Supreme Court Upholds Constitutional Validity Of Aadhaar With Riders
Aadhaar can’t be mandatory for opening bank accounts or mobile phone connections, or for school admissions, rules Supreme Court.
KEY HIGHLIGHTS
Justice Chandrachud Highlights Several Flaws In Aadhaar Programme
Mandatory Linking Of Bank Accounts With Aadhaar Quashed
Aadhaar Not Mandatory To Purchase SIM Card, Says Supreme Court
Supreme Court Strikes Down Part Of Section 57 As Unconstitutional
Justice Sikri Pronounces Judgment In Favour Of Aadhaar Programme
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.
Mandatory Linking Of Bank Accounts With Aadhaar Quashed
The mandatory linking of bank accounts with Aadhaar has also been quashed, Justice Sikri said in his order.
Aadhaar Not Mandatory To Purchase SIM Card, Says Supreme Court
The DoT notification of linking SIM cards with Aadhaar has been held unconstitutional, Justice Sikri said as a part of the majority judgment.
Aadhaar Can Be Passed As Money Bill, Says Justice Sikri
The apex court has held that the Aadhaar Act could be passed as a money bill.
Petitioners had argued that provisions of the Aadhaar Act which do not fulfill the criteria of a money bill cannot be removed once the bill has been passed. Hence, the entire law needs to be struck down.
Aadhaar Cannot Be Mandatory For Education, Says Justice Sikri
Educational boards such as CBSE and UGC who have made the need for Aadhaar mandatory, cannot do so, Justice Sikri said.
- For enrollment of children in Aadhaar it would be essential to have consent of parents. While attaining age of 18, they will be given of choice to exit.
- As far as admission into school is concerned, requirement of Aadhaar is not mandatory.
Supreme Court Strikes Down Part Of Section 57 As Unconstitutional
The portion of Section 57 that enables corporates to seek Aadhaar for authentication is held to be unconstitutional, Justice Sikri said in his majority judgment.
Section 57: Act not to prevent use of Aadhaar number for other purposes under law. “Nothing contained in this Act shall prevent the use of Aadhaar number for establishing the identity of an individual for any purpose, whether by the State or any body corporate or person, pursuant to any law, for the time being in force, or any contract to this effect:…”
Justice Sikri, As Part Of Majority Order, Directs That:
- Authentication records are not to be kept beyond period of six months.
- Meta data relating to transactions is held to be impermissible.There cannot be any kind of meta data.
- Section 33(2) struck down.
- Section 33(1) also read down.
Note: Section 33(2) provided for national security exception. Allowed disclosure of information in interest of national security.
Note: Section 33(1) says the person whose data is sought to be released will be given an opportunity of hearing before an order of information disclosure is passed.
Justice Sikri Pronounces Judgment In Favour Of Aadhaar Programme
Justice Sikri read out the majority judgment today, in favour of the Aadhaar programme. Chief Justice Misra and Justice Khanwilkar concurred with his view. Aadhaar will empower the marginalised sections of the society, giving them an identity, he said.
Here are the key highlights.
- It is better to be unique than the best because being the best makes you number one but being unique makes you one. Uniqueness is the feature of Aadhaar.
- Architecture of Aadhaar reveals that UIDAI is a statutory body.
- Aadhaar number given to a particular person is unique and cannot be given to anyone else.
- Attack of petitioners is founded on the argument that it (Aadhaar) is a grave risk to the rights of the citizens of the country. They contend it makes the state capable of becoming a surveillance state.
- The respondents argue that minimal biometric information is obtained.
- Respondents argue that no data is collected on basis of caste, creed, religion, medical history etc.
- Aadhaar to empower marginalised sections of society. It gives them an identity.
- Aadhaar prevents duplication of data and the enrollment is foolproof.
- Court has adopted a just, fair and reasonable standard to test Aadhaar on principle of Fundamental Right of privacy.
- Respondents rightly pointed out there are sufficient safeguards in authentication process.
Court has come to conclusion that minimal demographic and biometric data is collected.Justice Sikri
Everything You Need To Know
A constitution bench of the Supreme Court will on Sept. 26 rule on the validity of the Aadhaar, the world’s largest biometric identification database, and if the government can make the 12-digit unique ID compulsory for citizens to avail everything from phone connections to welfare benefits.
