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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8814   OF  2011

The Security Association of India & Anr.                 .… Appellants

Versus:

Union of India & Ors.                                              ....Respondents

WITH CIVIL APPEAL NOS. 8670, 8671, 8673, 8709  OF  2011 CONTEMPT PETITION (CIVIL) NO.268 OF 2010 IN CONTEMPT PETITION (CIVIL)  NO.68 OF 2010 CONTEMPT PETITION (CIVIL) NO.68  OF 2010 IN C.A. NO. 8814 OF 2011 C.A. NO.4889              OF  2014 (Arising out of SLP(C) No. 8979 of  2013)

J U D G M E N T

Pinaki Chandra Ghose, J.

1. Leave granted in  Special  Leave Petition (Civil)  No.8979 of  

2013.

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2. The present batch of appeals has arisen from the common  

judgment and order dated 14th August, 2009 passed by the High  

Court of Judicature at Bombay in a batch of writ petitions being  

Writ Petition Nos. 1804 of 2007, 64 of 2004, 2316 of 2008  and  

200 of 2008.  

3. The  High  Court  by  means  of  the  common  impugned  

judgment disposed of the writ petitions filed by various security  

agencies  which  claimed  that  after  enactment  of  the  Private  

Security Agencies (Regulation) Act, 2005 (hereinafter referred to  

as the “Central Act”) by the Parliament, the Maharashtra Private  

Security Guards (Regulation of Employment & Welfare) Act, 1981  

(hereinafter referred to as the “State Act”) is not applicable to the  

private security agencies and if the State Act remains in operation  

with  respect  to  private  security  agencies  then  the  State  

Government  be  directed  to  expeditiously  pass  orders  on  the  

pending applications for exemption  under the provisions of the  

State Act as allowed under Section 23 of the State Act. The High  

Court found the State Act to be in consonance with the Central  

Act  and directed the  State  Government  to  pass  orders  on  the

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applications  for  exemption  or  applications  for  renewal  of  

exemption filed by the security agencies.  

4. As the present appeals challenge the validity of a State Act  

in light of  a Central Act, the legislative history of the same has to  

be examined in the light of the current facts. The State Act which  

came into force on June 29, 1981 received the Presidential assent  

envisaged  under  Article  200  of  the  Constitution  of  India  on  

September 24, 1981. Under the said Act, the Maharashtra Private  

Security  Guards  (Regulation  of  Employment  and  Welfare)  

Scheme, 1981 (hereinafter referred to as ‘Scheme of 1981’) was  

put  into place.  The constitutional  validity  of  the State Act  was  

challenged  before  the  Bombay  High  Court  in  M/s  Tradesvel  

Security Services vs.  State of Maharashtra1 and the High Court  

vide its  order  dated November  2,  1982 upheld  the Act  on the  

ground  of  it  being  a  complete  Code  and  allowed  exemptions  

under Section 23 at initial stage only. The matters came before  

this Court as special leave petitions which were dismissed in 1983  

and the Scheme of 1981 was stayed with a direction to the State  

Government to dispose of all the applications for exemptions and  

1 1982 Bom LR Vol. LXXXIV 608

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the  same  order  was  subsequently  modified  directing  that  the  

scheme be brought into force.

5. The State Government duly considered and rejected all the  

applications and twenty five writ petitions were filed before the  

High Court  challenging the rejection by the State Government.  

These  writs  were  dismissed  and  the  Division  Bench  while  

disposing of the appeals arising therefrom, vide order dated July  

11, 1985 stated that the applications were rejected as a result of  

a  policy  decision  not  to  grant  exemption  and  the  same  is  

incorrect,  therefore  it  was  directed  that  the  exemption  

applications  be  considered  afresh  on  a  case  by  case  basis.  

Against the same, the Security Guards Board constituted under  

Section 6 of the State Act, filed special leave petitions before this  

Court. The said special leave petitions were disposed of  in term  

of the order passed by this Court on April 28, 1987  in  Security  

Guards Board for Greater Bombay and Thane District vs. Security   

& Personnel Services Pvt. Ltd. & Ors.2, holding that the State Act  

being a welfare statute is enacted to prevent exploitation, that  

exemption  is  not  for  any  security  guard  but  security  guards  

2 (1987) 3 SCC 413

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working  in  factories  or  establishments  and  the  like  and  that  

agencies can also apply for the same.  

6. The  State  Government  vide  Notification  dated  March  28,  

1990  under Section 23 of the State Act granted exemption to  

security guards supplied by private security agencies without any  

reference to a class or classes of factories. The said Notification  

was  challenged  by  the  Trade  Unions  before  the  High  Court  in  

Maharashtra Rajya Suraksha Rakshak and General Kamgar Union   

and  Ors.  vs.  State  of  Maharashtra  and  Ors.3.   The  High  Court  

relying on the judgment of this Court in Security Guards Board for   

Greater  Bombay  and  Thane  District  vs.  Security  &  Personnel   

Services  Pvt.  Ltd  &  Ors.  (supra)  and  struck  down  the  said  

Notification on the ground that exemption under Section 23 of the  

State Act can only be granted to security guards in relation to a  

class or classes of factories and establishments which were not  

mentioned in the Notification. A Special Leave Petition was filed  

against the aforementioned decision of the High Court and this  

Court  issued  directions  that  State  Government  should  make  

certain clarifications by way of amendments in the State Act  

3  (1994) IIILLJ 946 Bom

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7. Subsequently,  the  State  Act  was  amended  by  the  

Maharashtra  Private  Security  (Regulation  of  Employment  and  

Welfare) Amendment Act, 1996 and the amending Act explicitly  

stated that the amendments are clarificatory in nature. It must be  

noted that the amendments to the State Act were challenged in  

Krantikari  Suraksha  Rakshak  Sanghatana  vs.  State  of   

Maharashtra  &  Ors.  4 and  the  Division  Bench  upheld  the  

amendments vide order dated October 10, 2006, and stated that  

the amendments only removed the ambiguities in the State Act.  

In these backdrop facts arise Civil Appeal No. 8814 of 2011.   

8. Appellant  No.1  in  this  appeal  is  an  Association  of  private  

security  agencies  (hereinafter  referred  to  as  the  “Appellant  

Association”)  whose  members  are  engaged  in  the  business  of  

employing training, outfitting and equipping security guards and  

thereafter providing and/or supplying exempted security guards  

to their clients/principal employers. Appellant No.2  is a member  

of the Appellant Association.

9.  Prior  to  January,  1997,  some  members  of  the  Appellant  

Association  on  application   had  obtained  an  exemption  under  4 2006 (6) ALL MR 401

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Section 23 of the State Act read with the Scheme of 1981 vide a  

common Notification dated January  22,  1997 and amended by  

Notification dated March 1, 1999. It  has been claimed that the  

agencies  named  in  the  Notification  had  sought  renewal  of  

exmeptions  and  that  respondent  No.6  being  the  State  of  

Maharashtra  (hereinafter  referred  to  as  “respondent  State”)  

failed and neglected to renew the said Notification, which led to  

the filing of several writ petitions. Pursuant to the orders of the  

High Court, the members of the Appellant Association continued  

to carry out their business.

10. In  November  2002  the  respondent  State  framed  the  

Maharshtra  Private  Security  (Regulation  of  Employment  and  

Welfare)  Scheme,  2002  (hereinafter  referred  to  as  ‘Scheme of  

2002’), replacing the Scheme of 1981. The Scheme of 2002 was  

challenged in Maharashtra Suraksha Rakshak Aghadi vs. State of   

Maharashtra  in  W.P.  No.1085/2003 and upheld by the Bombay  

High Court in the same writ  by an order dated June 23, 2003.  

Subsequently, some of the members of the Appellant Association,  

on  application,  obtained exemptions  in  respect  of  the  security  

guards employed by them and deployed at the establishments of

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their client/principal employers for a period of three years each.  

Some of the notifications were to expire in July, 2006 and some in  

2007. Though all the concerned agencies duly applied for renewal  

of  exemption  notifications,  it  has  been  alleged  that  the  State  

Government  wilfully  and deliberately  delayed the consideration  

and decision on all such applications for exemption.    

