Supreme Court Upholds Constitutional Validity Of Aadhaar With Riders
SC Judgment: Key Highlights
Read the majority opinion by Justice AK Sikri, Justice AM Khanwilkar and Chief Justice Dipak Misra here.
Read Justice Ashok Bhushan’s judgment here.
Read Justice DY Chandrachud’s dissenting view here.
Impact On Fintech Industry
Justice Sikri in his majority judgment had held that allowing corporates to seek Aadhaar for authentication is unconstitutional. The apex court’s verdict will push up costs for the fintech industry, Rajiv Raj, the co-founder of credit-scoring platform CreditVidya told BloombergQuint.
You cannot be a complete fintech as now it will be more physical and paper-based verification since you can’t authenticate them digitally. A lot of lending platforms will get impacted because the cost is going to go through the roof, and it will be difficult to onboard new customers. You can’t afford Rs 200-500 verification cost for a loan of Rs 20,000.Rajiv Raj, Co-Founder, CreditVidya
Here's How The Supreme Court's Aadhaar Judgment Will Affect You
Aadhaar will continue to be mandatory for the distribution of state-sponsored welfare schemes including direct benefit transfers and the public distribution system. Taxpayers will have to link their Permanent Account Numbers to the biometric database.
However, the unique 12-digit identification number will not be mandatory for opening bank accounts, mobile-phone connections or for admissions into educational institutions, Justice AK Sikri told the courtroom.
Watch The Discussion With Aryama Sundaram, Siddharth Luthra, And Vrinda Bhandari
Aryama Sundaram, Senior Advocate
The Supreme Court's verdict today comes as a mixed bad for the government, he said.
"For one thing, it has succeeded in the constitutionality of the Act being passed as a money bill. Secondly it has succeeded so far in having the Act substantially upheld," he told BloombergQuiint. "On the other hand what would come at a blow to the government, is the part where bank accounts are not mandatory to be linked."
However, with Aadhaar still mandatory for welfare schemes, driving licences and PAN, the state will have data of a vast majority of the country, he added.
Overall, the government should be fairly happy because so far as the state is concerned, they kept the identification feature of most citizens of India.Aryama Sundaram, Senior Advocate
Prashant Bhushan, Senior Advocate
Bhushan welcomed the Supreme Court’s order, saying that it will provide relief to people who were being forced to part with their data for services provided by private players.
All in all, this is a historic judgement which will provide relief to the common man.Prashant Bhushan, Senior Advocate
Alok Prasanna Kumar, Vidhi Centre For Legal Policy
Today's judgement will make both the sides unhappy, he said.
One problem is that the court upheld Aadhar-PAN card linking and not for bank account. This won’t stop the government from saying PAN is mandatory to open all accounts and insurance accounts. There is no principle distinction between the two. Maybe it is clarified in the judgement.Alok Prasanna Kumar, Vidhi Centre For Legal Policy
Sidharth Luthra, Senior Advocate
The court’s effort to balance the judgement between individual rights and the government's requirement to add to welfare programs makes it a landmark judgment, he said.
While upholding Aadhaar in principle, the court has come back to the principle that Aadhaar should be meant for giving benefits to the common man. The second part is to ensure that Aadhaar should not be commercially exploited and not become a vehicle for greater governmental control. It is a balancing act.Sidharth Luthra, Senior Advocate
The fifth judge, Justice Ashok Bhushan, has also concurred with the Majority judgment in the Aadhaar verdict.
Justice Chandrachud Highlights Several Flaws In Aadhaar Programme
- Society is witnessing shift to a knowledge economy.
- Case is as much about rule of law as about institutional governance.
- Decision of Lok Sabha speaker certifying a bill as money bill can be judicially reviewed.
- Aadhaar Act cannot be regarded as money bill.
- Superseding the authority of Rajya Sabha constitutes as a fraud on the Constitution.
- Aadhaar Act is liable to be declared as unconstitutional.
- Regulations under Aadhaar Act do not provide robust mechanism for informed consent.
- There is no clarity on how an individual is supposed to update his biometric information in case of a mismatch.
- Aadhaar programme violates norms of informational privacy and data protection.
- Aadhaar project has failed to account for flaws which has led to exclusion of eligible beneficiaries.
- Respondents (Government, UIDAI) failed to satisfy test of necessity and proportionality.
- UIDAI does not face any institutional accountability or responsibility to ensure whether data entered in CIDR is authentic.
- Aadhaar Act is also silent on their liability.
Dignity of individuals cannot be made subject to algorithms.Justice DY Chandrachud
Chief Justice of India Dipak Misra and Justices Justices AK Sikri, AM Khanwilkar earlier upheld the Aadhaar Act as constitutional, in their judgment.
Justice Chandrachud On Section 57 And Section 7:
- Section 57 violates Articles 14 and 21 of Constitution.
- Section 7 enables the government to regulate its every interaction with the citizens. It suffers from “overbearing” nature.
- Section 7 is arbitrary and violative of Articles 14 and 21.
Data collected by telecom companies through Aadhaar linkage should be deleted, says Justice Chandrachud in his dissenting judgment.