Petitioners have, among others, challenged three key aspects: collection of biometric data of citizens prior to 2016 without any statutory backing, mandatory use of Aadhaar as an identity proof to avail public services and passage of the Aadhaar Act in 2016 as a money bill that doesn’t require the assent of Rajya Sabha.
The apex court bench, headed by Chief Justice of India Dipak Misra and comprising Justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan, had reserved its judgment on May 10 after a hearing that lasted 38 days with India’s top lawyers arguing for the petitioners. Kapil Sibal, P Chidambaram, Rakesh Dwivedi, Shyam Divan and Arvind Datar highlighted concerns about everything from possible citizen profiling and state control to denial of public services and hasty passage of the law.
Multiple reports of unauthorised people having access to Aadhaar data had triggered privacy concerns. Moreover, the petitioners also highlighted that how the top court had ruled privacy to be a fundamental right.
The government and the Aadhaar-issuing body UIDAI argued that unique ID helped in preventing subsidy leakages. They also countered the reports of Aadhaar data leakages, saying that there has not been a single data breach from the Aadhaar database.
Here are the key arguments made by the government and petitioners:
Government
- The right to privacy is not absolute. There can be instances when this right can be curtailed and the Aadhaar programme is one such instance.
- The Aadhaar programme satisfies the three conditions when right to privacy can be curtailed as laid down by the nine-judge bench. These include existence of a law, compelling state interest/larger public interest and test of proportionality.
- There must be a balance between protecting right to privacy and ensuring right to a dignified life for all the citizens.
- The Aadhaar programme ensures the right to dignified life for citizens by plugging leakages in distribution of subsidies.
- Each of the subsidies provided under the Aadhaar Act is traceable to Article 21, ensuring a right to a dignified life and therefore it is a constitutionally valid scheme.
- Aadhaar does not violate the fundamental right to privacy, the Attorney General of India argued.
- Data collected as part of the scheme is minimum.
- If the top court feels any data should not have been taken, the government will delete that data and stop using it in the Aadhaar programme.
Petitioners
- The state is constitutionally bound to provide subsidies, benefits and services to its citizens.
- Aadhaar makes the delivery of these conditional on citizens parting with their biometric and demographic information. The petitioners challenged Section 7 of the Aadhaar Act on this ground which empowers the government to seek Aadhaar as a means of identity for delivery of subsidies.
- The UIDAI has the power to cancel the Aadhaar number anytime with the citizen having almost no redressal mechanism. That deprives him of services for which he or she would need an Aadhaar number.
- Section 57 of the Aadhaar Act gives the government and private companies the authority to seek Aadhaar for “establishing the identity of an individual for any purpose”. That makes it capable of turning into a tool for a surveillance state.
- There is no concept of consent in the Aadhaar Act and it is only “illusory” as without Aadhaar authentication a person will be denied benefits, services and subsidies.
- Aadhaar fundamentally violates the balance between the citizen and the state.
- The Supreme Court judgment in Section 139AA of Income Tax Act, which mandates linking of Aadhaar to the Permanent Account Number, needs to be re-looked after the Right to Privacy verdict.
- There are strict criteria of what will qualify as a money bill, which bypasses the scrutiny of the Rajya Sabha as well as takes away the power of the President to send the bill back to Parliament for reconsideration.
- Provisions of the Aadhaar Act which do not fulfil the criteria of a money bill cannot be removed once the bill has been passed. Hence, the entire law needs to be struck down.
Aadhaar Verdict: A Timeline
Advocate Apar Gupta, who has worked with the team that has challenged Aadhaar on several grounds, has shared a timeline of developments around the biometric identification system.