11. The Parliament enacted the ‘The Private Security Agencies  

(Regulation)  Act,  2005’  (hereinafter  referred to as the “Central  

Act”)   which  came  into  force  on  March  14,  2006.  Under  the  

provisions of the Central Act, the State of Maharashtra along with  

other States were required  to appoint the Controlling Authority as  

contemplated  under  Section  3  thereof  and  frame  rules  as  

contemplated under Section 25 of the Central Act.  However, it  

has been stated that the respondent State failed to appoint any  

Controlling  Authority  or  frame  rules,  as  a  result  of  which  the  

members  of  the  Appellant  Association  could  not  obtain  the  

requisite licences under the Central Act. Some of the members of  

the Appellant Association, therefore, filed a writ  petition before  

the  High  Court  in  September,  2006,  inter  alia, praying  for  a  

direction  to  the  respondent  State  for  appointing  forthwith  the

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Controlling Authority and framing the rules. Writ Petition No.2633  

of 2006 along with some other writ petitions were disposed by the  

High Court as the writ petitioners did not press the same when  

they  learnt  that  the  respondent  State  was  in  the  process  of  

complying with the Central Act.

12. On February 23, 2007, the State of Maharashtra designated  

the Principal Secretary (Special), Home Department, Government  

of  Maharashtra  (respondent  No.2  herein)  as  the  Controlling  

Authority  and  his  powers  and  functions  were  delegated  to  

respondent Nos.3 to 5.  By Notification dated 14th March, 2007,  

the  State  of  Maharashtra  framed  “The  Maharashtra  Private  

Security  Agencies  (Regulation)  Rules,  2007”.  Thereafter,  the  

members of the Appellant Association made applications for issue  

of licences under Section 7 of the Central  Act so as to enable  

them to carry on their business of security agency but the same  

were  not  issued  by  the  authorities  concerned.  The  Security  

Guards Board for Greater Mumbai and Thane District (hereinafter  

referred  to  as  “the  Board”)  started  threatening  the  principal  

employers  with  prosecution  under  the  State  Act  unless  the  

principal employers get themselves registered with the Board and

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engage  security  guards  of  the  Board.  The  members  of  the  

Appellant Association and their clients/principal employers started  

receiving show cause notices for prosecuting them.  

13. Aggrieved  by  the  aforementioned  act  of  the  Board,  the  

members of the Appellant Association filed writ petitions before  

the  Bombay  High  Court.   Upon  the   statement  made  by  the  

learned Advocate General that all the applications filed by the writ  

petitioners under Section 23 of the State Act would be decided by  

the State Government within a period of three months, the High  

Court directed the Board not to take coercive action against the  

writ petitioners. The High Court by a common judgment and order  

dated  August  14,  2009  disposed  of  all  the  writ  petitions  but  

directed the interim order to continue for a period of eight weeks.  

The appellants are thus before us in these appeals.   

14. Mr. J. P. Cama, learned senior counsel, who was leading the  

case of the appellants in the titled appeal, during the course of  

hearings  submitted  a  Note,  comparing  the  State  Act,  and  the  

Central Act and on the basis of the same it has been contended  

by him that the two enactments are in the nature of a ‘complete

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code’  as  they  specify  the  rights,  duties  and obligations  of  the  

parties governed and that there is no provision in either of the  

enactments making the Central Act subject to any pre-condition  

of  the  State  Act.   In  support  of  the  same,  he  submitted  this  

Court’s decisions in State of Punjab vs. Labour Court, Jallundhar &   

Ors.5 ,  Premier Automobiles Ltd. vs. Kamlekar Shantaram Wadke   

of  Bombay  &  Ors.6  and  that  in  Krantikari  Suraksha  Rakshak  

Sanghatana vs. Bharat Sanchar Nigam Limited & Ors.7  In those  

cases, this Court while dealing with the same State Act held that  

the State Act is a self contained Code applying only to the pool  

guards i.e the Board Guards. It has been contended that the High  

Court  erroneously  concluded  that  there  is  nothing  in  common  

between the two acts under different entries of the Union List and  

Concurrent List; because then it is ex-facie unsustainable for the  

High Court to hold that the operation of the Central Act must be  

subject to the State Act.  Mr. Cama has further contended that if  

both the Acts are to survive then they must be construed in a  

manner  wherein  the  security  guards  get  to  choose  between  

joining the respondent Board under the State Act or work under  5 (1980) 1 SCC 4  6 (1976) 1 SCC 496 7 (2008) 10 SCC 166

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the  coverage  of  the  State  Act  without  going  through  the  

exemption provisions of the State Act and that there is no warrant  

which restricts or interferes with the rights of licensed security  

agencies to commence work with the guards who have chosen to  

work under them. However, if such contention of the respondents  

is to be accepted then a Security Guard who wants to be covered  

by the Central Act would first have to compulsorily register and  

seek exemption under the State Act and then seek employment  

under  the  Central  Act.  It  has  been  submitted  that  such  a  

circuitous method to come under the Central Act has not been  

contemplated and is absurd. That if such situation is accepted by  

this Court then rights of the appellants are not interfered with and  

the Acts operate separately, however, any other position will lead  

to repugnancy.

15. Mr. Cama, learned senior counsel, without prejudice to the  

above,  has  further  submitted  that  the  primary  contention  

between the two parties is that neither of the Acts prescribes that  

the rights of security agencies shall be subject to exemption of  

security guards under Section 23 as concluded by the High Court  

without  any  reasoning  in  support  of  the  same.  It  has  been

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submitted that the language of the Acts is clear without intending  

to bring any interdependence between the two Acts and that the  

holding in the impugned judgment is subjective ipse dixit subject  

to their own inference on how the two statutes should be read.  

The same amounts to judicial legislation which is not permissible  

under the law as held by this Court in Bharathidasan University &  

Anr.  vs.  All  India Council  for  Technical  Education & Ors.8  It  is  

submitted that in the impugned judgment Section 9 of the Central  

Act has been incorrectly interpreted ignoring the fact that though  

the Central Act does not cast an obligation on security agencies to  

carry on business it certainly recognizes their fundamental right  

to  do  so.   It  has  also  been  submitted  that  the  State  of  

Maharashtra never complied with their statement that they will  

grant  exemption within six  months.  That the contention of  the  

State and the Board before the High Court that Section 23 only  

applies to security agencies who were in business on the date of  

enactment and not thereafter, would completely exclude security  

agencies  starting  business  after  1981.  If  such  contentions  are  

allowed then the right to carry on business under Article 19(1)(g)  

8 (2001) 8 SCC 676

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of the Constitution would be violative. Furthermore,  it has been  

submitted that the High Court while upholding the validity of the  

scheme ignored the pertinent submission that Clause 13(1)(b) of  

the Scheme of 2002 which prohibited the principal employer from  

engaging  any  private  security  guards  is  incorrect  as  it  allows  

State monopoly.  

16. It has been submitted by Mr. Cama, learned senior counsel  

that the two Acts are repugnant.  Section 23 of the State Act and  

Section 9 of the Central Act deal with the same issue substantially  

and  only  through  Section  23  of  the  State  Act  private  security  

agencies are permitted to operate subject to conditions imposed  

by  the  Board.   Section  23  regulates  the  commencement  and  

operation of private security guard agencies under the State Act,  

thereby in conflict  with the Section 9 of the Central  Act which  

admittedly  regulated  the  commencement  and  operation  of  

security  guards  agencies  under  the  Act.  Furthermore,  different  

pre-conditions are laid down in both the statutes which created a  

direct  and  substantive  repugnancy  between  Section  23  of  the  

State  Act  and  Section  9  of  the  Central  Act.  It  has  also  been  

contended  by  learned  senior  counsel  that  the  repugnancy  is

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substantial and not incidental and in light of the same it has been  

submitted, as held by the High Court, that the commencement of  

the Central Act and the rights and obligations of the parties under  

the same are subject to grant of exemption under Section 23 of  

the State Act, then Section 23 acts as a condition precedent for  

the operation of the Central Act.  Such break in the operation of  

the Central  Act  clearly  indicated that  the encroachment  is  not  

incidental but substantial,  as incidental encroachment does not  

affect the existence of two statutes simultaneously. Furthermore,  

the holding of the High Court in this regard is also incorrect.

