(Story corrects to fix spelling in paragraph 10 to Jagdish not Jagdeep)

FILE PHOTO: Television journalists are seen outside the premises of the Supreme Court in New Delhi, India August 22, 2017. REUTERS/Adnan Abidi

NEW DELHI/MUMBAI (Reuters) - India’s top court unanimously ruled on Thursday that individual privacy is a fundamental right, a verdict that will impact everything from the way companies handle personal data to the roll-out of the world’s largest biometric ID card program.

A nine-member bench of India’s Supreme Court announced the ruling in a major setback for the Narendra Modi-led government, which argued that privacy was not a fundamental right protected by the constitution.

The court ordered that two earlier rulings by large benches that said privacy was not fundamental in 1954 and 1962 now stood overruled, and it declared privacy was “an intrinsic part of the right to life and liberty” and “part of the freedoms guaranteed” by the constitution.

“This is a blow to the government because the government had argued that people don’t have a right to privacy,” said Prashant Bhushan, a senior lawyer involved in the case.

Constitutional experts believe the judgment has a bearing on broader civil rights, and a law that criminalizes homosexuality. Lawyers say the judgment will also have an impact on a ban on the consumption of beef in many states and alcohol in some states.

In his personal conclusion, Justice Sanjay Kishan Kaul wrote privacy is a fundamental right and it protects the inner sphere of an individual from interference from both state and non-state actors and lets individuals make autonomous life choices.

“The privacy of the home must protect the family, marriage, procreation and sexual orientation,” Kaul wrote.

The ruling is the second landmark decision to come from the Supreme Court this week.

On Tuesday it ruled that a law allowing Muslim men to divorce their wives instantly by uttering the word “talaq” three times was unconstitutional, in a major victory for Muslim women who have spent decades arguing it violated their right to equality.

AADHAAR SETBACK

The privacy judgment was delivered at the end of the tenure of the chief justice of India, Jagdish Singh Khehar, who retires in a few days.

It comes against the backdrop of a large multi-party case against the mandatory use of national identity cards, known as Aadhaar, as an infringement of privacy. There have also been concerns over data breaches.

India’s Law Minister, Ravi Shankar Prasad, said the ruling was an affirmation of the government’s stand that privacy was a fundamental right, but subject to reasonable restrictions. He said it was not a setback to the government’s plans for Aadhaar, and noted that the court is separately looking into the legality of the Aadhaar Act.

Critics say the ID card links enough data to create a full profile of a person’s spending habits, their friends, property they own and a trove of other information.

Aadhaar, which over one billion Indians have already signed up for, was set up to be a secure form of digital identification for citizens, one that they could use for government services.

But as it was rolled out, concerns arose about privacy, data security and recourse for citizens in the face of data leaks and other issues.

Over time, Aadhaar has been made mandatory for the filing of tax returns and operating bank accounts. Companies have also pushed to gain access to Aadhaar details of customers.

Those opposed to the growing demand for Aadhaar data cheered the ruling.

“Truly a victorious week for India - upholding liberty, dignity and freedom for all,” Jyotiraditya Scindia, a member of parliament from the opposition Congress party, said in a tweet.

Bhushan, the senior lawyer involved in the case, said while government demands for the use of Aadhaar for tax purposes could be considered reasonable, any demands for the use of Aadhaar for travel bookings and other purchases could now be questioned in the face of the ruling.

“The fact that there was no dissent is an important thing,” said Raman Chima, policy director at Access Now, which defends digital rights. “They made it clear that the government has to protect privacy.”