Uses of Java Security Manager

I was reading some article on Java Security, and came across uses of java.policy files for granting permission to the source code coming from different code sources.

My question is, do we still use the Policy files for granting permissions to the source code?

Or use Java Security manager for restricting the code from accessing certain resources?

I do not see uses of java -Djava.security.Manager anywhere in even my App-server (JBoss) start up script.

Yes, java still uses the java security manager for controlling access. However, most application servers, including JBoss and Tomcat, don't enable support for it out of the box. JBoss has a standard configuration that allows you to enable the security manager.