17. It  has  also  been  submitted  by  Mr.  Cama,  learned  senior  

counsel  that  Article  246(1)  of  the  Constitution  gives  the  

Parliament a blanket power to make law to govern the whole of  

India. The non-obstante clause makes it clear that irrespective of  

the rights  of  the States  to  legislate  under List-II  or  List-III,  the  

Parliament is supreme and there is no need for the legislations to  

be in the concurrent list before a ban falls upon the inconsistent  

State  enactment.  As  per  Article  246(1)  of  the  Constitution,  

legislation of the Parliament will govern and there is no need for  

direct conflict.  Mr. Cama in light of the above submission drew

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our  attention  to  the  decisions  of  this  Court  in  Hoechst  

Pharamaceuticals  Ltd  &  Ors.  vs.  State  of  Bihar  &  Ors.9,   

Government of Andhra Pradesh & Ors vs. J.B. Educational Society   

& Anr.10, State of West Bengal & Ors. vs. Committee for Protection   

of Democratic Rights of West Bengal & Ors.11.  Furthermore,  Mr.  

Cama it has been submitted that the conflict between ‘policy’ of  

the State Government and ‘express legislation’ by the Parliament  

was  settled  in  State  of  Maharashtra  vs.  Sant  Dnyaneshwar   

Shikshan Shastra Mahavidyalaya & Ors.12, wherein this Court held  

that when parliamentary enactment covers a subject  then ‘state  

policy’ does not apply. Thus, when the Central Act legislates on  

the issue of security guards at a national level then the State Act  

which sets out State Policy must give way to the Central Act. In  

light  of  the above,  it  has  been brought  to  our  notice that  the  

Central Act which enables the application of nine labour statutes  

on  private  security  guards,  apart  from regulation  of  agencies,  

deals  with  all  matters  relating   to  private  security  guards  and  

juxtaposed to the Central Act the State Act has a narrower scope  

9 (1983) 4 SCC 45 10 (2005) 3 SCC 212 11 (2010) 3 SCC 571 12 (2006) 9 SCC 1

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as it is applicable in certain parts of Maharashtra with respect to  

employment  in  factories  and  establishments.  That  the  

interpretation  of  the High  Court  creates  a  situation where  two  

separate  statutes  apply  to  security  guards  and  Agencies  in  

factories and establishments in the same State.  

18. Mr.  Cama in his submissions drew our  attention to Article  

254  of  the  Constitution.  He  submitted  that  Article  254(1)  

demonstrates that the Parliament has an overriding right to make  

any enactment in respect of the items in the Concurrent List and  

that  as  per  Article  254  (2),  when any  law made by  the  State  

Legislature  under  the  Concurrent  List  is  repugnant  to  the  

provisions  of  a  Parliamentary  Law  and  unless  the  same  has  

received Presidential assent the State Law will  give way to the  

Parliamentary Law. It has further been stated that when the High  

Court held the State Act to fall  within the ambit  of List-III  and  

Central Act to fall  under the residuary power in List-I,  then the  

High Court cannot simultaneously hold that State Act controls the  

Central Act as that is possible only when they fall under the same  

list, thereby attracting Article 254(1).  Furthermore, both Section  

9 and Section 23 regulate operation of security guard agencies

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and  both  the  Acts  substantively  deal  with  the  employment  of  

private security agencies and private security guards engaged by  

them  and  the  terms  and  conditions  of  their  individual  

employment. It is submitted that the aforementioned submission  

must  be  considered  in  light  of  the  decision  in  Thirumuruga  

Kirupananda  Variyar  Thavathiru  Sundara  Swamigal  Medical   

Educational & Charitable Trust vs. State of Tamil Nadu & Ors.13,   

wherein this Court held that even if  two Acts are not in direct  

conflict, there would be repugnancy of the superior legislation if it  

shows an intention to cover the whole field.  

19. Mr.  Cama on behalf  of  the appellants has also contended  

that Section 23 of the Central Act violates Article 19(1)(g) of the  

Constitution  because  Section  23  when  read  with  the  licensing  

provisions of the Central Act creates a position where a security  

agency to commence its business is made subject to the vagaries  

of  a  possible  exemption  of  necessary  security  guards  and  

interferes with their fundamental right to commence and carry on  

business. This position is further worsened when the concerned  

agency  is  unable  to  find  a  guard  who  wants  to  apply  for  

13 (1996) 3 SCC 15

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exemption and especially in light of the fact that there is no pool  

of  exempted  guards,  that  there  is  no  time  limit  for  the  State  

Government  to  act  on  an  exemption  application   and  that  is  

subject to the discretion of the State Government.  It  has been  

further submitted that the power of discretion given to the State  

Government  by  means  of  Section  23  is  uncanalized  and  

unregulated  upon  their  subjective  satisfaction  for  a  specified  

period  only  for  all  or  such  class  or  classes  and  such  power  

interferes with the agency’s right to business which will be subject  

to  the  opinion  of  the  State  Government.  It  has  also  been  

submitted that the benefits under the Central Act are as good or  

even  better  than  those  provided  in  the  State  Act.   Mr.  Cama  

placed reliance on the comparative Note submitted by him during  

the course of arguments  and stated that the Central  Act also  

allows  the  State  Government  to  make  rules  and  they  can  

incorporate  the  beneficial  provisions  in  the  Rules  under  the  

Central Act.

20. The  submissions  of  the  Appellant  Association  were  finally  

concluded  by  Mr.  Cama  on  the  Note  that  in  light  of  the  

unsustainable view of the High Court both the Acts can operate

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simultaneously,  it  is  submitted  that  as  canon  of  construction,  

every Court can read two independents statutes subject to each  

other but it also must be noted that where the language of the  

Act is unambiguous, nothing must be read into it.  It was further  

submitted that a statute must be read as it stands in the facts of  

legislations  by  incorporation  or  legislation  by  reference,   a  

separate  statute  can  be  read  into  another  statute  and  that  

requires  an express  statutory  provision.  In  this  light,  the relief  

sought before us is that either it must be clarified that the two  

Acts operate in their  own field and that  the Central  Act  is  not  

subject to exemption under Section 23, and if not then the State  

Act must give way to the Central Act on being repugnant to the  

same.

21. It  is the case of Dr. A. M. Singhvi, learned senior counsel,  

appearing for the appellants in the connected appeal, being Civil  

Appeal  No.  8671  of  2011,  that  Section  1(4)  exempts  security  

guards  who  are  direct  and  regular  employees  of  a  factory  or  

establishment, however the appellant (being HSBC) would prefer  

to  hire  security  guards  of  private  agencies  due  to  certain  

advantages. The two private security agencies being respondent

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Nos.7 and 8 (in Civil Appeal No. 8671 of 2011) were supplying the  

appellant with security personnel exempted under Section 23 of  

the State Act. However, the application for renewal made by the  

appellant  under  Section  23   was  kept  pending  by  the  State  

Government  and  the  agency  had  applied  for  a  license  under  

Section  4  of  the  Central  Act  and  was  entitled  to  commence  

business in light of the proviso to Section 4. While the appellants  

awaited  for  their  licence  the  State  Government  initiated  penal  

action against the appellants for engaging non-exempted security  

guards, against which a writ petition disposed by the impugned  

judgment was filed. In light of the same, it has been submitted by  

Dr. Singhvi that certain parts of the State Act and the Scheme are  

repugnant to the Central Act.

