PSARA 2005 : Critical Review and Analysis

Economists often talk about the institutional constraints which hinder the growth and development of a country, and one important example of such a constraint is the legal system in India.

In 1998, a commission for the review of administrative laws in India was set up to examine all the central acts, and sets of rules, regulations and administrative instructions issued under different central acts. It was reported that there were 2500 central laws in force besides a large number of overlapping rules, regulations and instructions, and some of them could not even be traced out from the records.

Further the legislatures of the states have also the power to enact laws as per concurrent list III (Seventh schedule) of the constitution whereby the states also issued state rules where central acts with model rules may be available already.

 Labor laws

Under article 246 of the Indian constitution, the subject of labor has been placed in the Concurrent List – except the labor and safety in mines, oilfields, and industrial disputes concerning union employees which were made the part of the Union list. Consequently, the enactment of labor laws by states has resulted in various loopholes such as inter-state variations in labor laws and their enforcement, the reports and returns under various labor laws are not uniform and standardized in all the states, and compliances are difficult as enforcement action varies from state to state.

Moreover, in the case of a decision of discharge and/ or dismissal of a workman by the employer, it is the labor court which is to be satisfied with reasons, and if the labor court is not satisfied it may set aside the order of such discharge or dismissal. Similarly, a labor court may also set aside orders of reinstatements. Such blanket powers granted to the labor courts restrict the authority and freedom of employers, and that hinders the development of any industry.

Private security industry

Private security agencies were earlier required to comply with the statutory responsibilities under the labor laws and the rules prescribed thereunder, and other allied enactments like the Employees Provident Fund Act 1952, the Employees State Insurance Act 1948, the Equal remuneration Act 1976, the Minimum Wages Act 1948, the Workman Compensation Act 1923, the Payment of Gratuity Act 1972, the Interstate Migrant Workman Act 1979, and the Shops & Establishment Act 1958.

Private Security Agencies (Regulation) Act (PSARA) was enacted in 2005 to oversee and regulate a large number of unregulated security groups and senas operating in the country. In the ‘Introduction’ to the Private Security Agencies (Regulation) Act 2005 it was laid that the growing tendency to hire private security guards had led to proliferation of private security agencies and there was a growing concern about the manner of functioning of these agencies, many of which were conducting their operations without any due care to even the verification of the an tecedents of the personnel employed as private security guards and supervisors.

The union government was considering regulating the functioning of these private security agencies so that they are run within the legal parameters and are accountable to a regulatory mechanism. The private security agency regulation bill was passed by both the houses of parliament and received the assent of the President on 23 June 2005. This Act came into the statute book as ‘The Private Security Agencies (Regulation) Act 2005.’

Law and order – A state subject

The seventh schedule of Article 246 of the Constitution has listed law and order/ police under the State List. Item 1 and 2 of the state list have often come in the way of any further mandate to be given to the center under Article 355, and any additional provision or amendment in the seventh schedule of Article 246, (State List), cannot be made without affecting the basic constitutional structure.

Being a state subject, different state governments took their own time to frame state rules under PSARA. About twenty six states and UTs adopted PSARA and issued their rules at the end of 2010, and the remaining dispensed it by 2016.


Any good law should be regulatory in nature. Though the acronym ‘PSARA’ connotes to ‘Private Security Agencies Regulation Act,’ but a number of provisions by way of restrictions and restrains inscribed in the Act are strangulatory in nature, and they are therefore not conducive for the growth and development of the sector. This can also lead to the legal wrangling and battles in the courts of law. In PSARA, some sections of the Act are not only restrictive but also vague and not properly worded. Their interpretations can vary and could create hurdles in the compliance of various provisions.

Section 6(2)

Section 6(2) of the Act lays down the eligibility criteria for procuring license for guarding services. The Section mentions that a person shall not be considered eligible for license for his firm, if the same is not registered in India; or is having the proprietor or a majority stakeholder or a director who is not a citizen of India.

Intention of the provision is to allow licenses only to the companies and proprietors who are citizens of India; however, in the absence of any clear and direct limitation clause, there is a scope that the company could be run by someone from abroad by having stakeholders/ shareholders as Indian citizens.

Section 7(4)

Section 7(4) stipulates the need of making enquiries and verifications in writing for getting no objection certificate from the concerned authority for the purpose of registration and grant of license. The renewal of license under PSARA by the competent controlling authority is a painful, torturous and lengthy process. There are prolonged delays in view of the mind set of lower police functionaries. Further there is absence of proper dialogue or positive interaction between controlling authorities and the private security entrepreneurs which makes the process of verification and registration cumbersome and lengthy.

