of rule 3.

31. The respondent No. 2, as being the Controlling Authority under the Private Security Agencies (Regulation) Act, 2005, by its communication No.HOME-PSAR/22/2024(CC:7420313)

18.09.2024 came to ascribe violation of rule 4(6) of S. O. 227 of 2022 stating that the petitioner No. 1 had violated condition of license by changing the management forming the Agency without approval from the Controlling Authority and that being a breach of condition of licences attracted effect of section 13 of Private Security 10 WP(C) No. 2303/2024 Agencies (Regulation) Act, 2005 and, therefore, the application for renewal of licence submitted by the petitioner No. 1 was being rejected. The District Magistrate, Jammu came to be instructed by said communication from the end of the respondent No. 2 to take immediate necessary action in the matter by closing down the operation of B. D. Security Ltd. i.e. the petitioner No. 1.

32. The aforesaid communication dated 18.09.2024 to the District Magistrate, Jammu resulted in a communication No. DMJ/LO/24-25/2043-45 dated 19.09.2024 addressed to the Tehsildar Bahu from the end of the District Magistrate, Jammu directing closing down of the operation of the petitioner No. 1 as a security agency.

33. It is the interplay of the aforesaid two communications which afforded cause of action for the petitioner to come up with the present writ petition assailing the two communications on a different grounds of challenge one of which being that the purported rejection of renewal of licence of the petitioner No. 1 was not based upon any opportunity of being heard made available to the petitioners as required by the mandate of section 8(3) of the Private Security Agencies (Regulation) Act, 2005.

34. Section 8 of the Private Security Agencies (Regulation) Act, 2005 is reproduced hereunder:- “8. Renewal of licence:- (1) An application for renewal of licence shall be made to the Controlling Authority, not less than forty-five days before the date of expiry of the period of validity thereof, in such form as may be prescribed and shall be 11 WP(C) No. 2303/2024 accompanied by the requisite fee and other documents required under sections 6, 7 and I I of this Act. (2) The Controlling Authority shall pass an order on application for renewal of licence within thirty days from the date of receipt of application complete in all respects. (3) On receipt of an application under sub-section (I), the Controlling Authority may, after making such inquiries as he considers necessary and by order in writing, renew the licence or refuse to renew the same: Provided that no order of refusal shall be made except after giving the applicant a reasonable opportunity of being heard.”

35. From the perusal of impugned communication No.HOME-PSAR/22/2024(CC:7420313) dated 18.09.2024 of the respondent No. 2 to the respondent No. 3 – District Magistrate, Jammu, there is no doubt to the fact that the petitioners were not at all afforded an opportunity of being heard in any manner whatsoever by the Controlling Authority which opportunity, if granted, would have enabled the petitioners to apprise and satisfy the Controlling Authority that the petitioner No. 1 had suffered no change of legal status and its management as an Agency in the sense that the petitioner No. 1 continues to be a company though from being originally a private into now a public one and the board of directors remaining the same as was at the time of original incorporation of the B. D. Security Private Ltd., before becoming a public company as the petitioner No. 1.

36. The very fact that a valid licence was existing in favour of the petitioner No. 1 – B. D. Security Ltd., which was applied for its renewal is a pointer to the fact that with its changed nomenclature from B. D. Security Pvt., Ltd., to have new name as the petitioner 12 WP(C) No. 2303/2024 No. 1 -B. D. Security Ltd., its license continued to stay in existence and operative without any question and that name amendment cannot be read against the petitioner No. 1 – B. D. Security Ltd. because as a company it has remained the same except dropping of word “private” from its name identity and also the set of directors have also remained same all along its inception till its currency with intervening exists and absence and that should not count as a disqualification that the petitioner No. 1 – B. D. Security Ltd to be a licensee.

37. Be that as it may, the subsistence of licence for its given tenure of five years was under the Jammu & Kashmir Private Security Agencies (Regulation) Act, 2015 read with its Rules of 2016 which did not have any such rider as is now under rule 4(6) of S.O. 227 of 2022 whereas under SRO 114 dated 01.04.2016 whereby the Jammu & Kashmir Private Security Agencies (Regulation) Rules, 2016 came into being, its rule 10 mandated only an information to the Controlling Authority regarding any change in the management of the agency and, as such, by that reference the petitioner No. 1 – B. D. Security Ltd. did not earn any disqualification by the purported change of management so to say with the resignation of two of its directors, namely, Tejinder Singh & Tirlok Singh and in coming of the petitioner No. 2 – Suman Gupta as one of the two current directors joining the petitioner No. 3 - Sahil Gupta, when the petitioner No. 2 – Suman Gupta was already a founder director of the petitioner No. 1-B. D. Security Ltd. 13 WP(C) No. 2303/2024

38. In the light of the aforesaid, given the fact that the purported non-renewal petitioner’s licence No. Home/PSARA/23/2016/16 dated 19.03.2019 was effected without affording opportunity of hearing as mandated under section 8(3) of the Private Security Agencies (Regulation) Act, 2005, as such, the writ petition can be disposed of at its inception stage and, thus, the impugned communication No. HOME-PSAR/22/2024 (CC:7420313) dated 18.09.2024 is set aside. The Controlling Authority under section 3 of the Private Security Agencies (Regulation) Act, 2005 with respect to the Union Territory of J&K is directed to consider afresh the renewal claim of the petitioner No. 1 – B. D. Security Ltd. for renewal of licence No. Home/PSARA/23/2016/16 dated

19.03.2019 within a period of three months’ from the date of receipt of certified copy of this order by affording opportunity of hearing to the petitioners and also by bearing in mind the facts and circumstances of the case and the position of law adverted to by this Court herein above.

39. Disposed of. JAMMU 26.09.2024 Muneesh (RAHUL BHARTI) JUDGE Whether the order is speaking : Yes / No Whether the order is reportable : Yes / No Muneesh Sharma 2025.01.04 16:40 I attest to the accuracy and integrity of this document