22. Mr C.U. Singh, learned senior counsel appeared on behalf of  

Mumbai International Airport Pvt. Ltd.  being the appellant in Civil  

Appeal No.8670 of 2011 and  Convergys India Services P. Ltd &  

Anr.  being the  appellants  in  Civil  Appeal  No.8709 of  2011.  He  

adopted the arguments tendered by Mr.  Cama and Dr.  Singhvi  

and  in  addition  thereto,  he  advanced  arguments  on  six  more  

grounds.  The first ground being that the provisions of the prior

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State  Act  of  1981  and  the  Scheme  framed  thereunder  are  

inconsistent with the provisions of the later Central Act and they  

must give away to the extent of the inconsistency. In light of the  

same it  has been submitted that regardless of the Central  Act  

being traced to List-I of the Seventh Schedule, the Central Act will  

prevail to the extent of inconsistency in view of Article 246(1) and  

if  the Act is  traceable to List-III,  then it  will  prevail  due to the  

Proviso to Article 254(2).  Mr. Singh in furtherance of the same  

placed the decisions of this Court in H.S. Srinivasa Raghavachar &  

Ors vs. State of Karnataka & Ors.14 and State of Kerala & Ors. vs.   

Mar Appraem Kuri Company Limited & Anr.15

23. The second ground raised by Mr Singh is that the State Act  

does not have any express provisions for registration of private  

security agencies or for  regulating their  activities and business  

under the Scheme  and therefore it is only the latter Central Act of  

2005 which can regulate or control their activities. In light of the  

same it has been put forth by Mr. Singh that the State Act is an  

enabling legislation which operates through the Scheme and in  

14 (1987) 2 SCC 692 15 (2012) 7 SCC 106

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the entire corpus of the State Act and the Scheme of 2002 there  

is no provision requiring registration of private security agencies  

and  that  only  the  Central  Act  regulates  and  governs  private  

security agencies, which  fall out of the scope of the State Act and  

cannot  be  forced  to  seek  an  exemption  from  the  same.  

Furthermore, this also indicates that Section 23 is in conflict with  

the Central Act.

24. The third ground of submission raised by Mr. Singh is that  

the Central Act juxtaposed to the State Act is a special statute  

whereas the State Act is a special statute in relation to the Board  

Guards and a general statute with respect to the private security  

guards, who choose not to register with the Board and that the  

latter specific statute passed by the Parliament must prevail over  

the prior general statute of a State legislature. In furtherance of  

the same he placed before us the decision of this Court in  P.V.  

Hemlatha  v.  Kattamkandi  Puthiya  Maliackal  Saheeda16 and  a  

Constitutional Bench decision in Ashoka Marketing Ltd. & Anr vs.   

Punjab National Bank & Ors.17,  which upheld the maxim  “leges  

posteriors  priores  contrarias  abrogant”.   The  fourth  ground  of  16 (2002) 5 SCC 548 17 (1990) 4 SCC 406

Page 24

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submission is that in any event the application and operation of  

the later Central  Act  are made subject  to  compliance with the  

prior  State Act,  then the State Act  is  clearly  repugnant to  the  

Central Act, and being a prior statute, must give way either under  

Article 246(1) read with Article 248, or under the proviso to Article  

254(2). He has placed before the decisions in Zaverbhai Amaidas  

vs. State of Bombay18, Deep Chand vs. State of Uttar Pradesh &  

Ors.19, State of Orissa vs. M.A. Tulloch and Co.20, and Thirumuruga  

Kirupananda  Variyar  Thavathiru  Sundara  Swamigal  Medical   

Educational  & Charitable  Trust  vs.  State of  Tamil  Nadu & Ors.  

(supra).  The fifth contention raised by Mr. Singh is that the State  

and/or  the Board cannot purport  to  create a monopoly for  the  

Board and to make the very existence of private security agencies  

dependent upon exemption granted at the whims and fancies of  

the State Government, after the enactment of the Central Act in  

2005 and that there is no enabling power or authority conferred  

by the State Act to do so. The final contention raised by Mr. Singh  

is  that  the  Central  Government,  which  has  enacted  the  later  

Central Statute and is responsible for implementing the same, has  18 [1955] 1  SCR 799 19 AIR 1959 SC 648 20 [1964] 4 SCR 461

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25

filed  a  Counter  Affidavit  in  the  in  C.A.  No.  8670  of  2011  

completely supports the contentions of the appellants. Therefore,  

placing reliance on the decisions of this Court in K.P. Varghese vs.   

Income Tax Officer21 and State of Tamil Nadu vs. Mahi Traders &   

Ors.22, it has been submitted that the statements made  on  oath  

by  the  Central  Government  are  entitled  to  the  highest  weight  

based on the principle of contemporanea expositio.  

25. In light of the above contentions,  Mr. Singh has submitted  

that  through  the  impugned  judgment,  a  monopoly  has  been  

created in favour of respondent No.1,  being the Board, as the  

principal  employer  has  no  freedom  in  choosing  the  security  

agency or the security guards deployed in their establishments.  

Thus,  the  High  Court  overlooked  the  interest  of  the  principal  

employer and private security agencies and that the State Act  

takes away the fundamental right of the private security agencies  

from operating and conducting business conferred by the Central  

Act.  It was also submitted that the Parliament clearly intended its  

legislation to be a complete and an exhaustive Code relating to  

the subject and it is, therefore, deemed that the Central Act has  21(1981) 4 SCC 173 22 (1989) 1 SCC 724

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replaced the Maharashtra Act. It is also submitted that Clauses 8,  

25 and 28 of the Scheme of 2002 are arbitrary and violate the  

appellants’ fundamental rights under Articles 14 and 19(1)(g) of  

the  Constitution  being  an  unreasonable  encroachment  on  the  

right of the appellants to seek deployment of the most suitable  

class or classes of security guards from the Appellants’ viewpoint.  

It is further submitted that the Central Act and the State Act are  

enacted  under  the  same  legislative  entry  of  the  seventh  

Schedule,  substantially  covering  the  same  field  and  as  the  

Parliament sought to cover the same field the State Act, insofar  

as the agency guards are concerned, must give way and after  

2005, the State Act applies only to guards deployed by the Board.

26. It is also the case of Mr. Singh that the Central Act is a  

complete and self-contained code covering the entire business of  

security  services  through  private  security  agencies  throughout  

the length and breadth of India, without exception or limitation;  

furthermore,  the  Central  Act  constitutes  a  comprehensive  

regulatory mechanism headed by a Controlling Authority in each  

State  which  is  in  charge  of  all  matters  pertaining  to  private  

security agencies and private security guards with the State. It

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was also submitted that the prohibition of agencies of middlemen  

by the State Act cannot ban or prohibit a private security agency  

which complies with the requirements of the Central Act and is  

licensed  thereunder,  from functioning  and  supplying  guards  to  

factories or establishments; that even if there is no repugnancy  

then  the  only  way  to  interpret  the  State  Act  and  particularly  

Section 23 thereof,  which will  save the Constitutionality  of  the  

State Act, is to read it down and treat it as a purely regulatory  

provision  for  safeguarding  those  service  conditions  of  private  

security  guards  which  are  not  governed  or  regulated  by  the  

Central Act.

27. Mr. Singh further submitted that the State Act operates  

through  the  Scheme  of  2002  which  expressly  allows  principal  

employers  and  guards  the  free  choice  of  employment  and  

deployment has not been challenged. That this free choice cannot  

be curtailed by relying on an earlier interpretation given by this  

Court in  Security Guards Board for Greater Bombay and Thane   

District vs. Security & Personnel Services Pvt. Ltd. & Ors. (supra).   

28. Mr Singh has also drawn our attention to Clauses 13(1)  

(b), 25(2) and 26(4) of the Scheme of 2002 and submitted that on

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account of  the aforementioned clauses,  a user  or  consumer of  

security services is forced to use the Board and its sub-standard  

guards,  even  if  the  user  is  completely  dissatisfied  with  the  

services provided,  solely on the ground that earlier they were  

registered with the Board that sometime in the past, such user (or  

even some imaginary predecessor of such user or consumer) had  

made the mistake of registering with the Board. Moreover, Clause  

42 creates a penal liability, if any of the clauses of the Scheme of  

2002 is contravened.  