Some tweets on the Aadhaar case. A short timeline. For the substantive issues that will be adjudicated by the Supreme Court please refer to the opening statement of Shyam Divan, Sr. Advocate and the closing statement of C.U. Singh, Sr. Advocate. Filter for bias. 1/10
— Apar Gupta (@apargupta84) September 25, 2018
How It Began
On 28.01.2009 a central government notification is issued establishing the Unique Identification Database. It states that the UID authority will, âown and operate the UID Databaseâ. 2/n
— Apar Gupta (@apargupta84) September 25, 2018
On 03.12.2010 a bill titled as the National Identification Authority of India Bill, 2010 is introduced in Parliament. Per PRS analysis, âdoes not prevent any service provider from prescribing Aadhaar as a mandatory requirementâ. The bill is referred to a standing committee. 3/n
— Apar Gupta (@apargupta84) September 25, 2018
On 13.12.2010 the Standing committee on Finance issues its report on the National ID Bill. Calls it, âconceptualised with no clarity of purposeâ, âoverbearing manner without regard to legalities and other social harmâ. 4/n
— Apar Gupta (@apargupta84) September 25, 2018
Voices Raised
On 18.10.2012 Justice Puttaswamy files a petition in the Supreme Court with his principal prayer alleging that the Notification dated 28.01.2009 cannot indirectly implement Aadhaar without the legislative passage of the National ID Bill. 5/10
— Apar Gupta (@apargupta84) September 25, 2018
Other petitioners and intervenors also join in. On 28.02.2013 after service is complete the SC issues notice stating that, âno person should suffer for not getting the Aadhaar cardâ. Anil Divan, Sr. Advocate appears for the petitioners in a bench headed by Justice Chauhan. 6/n
— Apar Gupta (@apargupta84) September 25, 2018
Multiple state governments & statutory authorities approach a constitutional bench seeking a âclarificationâ of the Aug. 11, 2015 order to use Aadhaar. They fail in their attempt but on 15.10.2015 the CJI enlarges the scope to six schemes. Restates Aadhaar is voluntary. 8/n
— Apar Gupta (@apargupta84) September 25, 2018
The Wait
For close to two years as the right to privacy is not determined (which would require a high numerical strength of judges) the Aadhaar case is not taken for final hearing. In the meantime there is frantic activity in the union executive and even in parliment. 9/n
— Apar Gupta (@apargupta84) September 25, 2018
Most pertinently, on March 3, 2016 the National ID Bill is withdrawn and the Aadhaar Act, 2016 as a money bill. It passes through in the session despite protests as recorded in the Lok Sabha on its certification as well as reccomendations for amendment by the Rajya Sabha. 10/n
— Apar Gupta (@apargupta84) September 25, 2018
More and more services are linked with Aadhaar. One which is passed by the Finance Act, 2017 is Section 139AA of the Income Tax Act which makes Aadhaar linking madatory for PAN and Income Tax filings. Binoy Viswam challenges it in the SC. 11/n
— Apar Gupta (@apargupta84) September 25, 2018
Since privacy is presumed to be in dispute, the SC offers a choice to the Petitioners to proceed for final arguments in 139AA challenge without reference to Article 21 arguments. They proceed. On 09.06.2017 they get a judgement does not do much but warms up the prize fight. 12/n
— Apar Gupta (@apargupta84) September 25, 2018
The Breakthrough
In the meantime lawyers keep mentioning, again and again before the Chief Justice to set up a bench to determine and settle the question on the fundamental right to privacy. They also argue on interim relief. Finally happens after more than 15 attempts (per my rough count). 13/n
— Apar Gupta (@apargupta84) September 25, 2018
On July 18, 2017 the CJI agrees to set up a 9 judge bench to settle the question on the fundamental right to privacy with a hearing that begins the next day. We finally get a judgement on August 24, 2017 that unanimously reaffirms the status of privacy as fundamental right. 14/n
— Apar Gupta (@apargupta84) September 25, 2018
The Finale
It again takes some effort, fresh petitions on interim relief and linking of services. Final arguments in the Aadhaar case finally proceed on Jan. 17, 2018. As we await the judgement tomorrow, let us read it with care & recognise the expanse of the issues litigated. 15/15
— Apar Gupta (@apargupta84) September 25, 2018
Essential documents to read:
— Apar Gupta (@apargupta84) September 25, 2018
1. Shyam Divan's opening statement : https://t.co/9bIRIRSvmR
2. CU Singh's closing summary: https://t.co/P8mDZqppuS
There are many more brilliant notes of senior advocates in this case, but these are excellent short primers on the entire case.