Aadhar Verdict

aadhar verdict
aadhar verdict
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Aadhar Verdict

Today Supreme court pronounced a much-awaited verdict on AADHAR. Whether the Aadhar Scheme is constitutionally valid or not and does it infringe the fundamental right to privacy.

The landmark judgment was delivered by a five-judge bench of Chief Justice Dipak Misra and Justice AK Sikri, Justice AM Khanwilkar, Justice DY Chandrachud, and Justice Ashok Bhushan.

Verdict – Aadhar Scheme is constitutionally valid though some of the provisions were struck down as that could infringe the fundamental right to privacy.

  • Most of the provisions of the Aadhaar Act were upheld.
  • Supreme Court also accepted that Aadhar enrollment (UIDAI) collects minimal demographic and biometric data of citizens. Aadhaar is a unique 12 digit alphanumeric identification number given to only residents of India. Adequate protective measures have been taken so that there is no chance for any duplication or assimilation of personal information of any resident.
  • Some of the provisions of section 33(2), 47 & 57 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016 were revoked.
  • The government should take adequate measures that illegal immigrants are not granted UIN(Aadhar) and they do not avail the benefits of social welfare schemes.
Section 33(2) has been revoked

The Supreme Court said the Aadhar has personal information of an individual and the individual in no case shall be forced to disclose or authenticate any information of personal identity including biometrics of Aadhar.

Earlier as per section 33(2) of the Aadhar Act, if it is in the interest of national security and after seeking approval from anyone equivalent to the rank of Joint Secretary to the Government of India, Individuals were required to disclose the information pertaining to identity with security agencies.

Section 47 has been revoked

The Supreme Court has revoked section 47 to also allow Individuals to file a complaint in case of breach of Aadhar Data or theft of Aadhaar data.

Earlier as per section 47 of the Aadhar Act, it gave the right only to UIDAI(Government) to register criminal complaints about the theft of Aadhar data or breach of Aadhar Data. Individuals had no right to file a complaint about the same.

Section 57 has been partially revoked

The Supreme Court has partially revoked section 57, Individuals will not be required to mandatorily share Aadhar data, biometric data or authenticate with private entities for availing non-essential services. Private Entities (like Banks, Telecom Companies, e-commerce firms, Schools, Other corporates,) will no longer be able to mandate Aadhaar. Aadhar was made mandatory for KYC processes of banks will no longer be valid. Accordingly, RBI will need to withdraw its notification mandating the same.

  • Aadhar is not required for admissions in school nor can the administration make it a mandatory requirement.
  • Aadhar won’t be mandatorily needed for the issue of new sim cards or for availing services of the telecom sector.
  • No Banks can ask for Aadhar as a mandatory KYC requirement etc.
  • Aadhar will not be required for exams like CBSE or NEET etc.
Partial Section 57 which is not revoked

Even for the Government authorities, use of Aadhaar will be limited to only those purposes which are backed by law. And so, if there is no law, Aadhaar cannot be made mandatory and if there is a law, it can be challenged as well.

Earlier as per section 57 of the Aadhar Act, Aadhar was made allowed (but which was made mandatory by service providers) to be used as a tool of identity verification for any purpose by Government or Private entities.

Sec 57 form the bare act has been reproduced below

“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: Provided that the use of Aadhaar number under this section shall be subject to the procedure and obligations under section 8 and Chapter VI.” 

Where Aadhar linking is mandatory?

Aadhar mandatory for availing benefits from Government

As a result, the use of Aadhaar will continue to remain mandatory for the Public Distribution System, scholarships, mid-day meals, LPG subsidies, and other schemes. Generally, these schemes are availed and enjoyed by a large section of society and they will continue to use the unique ID to avail of the benefits.

Aadhar required for PAN and Tax Filing

Aadhar will continue to be a mandatory requirement if it is backed by law. As per section 139AA of the Income Tax Act,1961 linking PAN with Aadhar to file I-T returns is a must.

The judgment today certainly adds clarity and prevents the use of Aadhar by body corporates ie. Banks / Mobile companies. It is still unclear as to what will happen to the Aadhar numbers already updated with banks and mobile service providers. Can the customers cancel the linking now, is a question?
A few media tweets from the official UIDAI handle for reference









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About CA Janhavi Phadnis 78 Articles
Chartered Accountant and financial consultant. She has worked with corporates for 14 years with expertise in Forex-Treasury, Accounting, and Corporate Tax. She can be contacted at info.financepost@gmail.com

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