29. Furthermore, it has been submitted that the provisions of  

the Scheme of 2002 and the State Act which enable the Board to  

monopolize the supply of security guards and restricting right of  

choice of  a  private  security  guard  or  a  principal  employer  are  

ultra vires the provisions of the State Act as amended in 1996 and  

of Articles 14 and 19(1) (g). Mr. Singh concluded by contending  

that any interpretation of the State Act which prohibits or restricts  

the  business  of  agencies  will  create  an  irreconcilable  conflict  

between the two Acts, with the Central Act prevailing. In light of  

the same, he submitted that courts should adopt an interpretation

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which sustains the constitutionality of  provisions,  and avoid an  

interpretation which would  bring the  provisions  in  conflict  with  

other laws which might prevail over them.  

30. Mr. Krishnan Venugopal, learned senior counsel appearing  

for  the  State  of  Maharashtra,  while  replying  to  the  alleged  

violation of Articles 14 and 19(1)(g) of the Constitution of India  

and the repugnancy of the State Act to the Central Act, submitted  

that there is a presumption of constitutionality to every statute  

irrespective of it being passed by the Union or a State legislature  

and  an  apprehension  of  abuse  by  a  statutory  authority  is  no  

ground for striking down the same. He further contended that the  

reliance placed by Mr. C.U. Singh, learned senior counsel on the  

counter affidavit of the Central Government is misplaced as once  

a  statute is  passed by a  legislature then only  the Courts  may  

interpret it and determine its  constitutional validity.  In support of  

his  submissions  he  placed  reliance  upon  the  decisions  of  this  

Court in  Sanjeev Coke Manufacturing Company vs. M/s Bharat   

Coking Coal Ltd. & Anr. 23  and NDMC Vs. State of Punjab & Ors.24  

It has been submitted by Mr. Venugopal that right to do business  23 (1983) 1 SCC 147  24  (1997) 7 SCC 339

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is a fundamental right conferred by Article 19(1)(g) and a statute  

cannot be interpreted to confer the same unless it expressly says  

so. In fact the Central Act is a regulatory mechanism restricting  

the right to do business of private security agencies by making  

them subject to certain conditions and does not confer on them  

any right. Furthermore, it has been submitted that the High Court  

in Tradesvel Case (supra) has already held that Section 23 is valid  

and  not  violative  of  the  Constitution.  This  decision  was  also  

upheld by this Court vide Order dated January 1, 1983. It has also  

been submitted that the State Act is a beneficial legislation falling  

under  the  Directive  Principles  of  State  Policy  and  should  be  

upheld as reasonable restriction on the fundamental rights of the  

appellants under Articles 14 and 19. In support of the same he  

placed before us the decisions of this Court in State of Gujarat vs.   

Mirzapur Moti Kureshi Kassab Jamat  & Ors.25 and  Pathumma &  

Ors vs. State of Kerala & Ors26.  

31. Mr. Venugopal has also raised the contention that the State  

Act is not repugnant to the various labour statutes as argued by  

the appellants as the President gave general assent to the Bill of  25  (2005) 8 SCC 534  26  (1978) 2 SCC 1

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the State Act under Article 200 on September 24, 1981. He has  

put forth that it is a well settled position that if Presidential assent  

is given in general terms to a State statute, the State legislation  

will prevail over a Parliamentary law on matters contained in the  

Concurrent List. Mr. Venugopal placed reliance on the decisions of  

this Court in  Rajiv Sarin & Anr. vs. State of Uttarakhand & Ors.27  

and Gram  Panchayat  vs.  Malwinder  Singh  &  Ors28.  He  further  

stated  that  for  the  purposes  of  Article  254(2)  the  Presidential  

Assent  is  effective  to  shield  the  Maharashtra  Act  from  

repugnancy.  

32. On the ground of repugnancy it has been submitted by Mr.  

Venugopal that a State Act is repugnant to a Central Act when  

they are on the same subject and relate to the same entry in the  

Concurrent  List.  The  same  is  determined  by  a  series  of  tests  

including  the  determination  of  the  pith  and  substance  of  the  

statute claimed to be repugnant, considering the “occupied field”.  

Mr.  Venugopal  Drew our  attention to decisions of this Court in  

Rajiv  Sarin  &  Anr.  vs.  State  of  Uttarakhand  &  Ors.  (supra),   

Offshore Holding Pvt. Ltd vs. Bangalore Development Authority &   27  (2011) 8 SCC 708  28  (1985) 3 SCC 661

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Ors.29,  Girnar  Traders  vs.  State  of  Maharashtra  & Ors.30,  Gram  

Panchayat vs. Malwinder Singh & Ors. (supra), State of Gujarat vs.   

Mirzapur  Moti  Kureshi  Kassab  Jamat   &  Ors.  (supra),  State  of  

Rajasthan vs. Vatan Medical & General Store & Ors.31 and State of  

Bihar & Ors. vs.  Shree Baidyanath Ayurved Bhawan (P.) Ltd. &   

Ors32.  He further submitted that it is clear from the statement of  

objects and reasons,  the preamble, the legislative scheme, the  

provisions of the Central   Act,  its  scope and its  nexus with its  

object, that it is in pith and substance a law to regulate private  

security agencies in the interest of national security relatable to  

Entry 97 and it does not provide for the labour welfare of security  

guards. This is juxtaposed to the provisions of the State Act which  

clearly  indicate  that  it  is  a  beneficial  social  welfare  legislation  

relatable to Entry 24 of List III insofar as it provides for regulation  

in  the  interest  of  labour  welfare  of  private  security  guards  in  

notified districts in the State of Maharashtra.  Mr. Venugopal drew  

our attention to the comparative table between the provisions of  

29  (2011) 3 SCC 139  30  (2011) 3 SCC 1  31  (2001) 4 SCC 642  32  (2005) 2 SCC 762

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the  two  statutes  submitted  by  him  during  the  course  of  

proceedings.  

33. It  has  been  further  submitted  by  Mr.  Venugopal  that  an  

incidental  encroachment  by the  State  law on  a  forbidden field  

does not affect the competence of the legislature to enact the law  

as held by this Court in Girnar Traders vs. State of Maharashta &   

Ors.  (supra) and  K.K. Bhaskaran vs. State33; and that  incidental  

encroachments  by  a  State  law  into  the  field  covered  by  the

Central law, are an exception even to the doctrine of occupied  

field. That only if there is direct and irreconcilable inconsistency  

between  the  Central  Act  and  the  State  Act,  the  issue  of  

repugnancy can arise as held by this Court in M. Karunanidhi  vs.   

Union of India & Anr.34 and  Vijay Kumar Sharma & Ors. vs.  State   

of Karnataka & Ors.35.

34. Mr. Venugopal,  in furtherance of his argument on the issue  

of  repugnancy,  stated  that  Section  13(1)(j)  of  the  Central  Act  

which requires that licensed private agencies have to comply with  

the nine Central labour law legislations, does not turn the Central  33  (2011) 3 SCC 793 34  (1979) 3 SCC 431  35  (1990) 2 SCC 562

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Act   into  a  labour  welfare  statute  or  create  an  irreconcilable  

conflict  with  the  State  Act  as  it  is  merely  an  incidental  and  

ancillary provision in the Central Act and does not turn it into a  

labour  welfare  statute.  Similarly,  the  exemption  provision  in  

Section 23 of the State Act does not create a conflict between the  

two Acts it  is purely regulatory in character for the purpose of  

ensuring decent labour conditions and a living wage to private  

security  guards;  and removing  the same would result  in  great  

hardship and exploitation of private security guards. Lastly,  he  

concluded  by  submitting  that  if  different  aspects  of  the  same  

activity are regulated under a Central law and a State law, it will  

not render the State law unconstitutional on the ground of being  

inconsistent with, or repugnant to, the Central law so long as the  

Central law and the State law operate in different fields and are  

relatable to  different  entries in  any of  the lists  in  the Seventh  

Schedule.  In  support  of  this  submission learned senior  counsel  

placed reliance on two earlier judgments, being State of Bihar &  

Ors.  vs.   Shree  Baidyanath  Ayurved  Bhawan  (P.)  Ltd.  &  Ors  

(supra)  and  Vijay Kumar Sharma & Ors. vs. State of Karmataka &  

Ors. (supra).

