In a historic judgment, the Supreme Court upheld the validity of the Aadhaar Act and scheme by a 4: 1 majority while placing some restrictions on its use. The judgment was pronounced by a bench of Chief Justice Dipak Misra and Justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan. Justice Chandrachud’s views dissented from the majority. Justice Sikri wrote a judgment on behalf of himself, CJI Misra and Justice Khanwilkar.
While Chief Justice Dipak Misra, and Justices A.K. Sikri, A.M. Khanwilkar and Ashok Bhushan form the majority, Justice D.Y. Chandrachud wrote a dissenting view, calling Aadhaar “a fraud on the Constitution.”
The apex court has struck down Section 33 (2) of the 2016 Aadhaar Act, which permits disclosure of authentication information to the government on grounds of “national security”. The clause allowed a bureaucrat at the joint- secretary level to make this disclosure.
The Supreme Court said benefits under the Aadhaar project should be in the nature of welfare schemes and it cannot be made compulsory for services such as bank accounts, mobile connections or school admissions.
The court has also partially struck down Section 33 (1) of the Act that allowed disclosure of Aadhaar information to a district judge. According to the ruling, the disclosure can now only be made after giving the citizen concerned an opportunity to be heard in court.
The court has also struck down Section 57 of the Aadhaar Act that allowed private entities and corporate bodies to make Aadhaar mandatory. Now, banks, telephone service providers cannot insist on Aadhaar.
The court also struck down a notification issued under the Prevention of Money Laundering Act that made Aadhaar mandatory for all e- kyc.
The court has also struck down Section 47 of the legislation that barred individuals from filing complaints in case of a breach of their data. Under the Act, only the Unique Identification Authority of India (UIDAI) is empowered to take up data breaches.
The court has also ruled that the UIDAI cannot retain authentication records for five years. This period is now limited to six months and it will be illegal to hold data beyond that.
The majority verdict has read down Section 57, clarifying that private parties can no longer mandate Aadhaar , but statutory authorities can when there is a backing of a law. More clarity is required on what would be a valid law as per this section. The striking down of the DOT order on Aadhaar- sim linking and of the PMLA rules on Aadhaar-bank account linking indicate that every law will not be justified under this head. The striking down of Aadhaar- bank account linking further, will also impact the RBI new norms on KYC which had mandated Aadhaar subject to the decision of the Supreme Court in the Aadhaar case.
The court has also cautioned the government that no citizen can be denied state benefits for the lack of Aadhaar. Justice Sikri, in the majority opinion, wrote that the court is not taking the instances of exclusion lightly. He, however, added that since the purpose of the Aadhaar Act is inclusion, striking down the law for excluding people would be akin to “throwing the baby along with the bathwater“