"Ex-Army Officer’s Security Firm Loses Government Approval: A Legal Battle Explained"

 


Introduction

This case revolves around Lt. Col. Ishrat Nabi (Retd.), a former military officer and proprietor of M/s 3900 Nabi Ishrat Security Agency (NISA), who challenged his security agency's disempanelment by the Directorate General Resettlement (DGR). The dispute highlights issues concerning the employment and business activities of ex-service personnel under government regulations.

Background of the Case

Lt. Col. Ishrat Nabi, after retiring from the military, established a security agency, NISA, which was empanelled with the DGR under the Ministry of Defence. The DGR facilitates employment opportunities for ex-servicemen by sponsoring security agencies owned by them for government and public sector contracts.

The conflict arose when DGR disempanelled NISA, citing violations of the employment and entrepreneurship conditions under the Office Memorandum (OM) dated 09-07-2012. The primary allegation was that Lt. Col. Nabi was involved with another security firm, SAM Security and Manpower Services Pvt. Ltd. (SAM Security), alongside NISA, which was against the prescribed norms.

The Allegations and Disempanelment

The DGR's decision to disempanel NISA was based on the following allegations:

  1. Dual Involvement in Security Agencies – Lt. Col. Nabi was a director of SAM Security, a private security agency, while NISA was already empanelled with DGR.
  2. Violation of Clause 5(e) of OM (2012) – This clause prohibits ex-servicemen from availing multiple employment or entrepreneurship benefits from the DGR. It also requires them to resign from any private employment before taking up a DGR-sponsored contract.
  3. Non-disclosure of Private Business Interests – The authorities found that Lt. Col. Nabi's association with SAM Security was not properly disclosed.
  4. Financial Irregularities – The authorities scrutinized his financial records, revealing income from private sector engagements, which further strengthened the case for disempanelment.

The Petitioner's Defense

Lt. Col. Nabi challenged his agency’s disempanelment, arguing:

  • Resignation from SAM Security – He claimed to have resigned as Managing Director of SAM Security on 01-07-2017, before his first DGR-sponsored contract commenced.
  • Lack of Financial Benefit from SAM Security – He asserted that he had not received any salary or remuneration from SAM Security, thus there was no conflict of interest.
  • PSARA License Issue – His Private Security Agency Regulation Act (PSARA) license was renewed for SAM Security on 26-07-2017, which, according to him, was a procedural matter unrelated to his active involvement.

Court’s Analysis and Verdict

The Patna High Court, after reviewing the case, upheld the disempanelment of NISA, citing:

  1. Failure to Provide Necessary Undertakings – As per OM 5(e), Lt. Col. Nabi was required to submit an undertaking declaring his resignation from any private employment before taking up a DGR-sponsored contract. No such record was found.
  2. Contradictions in Resignation Claims – The petitioner claimed resignation from SAM Security in July 2017, yet official records continued to list him as an advisor to the company in 2019.
  3. Conflict of Interest and Rule Violation – The court found substantial evidence that Lt. Col. Nabi continued to have ties with SAM Security while benefiting from NISA's empanelment.

Ultimately, the court dismissed his petition, ruling that the DGR's decision to disempanel NISA was justified and legally sound.

Conclusion

This case underscores the strict regulatory framework governing ex-servicemen's employment opportunities in India. The ruling highlights the necessity for clear separation between private employment and DGR-sponsored contracts to maintain fairness in re-employment policies for retired military personnel.

Read the full judgement Below;

https://patnahighcourt.gov.in/viewjudgment/MTUjMzY2NiMyMDIxIzEjTg==-SQfTqTPIv0Q=