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35. Mr. Venugopal has countered the claim of the appellants that  

the State cannot create monopoly in it favour on the ground that  

the creation of  a  monopoly  by a  statute including subordinate  

legislation by a competent legislature is  not open to challenge  

under  Art.19(1)(g)  of  the  Constitution  in  view  of  Article  19(6).  

Moreover, the State Act does not create an absolute monopoly in  

favour of the Securities Board in view of the exemption provision  

in Section 23 of the Maharashtra Act for security guards or classes  

of  security  guards  employed  by  private  security  agencies.  He  

strongly relied on the decision of the High Court in the Tradesvel  

Case (supra) pertaining to the State Act wherein the restrictions  

imposed by the said  Act  were held to  be reasonable and also  

submitted the decisions in H. C. Narayanappa & Ors. vs. State of   

Mysore & Ors.36 and  Khoday Distilleries Ltd & Ors. vs. State of   

Karnataka & Ors.37.

36. It is also the case of Mr. Venugopal that from Section 13(1)(j)  

of the Central Act, it is clear that the labour  statutes mentioned  

in the schedule to the Act are not incorporated in the Act. Further,  

neither the issue of both Acts being self-contained codes, nor the  36  AIR 1960 SC 1073 37  (1995) 1 SCC 574

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issue of legislation by incorporation as opposed to legislation by  

reference, is relevant inasmuch as both the Central Act and the  

State Act can co-exist harmoniously without any conflict.  

37. Mr. Venugopal closed his arguments with the contention that  

the State Act has been upheld in numerous challenges over the  

years on various grounds, including many of the grounds urged in  

these civil appeals. In light of the same  he drew our attention to  

the decision of the High Court in the Tradesvel Case (supra) and  

the dismissal of the special leave petition challenging the same,  

the decision of this Court in  Security Guards Board for Greater   

Bombay and Thane District vs. Security & Personnel Services Pvt.   

Ltd. & Ors. (supra), the decision of the High Court in W.P. 1085 of  

2002 wherein the High Court  upheld the Scheme of  2002,  the  

decision  which upheld  the 1996 amendments  to  the State  Act  

being the  Krantikari Suraksha Rakshak Sanghatana vs. State of   

Maharashtra & Ors.  (supra)38,   which was further upheld by this  

Court which held that the State Act and the Scheme constituted a  

complete and self-contained Code in Krantikari Suraksha Rakshak  

Sanghatana vs.  Bharat  Sanchar  Nigam Ltd.  & Ors. (supra)  and  

38 2006 (6) ALL MR 401.

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lastly  the  unchallenged  decision  of  the  High  Court  in  National  

Textile Corporation vs. The Secretary, Security Guards Board for   

Brihan  Mumbai  and  Thane  District  &  Ors. (WP  No.2773/2006  

decided on January 12, 2007) wherein it was held that the Central  

Act regulated the private security agencies so that they do their  

job  within  the  legal  framework  and  are  accountable  to  the  

regulatory mechanism as provided under the Act while the State  

Act is for the regulation of the employment of the Private Security  

Guards employed in the factories and establishment in the State  

of Maharashtra and for making better provisions of their terms  

and  conditions  of  employment  and  welfare  through  the  

establishment of the Security Board.  

38. Mr.  Anand  Grover,  learned  senior  counsel  appeared  on  

behalf of the respondent No. 8,  being one of the Trade Unions  

consisting of private security guards. Mr. Grover in his arguments  

reiterated  the  grounds  raised  by  Mr.  Venugopal  and  further  

contended that the Central Act does not occupy the field of labour  

welfare of security guards, firstly, because Sections 4, 5, 6 & 7 of  

the  Central  Act  do  not  make  compliance  with  labour  welfare  

statues, listed in the Schedule to the Act, a condition for obtaining

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a licence under the Act; secondly, as it is clear from the words of  

Section 13(1)(j)  of  the Central  Act  that  the applicability  of  the  

welfare  Acts  are  at  best  discretionary  and  the  Controlling  

Authority “may” cancel a licence on non compliance of the labour  

welfare Acts; thirdly, the Central Act contains no proactive and  

regular checks on compliance with the Central labour laws. It has  

been further submitted that the main objective of the State Act is  

labour  welfare.  In  light  of  the  same he  drew  our  attention  to  

Sections 19, 20 and 21 of State Act and referred to Section 3 of  

the State Act and the Scheme of 2002. He further argued that the  

State Act proactively monitors the employment conditions of the  

private security guards in spite of being exempted under Section  

23, ensuring their welfare for the exemption to continue and that  

the  State  Act  has  a  proper  mechanism  ensuring  that  welfare  

provisions are complied with.

39.  Mr. Grover heavily relied on the decision of the Supreme  

Court of Canada in Canadian Western Bank vs. Alberta39 wherein  

the Court referred to the  doctrine of co-operative federalism,  to  

support his contention that the Central Act and State Act apply  

39 [2007] Canadian S.C.R. 3

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concurrently as the two Acts do not regulate the same aspects,  

the Central Act ends at licensing and the State Act begins with  

labour welfare.  

40. Mr.  Grover  concluded  his  arguments  with  the  submission  

that the Scheme of 2002 does not violate Articles 14 and 19 of  

the Constitution. He stated that the parties did not bring the same  

challenge before the original court and therefore, cannot raise the  

ground  at  this  stage.  He  also  drew  our  attention  to  specific  

clauses  of  the  Scheme  of  2002  and  stated  that  they  are  not  

unconstitutional.  Firstly,  he  put  forth  the  provisions  in  Clause  

13(1)(b) of the Scheme of 2002 and stated that the conditions  

imposed  by  the  same  are  in  consonance  with  the  State  Act  

enacted to ensure fair conditions of employment and amelioration  

of security guards. Secondly, he stated that Clause 25(2) is not  

arbitrary  and  unreasonable  as  it  ensures  fair  conditions  of  

employment and its restrictions are in consonance with the Act.  

Thirdly, it has been contended that Clause 26(4) is in consonance  

with the Act and the Scheme and that it is an enabling provision  

to  ensure  that  exemption  is  granted  to  security  guards  to  be

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deployed  by the employer agency only at those factories and  

establishments which are registered with the Boards.  

41. Respondent No.9 in the titled appeal (C.A. No. 8814 of 2011)  

being  Maharashtra  Rajya Suraksha Rakshak & General  Kamgar  

Union, a registered Trade Union, also made separate submissions  

through its counsel along with Bhartiya Suraksha Rakshak Union,  

which is also a registered Trade Union of security guards and filed  

an application for impleadment/intervention in the matter which is  

registered  as  I.A.  No.7.  Their  submissions  are  concerning  the  

alleged exploitation  of security guards by the security agencies.  

It  is  their  case  that  security  agencies  in  connivance  with  the  

principal  employers  have  been  making  several  attempts  to  

circumvent  the  welfare  provisions  of  the  State  Act  since  the  

inception of the State law and that the private security agencies  

could  not  have  made  yet  another  attempt  with  the  principal  

employers  to  avoid  the  reasonable  restriction  imposed  against  

them on their right to business in connection with security guards.  

It  has  been  submitted  that  the  State  Act  imposes  reasonable  

restrictions against security agencies and that the Board acts as a  

watchdog ensuring that the exempted guards are availing equally

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or more favourable terms and conditions of employment, which  

has been determined by the mechanism of the Board established  

under the State Act and the agencies undertook at the time of  

seeking exemption.  

42. Both  the  Trade  Unions  being  respondent  No.9  and  the  

impleaded party,   apart from accepting the submissions of Mr.  

Venugopal  and Mr.  Grover,  have sought  that  the  State Act  be  

enforced in toto for the welfare of the private security guards in  

the State of Maharashtra which can only be ensured by the State  

Act which has sufficient proactive measures for the enforcement  

of the labour welfare provisions.

