Supreme Court Upholds Aadhaar; Says Private Entities, Including Banks, Mobile Operators Cannot Demand Aadhaar

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The five-judge Constitution Bench of the Supreme Court on Wednesday said that private entities, like telecom companies, banks and payment service providers cannot demand Aadhaar data from their customer. In a majority verdict, the apex court, however, held validity of Aadhaar for welfare schemes and linking with permanent account number (PAN) while filing Income Tax (I-T) returns.

The Bench of Chief Justice Dipak Misra, Justice AK Sikri, Justice AM Khanwilkar, Justice DY Chandrachud and Justice Ashok Bhushan delivered their judgement on the much awaited issue of Aadhaar. Upholding Section 139AA of Income-Tax Act, the Bench said, it is mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form, for filing of I-T returns and for making an application for allotment of a PAN number.

The Bench also said Aadhaar cannot be mandated for opening of bank accounts or for mobile connections and the notification issued by department of telecom (DoT) for making Aadhaar linking to mobile phones mandatory is unconstitutional.

Terming school admissions as not a benefit under Section 7 of the Aadhaar Act, the SC said it cannot be mandated for the same. "Benefits and services under Section 7 should be of the nature of welfare schemes targeted at a particular deprived community," it added.

In addition, CBSE (Central Board of Secondary Education), UGC (University Grants Commission) and NEET (National Eligibility cum Entrant Test) cannot make Aadhaar mandatory, the apex court ruled.

The Bench also stuck down Sections 33(2) and 57 of the Aadhaar(Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016.

The judgement has struck down Section 47 of the Act, which stated that criminal complaints for data breach can be filed only by UIDAI (Unique Identification Authority of India). The exclusion of individuals from filing complaints was held to be arbitrary.

Section 33(2) permits disclosure of information under Aadhaar Act, including identity and authentication information, made in the interest of national security in pursuance of a direction of an officer not below the rank of joint secretary to the Government of India specially authorised in this behalf by an order of the Central government.

Section 57 of the Act permits private entities to use Aadhaar information to authenticate identity of the person.

The judgement of Justice Sikri has read down Section 33(1) of the Act, which enables disclosure of Aadhaar information on the orders of district judge, to state that the owner of information should be given opportunity of hearing before issuing such orders.

Justice AK Sikri has authored judgement on behalf of himself and CJI Dipak Misra and Justice AM Khanwilkar.

The marathon Aadhaar hearings, the second longest in the history of the Supreme Court, after the Kesavananda Bharati case, according to Attorney General K Venugopal, concluded on 10 May 2018.

Over 38 days, the finest lawyers of India have argued for and against the way Aadhaar is being implemented by the Narendra Modi government that tramples on the privacy and security of 12.5 billion people of India.

This was also the first time ever that the hearings have been shared with the public, through live tweets giving argument-by-argument account on Twitter by three accounts.