Section 13

Section 13 defines the rank of controlling authority as the rank of a joint secretary or equivalent by appointment. However, there is also a provision that any official subordinate to the authority can act as a controlling authority by notification. Further, Section 13(f) under the heading of ‘cancellation and suspension of license’ says that the license holder shall be punishable for an offence of impersonation (as a public servant) committed by such subordinates.

Section 13(h) makes it clear that if the license holder has willfully failed or refused to render services agreed to be provided to a person, he/ she shall be liable for punishment. The agreement between security service provider and client is essentially of civil nature and any dispute between the service provider and the service taker can be decided in the civil court or by arbitration etc., as provided in their mutual agreement. The interpretations of various clauses of this agree ment depend on the civil court or arbitrator. The controlling authority decision to cancel the license on the basis of his interpretation of the agreement can create a conflict between the civil court/ arbitrator, and the controlling authority.

Section 15(2)

Under Section 15(2), the controlling authority can call for any information from a supervisor or even security guard which is considered necessary for the compliance of the Act. It is however, not specified that what type of information can be asked for and obtained. Such interference from the controlling or a notified authority would result in diluting the position of the owner or his senior management over his subordinate resulting in indiscipline and laxity of control over them.

Section 16

Section 16 of PSARA provides that the controlling authority or his notified subordinate can enter the premises and inspect and examine the place of business, the records, accounts and other documents, and may also take away copy of these documents. However, following points pertaining to this authority have not been made clear and specific in this provision:

  • How often and when would such inspections of records be carried out,
  • What are the specific records which would be demanded and inspected, and
  • Can the concerned official under PSARA have access to all types of records including records and books maintained under various other laws?

The inspection of such records which are under the preview of other laws such as labor, PF, ESI, IT Acts etc., by an appointee of controlling officer may create a conflict in the jurisdiction of the controlling authority under PSARA with other legal authorities.

Section 19

Section 19 provides delegation by notification to the subordinate officer to perform the duties of a controlling officer. Delegations can also be made by the state government under this rule. Such notifications can specify that the concerned subordinate authority shall be empowered to exercise or perform duties as provided to the controlling authority.

However, the section does not define the level/ hierarchy of the subordinate official who can be appointed by notification. Besides, unless the subordinate officer so notified is regularly monitored by an officer of the rank of joint secretary or equivalent (as mentioned in the Act) proper implementation and compliance could remain in question. The exercise of arbitrary and discretionary powers by the notified subordinate officer can also lead to all the evils normally associated with the exercise of discretions.

Section 21

Section 21 provisions for the offence of unauthorized use of some types of uniform. In the case of a default, the individual offender as well as the proprietor or maintaining director of the security agency is punishable to imprisonment up to one year. Generally, an individual cannot be punished for an offence committed by some other person unless his involvement in the commission of that offence is also proved. It is not only legally unjustified but also violates the fundamental principal of natural justice.

Furthermore, under the provisions of section 21 read with 13(k) of the PSAR Act, an owner of the security agency can be penalized for laxity, negligence or misbehavior of any guard thereof up to the extent of the cancellation of license.

Rules & regulations

The model rules and regulations under PSARA have been framed by the central government which provide for the states to frame their own rules ‘so far as they are practicable and conform to such model rules.’ However, the rules and regulations issued by states are normally not found in con formity with the central model rules, and that is another flaw. Besides, the state rules made by various governments under section 25(2) are also not in conformity with one another.

The main points stipulated in the rules pertain to the following subjects:

  • Verifications of antecedents.
  • Subjects and syllabus for training.
  • Inspection of training by the officer of controlling authority.
  • Standard of physical fitness.
  • Provision for supervisors.
  • Grant of license.
  • Granting of license for the area of operation.
  • The renewal of license and re-verification.
  • Method of submission of application.
  • Appeals.
  • Procedure & maintenance of various registers etc.

In view of the given ambiguities and lacunas in various provisions of the Act, and also for the variations in the rules issued by different states, there is an urgent need for the state and central governments to address these issues in overall interest of the private security sector which employs approximately seven million personnel and has an annual growth rate of about 25 per cent. The private security sector is the second largest employer of manpower after the agriculture sector and thus needs to be given special attention by the Government of India and all state governments.