43. Having heard the arguments of all the parties and after  

perusing  the  materials  placed  before  us  during  the  course  of  

hearing, we find that the primary issue in the present matter is  

whether the State Act is repugnant to the Central Act. The learned  

senior  counsels  appearing  for  both  the  parties  submitted  a  

plethora of cases in this regard, however we will limit ourselves  

only to the pertinent cases.

44. Article 246 of the Constitution does not provide for  the  

competence of Parliament or the State Legislatures as commonly

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perceived but merely provides for their respective fields. Article  

246  only  empowers  the  Parliament  to  legislate  on  the  entries  

mentioned in List-I and List-III of the Seventh Schedule and that in  

case of a conflict between a State Law and a Parliamentary Law  

under the entries mentioned in List-III, the Parliamentary law will  

prevail. It does not follow that the Parliament has a blanket power  

to  legislate  on  entries  mentioned  in  List-II  as  well.  Thus,  the  

argument of the appellants that the Parliament has supreme right  

to  legislate  over  any  area  as  per  Article  246(1)  is  misplaced.  

Furthermore,  this  Court  in  Welfare  Association,  A.R.P.,   

Maharashtra & Anr. vs. Ranjit P. Gohil & Ors.40  also held that:   

“The fountain source of legislative power exercised by  Parliament or the State Legislatures is not Schedule 7;  the fountain source is Article 246 and other provisions  of the Constitution. The function of the three lists in the  Seventh  Schedule  is  merely  to  demarcate  legislative  fields between Parliament and States and not to confer  any legislative power.”

45. It has become a well-established principle that there is a  

presumption  towards  the  constitutionality  of  a  statute and the  

courts should proceed to construe a statute with a view to uphold  

40 (2003) 9 SCC 358

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its  constitutionality.  (See:  State  of  Andhra  Pradesh  vs.  K.   

Purushottam Reddy & Ors.41,  State of Gujarat vs. Mirzapur Moti   

Kureshi Kassab Jamat  & Ors. (supra), (paras 20 and 70, State of  

MP vs. Rakesh Kohli & Anr.42)

46. In  light  of  the  above,  we  will  answer  the  question  of  

repugnancy of the State Act with respect to the Central Act. The  

question  of  repugnancy  arises  only  in  connection  with  the  

subjects enumerated in the Concurrent List (List –III),  on which  

both the Union and the State Legislatures have concurrent powers  

to legislate on the same subject i.e. when a Stale Law and Central  

Law  pertain  to  the  same  entry  in  the  Concurrent  List.  Article  

254(1) provides that if a State law relating to a concurrent subject  

is ‘repugnant’ to a Union law then irrespective of the Union law  

being enacted prior to or later in time, the Union law will prevail  

over the State law. Thus, prior to determining whether there is  

any repugnancy or not, it has to be determined that the State Act  

and the Central Act both relate to the same entry in List-III and  

there is a ‘direct’ and irreconcilable’ conflict between the two. i.e.  

both the provisions cannot stand together.  

41 (2003) 9 SCC 564 42 (2012) 6 SCC 312

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47. Article 254 of the Constitution is only applicable when the  

State Law is in its ‘pith and substance’ a law relating to an entry  

of the Concurrent List on which the Parliament has legislated.  It  

has  been  well  established  that  to  determine  the  validity  of  a  

statute  with  reference  to  the  entries  in  the  various  lists,,  it  is  

necessary to examine the pith and substance of the Act and to  

find out if the matter comes within an entry in List-III. The Court  

while  examining  the  pith  and  substance  of  a  statute  must  

examine the whole enactment, its objects, scope and effect of its  

provision. Only if it is found that the two enactments cover the  

same  matter  substantially  and  that  there  is  a  direct  and  

irreconcilable conflict between the two, the issue of repugnancy  

arises.  (See:  State of Gujarat vs.  Mirzapur Moti  Kureshi  Kassab   

Jamat  & Ors. (supra),  Offshore Holding Pvt.  Ltd. vs. Bangalore   

Development Authority & Ors.  (supra),  State of West Bengal vs.   

Kesoram Industries & Ors.43).

48. The Preamble of the Central Act reads as under: “An Act to provide for the regulation of private security  agencies  and  for  matters  connected  therewith  or  incidental thereto.”

43 (2004) 10 SCC 201

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On the other hand the Preamble of the State Act reads as under: “An  Act  for  regulating  the  employment  of  Private  Security  Guards  employed  in  factories  and  establishment  in  the  State  of  Maharashtra  and  for  making better provisions for their terms and conditions  of employment and welfare, through the establishment  of  a  Board  therefore,  and  for  matters  connected  therewith.”

As per this Court’s decision in  In re Special Reference No. 1 of   

200044 every  attempt  should  be  made  to  reconcile  a  conflict  

between  two  statutes  by  harmonious  construction  of  the  

provisions contained in the conflicting statutes. However, in the  

present matter from a bare reading of the above extracts it  is  

evident that the Central Act only regulates the business of private  

security agencies and connected and incidental matters thereto.  

Thus,  Section  13(1)(j)  of  the  Central  Act  which  requires  

compliance with the Central Labour laws  as a condition to ensure  

the validity of the licence obtained under the Act is a provision  

incidental to the purpose of the Act. The statement of object of  

the State Act clearly indicates that the State Act seeks to regulate  

the employment of Private Security Guards employed in factories  

and  establishment  in  the  State  of  Maharashtra  and  seeks  to  

ensure better terms and conditions of employment of such guards  44 (2004) 4 SCC 489

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through the   establishment of a Board.

50.  It is evident from the above that the subject matters of  

the two Acts are substantially different and the  conflict in the  

operation  of   the  two  Acts  is  incidental.  Furthermore,  after  

comparing  the  provisions  of  both  the  Acts,  that  both  the  Acts  

operate  in  different  fields  and  that  there  is  only  incidental  

connection between the two regarding the regulation of private  

security agencies, wherein Section 23 of the State Act  exempts  

private security guards for the operation of business of private  

security agencies after ensuring that such exempted guards enjoy  

benefits, either equal or better than those provided by the State  

Act. Therefore, the High Court has correctly held that:

“25. It is clear that this group of petitions have been  filed after  the enactment  of  the Central  Act  to  claim  that in view of the enactment of the Central Act, the  State Act has lost its efficacy in relation to the security  agencies.  Perusal  of  the  preamble  of  the  State  Act  shows; that the purpose; for which that Act has been  enacted  is  -  regulating  the  employment  of  security  guards employed in factory and establishment in  the  State of Maharashtra and for making better provisions  for  their  terms  and  conditions  of  employment  and  welfare through the establishment of a board there for.  It is thus clear that the State Act is a labour Legislation  enacted  by  the  State  Legislature  for  making  better  provisions for the terms and conditions of employment  of  the  private security  guards and their  welfare.  The

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Legislation, therefore, is referable to Entry 24 in List III  (Concurrent  List)  in  the  Seventh  Schedule  of  the  Constitution of India. The entry reads as under:

“24.  Welfare  of  labour  including  conditions  of  work,   provident  funds,  employers'  liability,  workmen's   compensation,  invalidity  and  old  age  pensions  and   maternity benefits.”  

We have, thus, no doubt, in our mind that the State Act  is a Labour Legislation, which the State Government is  competent to enact because of Entry 24 found in List III  of  Seventh  Schedule  of  Constitution.  So  far  as  the  Central Act is concerned, its preamble shows that the  Act  has  been  enacted  by  the  Parliament  -  for  the  regulation  of  the  Private  Security  Agencies  and  for  matters  connected  therewith  and  incidental  thereto.  The subject matter of the State Act is private security  guards who may be engaged by the principal employer  either  through  the  Board  or  through  the  security  agencies. The subject matter of the Central Legislation  is not the private security guards, but private security  agencies.  Thus,  the  subject  of  two  Legislations  is  different. Perusal of the Central Act shows that it makes  an  endeavour  to  regulate  the  establishment  and  working  of  private  security  agencies.  Section  4  lays  down that no person shall carry on and commence the  business of security agency unless he holds a licence  issued under this Act. Section 5 of the Central Act lays  down  as  to  who  are  eligible  for  licence.  From  the  scheme  of  the  Central  Act,  it  is  thus  clear  that  it  regulates the business of private security agencies by  making it obligatory on them to secure licence under  the Central Act before commencing their business. The  provisions  found  in  the  Central  Act  dealing  with  the  eligibility  of  the security  guards are incidental  to  the  subject  of  legislation  namely  business  of  private  security agency. The condition of service and welfare of  the  security  guards  is  not  the  subject  matter  of  Legislation in the Central Act. In list I or List III of the

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Seventh  Schedule  there  does  not  appear  to  be  any  entry in relation to the regulation of business of security  agency.  Therefore,  the  Central  Legislation  may  be  relatable to residuary Entry 97 In List I. Perusal of the  provisions of the State Act shows that it does not make  any attempt to regulate the business of private security  agency.”

51. The other test to determine the issue of repugnancy is the  

“doctrine of occupied field” which stipulates that even where the  

Central Act is not exhaustive, repugnancy may arise if it occupies  

the  same  field  as  the  State  Act.  The  question  of  repugnancy  

arises only when the law made by the Parliament and the State  

Legislature occupy the same field. (See: Deep Chand vs. State of   

Uttar Pradesh & Ors.  (supra), , Hoechst Pharamaceuticals Ltd &  

Ors. vs. State of Bihar & Ors.  (supra)). Furthermore this Court in  

M. Karunanidhi vs. Union of India & Anr. (supra) held that: “24. It is well settled that the presumption is always in  favour of the constitutionality of a statute and the onus  lies on the person assailing the Act to prove that it  is  unconstitutional. Prima facie, there does not appear to us  to be any inconsistency between the State Act and the  Central  Acts.  Before  any  repugnancy  can  arise,  the  following conditions must be satisfied: 1. That there is a clear and direct inconsistency between  the Central Act and the State Act. 2. That such an inconsistency is absolutely irreconcilable. 3. That the inconsistency between the provisions of the  two Acts is of such a nature as to bring the two Acts into  direct collision with each other and a situation is reached  where it is impossible to obey the one without disobeying

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the other”

The  above  was  also  upheld  by  this  Court  in  the  case  of  

Government  of  Andhra  Pradesh  &  Anr.   vs.  J.B.  Educational   

Society & Anr. (supra).

52. In  the  present  case,  after  perusing  the  two  Acts  in  

entirety,  we  find  that  two  statutes  occupy  different  fields  as  

stated earlier. The Central Act aims to regulate the business of  

private security agencies and Section 13(1)(j) of the Central Act  

which reads as under, does not turn the Central Act into a labour  

welfare statute as the same is an incidental provision. “13.  Cancellation  and  suspension  of  licence.-(1)  The  Controlling  Authority  may  cancel  any  licence  on  any  one or more of the following grounds, namely:-  …. (j) that the licence holder has violated the provisions of  the Acts given in the Schedule which may be modified  by  the  Central  Government,  by  notification  in  the  Official Gazette; …”

 Thus, we accept the arguments of Mr. Venugopal with regard to  

the same. The State Act is in contrast to the Central  Act as it  

contains  express  provisions  pertaining  to  labour  welfare  and  

contains mechanism to ensure that the same are complied with.  

Furthermore, the State Act also imposes penal liability if the said

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provisions are not complied with. The High Court decision in the  

Tradesvel Case (supra), challenge to which was dismissed by this  

Court,  also  held  the  State  Act  to  be  a  welfare  legislation.  

Therefore,  we are of  the opinion that  the two statutes occupy  

distinct fields.   

53. The appellants have also challenged the State Act to be  

violative of Articles 14 and 19 of the Constitution. However, we  

find that the same does not hold good as the restrictions imposed  

by the State Act  are reasonable restrictions  envisioned by the  

Constitution  and  that  they  protect  the  rights  and  ensure  the  

welfare of  private security  guards engaged by private security  

agencies by means of Section 23 and relevant provisions of the  

Scheme of 2002. Furthermore, the High Court in the  Tradesvel  

Case (supra) while answering the same question and considering  

the situation of the private security guards held the State Act is  

not  to  be  in  violation  of  Articles  14  and  19  or  any  other  

Fundamental Rights contained in the Constitution. Therefore, we  

accept the arguments put forth by Mr. Venugopal in this regard.

54. The other  impediment  which tried to  be pointed out  by the  

learned  senior  counsel  appearing  on  behalf  of  the  appellant  in

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respect of Section 23 of the State Act that it compels all the security  

guards  employed  by  the  agencies  and  deployed  with  various  

principal  employers  to  seek  exemption  is  totally  misconceived  

because  it  would  bring  about  total  stoppage  of  the  agency’s  

business. After analyzing Section 23 of the said Act, it appears to us  

that  exemption  can  be granted to  a  class  or  classes  of  Security  

Guards,  employed  by  agencies  and  deployed  with  the  principal  

employer and who are in the enjoyment of benefits which are on the  

whole not less favourable to such security Guards than the benefits  

provided for or under this Act or any Scheme made thereunder. We  

have noticed that the High Court has duly taken care of that and  

considered the said scheme and pointed out that to seek the benefit  

of  exemption  under  Section  23,  three  conditions  are  necessary.  

Firstly, the class or classes of Security Guards should be employed  

by the agency or agent. Secondly, those Guards must be deployed  

by the concerned agency in a factory or establishment or in any  

class or  classes of  factories or  establishments  and thirdly,  in  the  

opinion of the State Government, all such Security Guards or such  

class or classes of Security Guards at the time of seeking exemption  

are in the enjoyment of benefits which are on the whole not less

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favourable to such Security Guards than the benefits provided by or  

under this Act or any Scheme made thereunder. Now, since after the  

enactment of the State Act, the principal employer was prohibited  

from taking  private  Security  Guards  from Security  Agencies,  the  

exemption could be asked only in respect of private Security Guards  

who satisfied the aforementioned three conditions. Thus, it was only  

a  one  time  exercise  for  seeking  exemption  for  private  Security  

Guards who were employed by the agency and deployed by that  

agency in factory or establishment. That exercise could be repeated  

as and when the provisions of the Security Guards Act are made  

applicable  to  different  areas  of  the  State  on  different  dates  as  

provided under Sub-section (3) of Section 1 of the Security Guards  

Act.  

55. The  discussion  which  we  have  in  the  preceding  

paragraphs are reasons to come to the conclusion, and we hold  

that  there  is  no  repugnancy  between  the  State  Act  and  the  

Central Act in the given facts. We have also found that the Central  

Act does not occupy the field of labour welfare and thereby there  

cannot be any conflict between the State Act and the Central Act.

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The question of applicability of the Central Act and the State Act,  

in our opinion, apply concurrently and we accept the submission  

of  Mr.  Grover  to  that  extent  relying  upon  the  decisions  cited  

before  us  (See:  Vijay  Kumar  Sharma  &  Ors.  vs.   State  of   

Karnataka  &  Ors. (supra),  State  of  Uttar  Pradesh  &  Anr.  vs.   

Synthetics and Chemicals Ltd. & Anr.45] and State of Bihar & Ors.   

vs.  Shree Baidyanath Ayurved Bhawan (P.)  Ltd.  & Ors.  (supra).  

Furthermore,  we  have  also  noticed  that  the  State  Act  duly  

received the assent of the President. We have further noticed that  

Clause  28(1)  of  the  Scheme  of  2002  provides  that  every  

registered principal employer may either engage a security guard  

registered with the Board or private employer agency or directly  

and the said clause is nothing but declaratory of the object of the  

Act  and the Scheme.  Therefore,  it  cannot  stand in  the way of  

performing the business by the private security agencies.

56. For the reasons stated hereinabove, we do not find any  

merit  in  these  appeals.  Hence,  the  appeals  are  dismissed.  45 (1991) 4 SCC 139

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Consequently,  the  contempt  petitions  are  also  disposed  of  

accordingly. There will be no order as to costs.

                                                                    ………………………….J.                                                                      (Gyan Sudha Misra)

New Delhi;                                                    …………………………J. April  25, 2014.                                            (Pinaki Chandra  Ghose)