Need of amendments

Amendment of any Act involves a long and protracted procedure like vetting at various levels and the final approval by both the Houses of Parliament. The central and state governments of India should consider amending rules to facilitate better implementation of the PSAR Act – both in the interest of enforcing authorities and the security service providers. Amendments on the followings matters need immediate attention:


Section 10(1) of the Act prescribes that the verification of a character and antecedents thereof should be ensured by the security agencies/ employers themselves in respect of their guards etc. However, in a number of states, as their rules provision, the verification is done through the police, which is a long drawn out and tortuous process.

Recommendation: It is advisable to bring about such relevant stipulation in the rules whereby verifications could be obtained by a security agency on its own through the local Sarpanch or Naib/ sub-tehsildar, or equivalent revenue or police official of the area.

Training syllabus

Clause (d) of the sub-section (1) of section 10 of PSARA provides for the type of training to be imparted under the model rules. It states that the training would include the subjects as listed in the model rules, and a minimum training period of hundred hours of classroom instruction and sixty hours of field training is required to be followed. Though the state rules conform to the total period of training as above yet there are a number of variations in terms of subjects covered during training in different states.

Recommendation: There is a need to bring uniformity in the training syllabus of all states.

Training institutions

The central model rules suggest that the training of the security personnel should be ensured by the security agency as per the Act, and the training facility of the security group would be inspected at least two times in a year by the competent authority in respect of the functioning thereof. Even for the renewal of license, the applicant agencies are required to continue to ensure the availability of the training for the private security guards and superiors as per sub-section (2) of the section 5 of the Act.

However, in a large number of states training institutions have been established by individuals and/ or groups of individuals as recognized by the state controlling authority which has resulted in monopolization of training institutions and the consequent evils associated with such monopolistic enterprises.

Recommendation: The need of having a training institution affiliated to the state should be urgently re-considered, and the rules be made in all states that should allow training to be imparted in the facility of a security agency under the close checking and supervision of the controlling authority of the respective states.

Physical standards

Though the physical standards of security personnel are laid down in clause (e) of the sub-section (1) of section 10 of PSARA but there are variations in the standards in different states under their state rules. This has created anomaly as guard recruited with some physical standards as laid down by the one state may not be eligible to be enlisted as guard in another state.

Recommendation: Rules need to be amended to specify uniform physical standard applicable to all states except for candidates belonging to some hill tribes and classified areas and states, like Gorkhas etc., where different physical standards are inevitable.

Number of supervisors

As per sub-section (3) of section 9/ section 10, there is one supervisor to supervise the work of not more than fifteen private security guards. In case the private security guards are on security duty in different premises, it is not practical to supervise their work by one supervisor; the agency shall depute more number of supervisors to make it at least one supervisor for every six private security guards. However, this norm varies from state to state.

Recommendation: Rules should be suitably amended to enforce uniformity in the number of supervisor in the security agencies all over the country.

In addition to the above suggestions the state governments should pay attention to the following matters:

  1. States should review the stipulation regarding the cancellation of license for offences committed by a guard, and punishments therefor.
  2. State government should also consider ensuring that controlling authority delegate power by notification only to Gazetted officers in the states.
  3. The process of getting ‘no objection certificate’ requires to be made quicker, precise and objective.
  4. Requirements of providing arms to the private security guards is the need of the hour, and therefore it should be considered under PSARA keeping in view the provisions of the Arms Act.


Any good governance must be humane and futuristic in nature so that its rules and regulations are able to cater to the new challenges, and the evolving methodologies and dynamics of the stakeholders. The governance responsibility as laid down in PSARA needs review so that the regulation based mindset is shifted to facilitation based approach.

No doubt that the enactment of PSARA (Private Security Regulation Act) in the year 2005 was a step towards the right direction but with the passage of time it has been experienced that some provisions of PSARA and their control mechanism at the state level is restricting the growth of the Private Security Industry.

PSARA, as a hurriedly introduced legislation, suffers from serious lacunas. Some provisions of this Act are not only vague but are also in contradiction to the fundamental rights and other prevailing laws in the country.

It needs to be appreciated that the focus of the state is gradually shifting from maintenance of law and order to ensuring safety environment to the citizens at large. India has one of the lowest police-population ratio and to fill this vacuum, private security sector can act as a force multiplier to supplement the police. It can be used as a complimentary force for community security and crime prevention, and with the passage of time, the role of the private security may have to be upgraded to ‘para police’ like that of para medicos and para legal.

Private security industry is generating very high rate of employment and is perhaps making the highest monetary contribution to the public exchequer. This needs to be given due recognition. At this stage, there is an urgent need to make course corrections in the regulatory mechanism of private security agencies in the states and amendments of rules for the effective management of private security sector in the country.



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