Supreme Court Upholds Law Linking Aadhaar With PAN

The Supreme Court delivered its judgment in the constitutional challenge to Section 139AA of the Income Tax Act today. Brought in by way of an amendment in April this year, this provision made it mandatory for all taxpayers to quote their Aadhaar number when applying for a Permanent Account Number (PAN) and for filing returns of income. Failure to link one’s PAN with Aadhaar would automatically invalidate the former.


It is important to recall that this amendment was passed at a time when several petitions challenging the constitutionality of the Aadhaar project continue to be pending before the Supreme Court. Through various interim orders, the Court has repeatedly directed that Aadhaar must remain voluntary till the petitions are conclusively decided. In 2015, a three-judge bench felt that there was some ambiguity in the Supreme Court’s jurisprudence on the right to privacy (which the petitions rely on), and referred the matter to a larger bench. This bench is yet to be constituted. These orders were passed before the Parliament passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act in 2016 (Aadhaar Act). With the passage of the Aadhaar Act, the status of the interim orders has been put in question, with the government claiming that it is free to mandate Aadhaar for any service or benefit.

In the context of the Aadhaar-PAN petitions, the pending reference on the issue of privacy is important as it severely curtailed the grounds for challenge available to the petitioners. Forced to give up arguments on privacy, the submissions in this case were largely limited to the issue of bodily integrity and the right to equality. Arguments were also made on the grounds that the introduction of Section 139AA of the Income Tax Act violates Articles 14 and 19 of the Constitution of India.

However, in its judgement today, the Court has construed privacy extremely broadly. The Court excluded all arguments made on bodily integrity, dignity and the right to informational self-determination, on the basis that these concepts are linked to privacy.


The Court upheld s. 139AA(1), making it mandatory for taxpayers to quote their Aadhaar while filing returns of income. However, for existing PAN holders who are not yet enrolled and do not have an Aadhaar number, the proviso under s. 139AA(2) has been stayed till the Constitution Bench decides the pending writ petitions challenging Aadhaar. This stay would not benefit those who have already obtained an Aadhaar number.

The Court justifies this partial stay on the ground that the consequences for non-compliance are severe, and individuals should not be made to suffer till the main matter attains finality.

The Court also read down the proviso to s. 139AA(2) which creates a legal fiction by which non-linking of the PAN with the Aadhaar number would result in penal provisions under the Income Tax Act applying ‘as if the person had not applied for the allotment of the PAN’. The Court held that these provisions could only apply prospectively.


I. Legislative Competence

a) Legislature lacked authority to pass a law contrary to judgments of the Supreme Court (the interim orders) without removing its basis – The court held that these orders were passed in the absence of any statutory scheme (and hence, lacked a basis). Further, it held interim orders could not preclude the Parliament from passing such a law.

b) Aadhaar Act itself was voluntary, and therefore, s. 139AA could not indirectly make it mandatory – The Court categorically holds that enrolment under Aadhaar is voluntary. However, it leaves open the question whether the government could make the number mandatory for receipt of benefits under Section 7, observing that is was squarely within the ambit of the pending writ petitions.

The Court went on to reject the contention the legislature could not make Aadhaar mandatory under s. 139AA, holding that the purpose behind the statute was entirely different from that of the Aadhaar Act. It accepts the efficacy of Aadhaar in solving stated objectives such as money laundering and black money based solely on the Parliament’s wisdom.

II. Article 14

It was argued that s. 139AA drew an arbitrary distinction between assesses who were individuals and others such as partnership firms, companies and trusts etc. as the latter were not required to obtain an Aadhaar number. Excluding juristic entities such as companies would fail to address the government’s stated objectives of weeding out fake cards and curbing black money.

The Court outlined the twin tests under Article 14 – that there must be a reasonable classification founded on intelligible differentia and this must have a rational nexus with the object sought to be achieved. It rejected the contention that mandating Aadhaar only for individuals could not achieve the desired purpose. What is surprising is that in reaching this conclusion, the Court accepts without question, the efficacy of Aadhaar to successfully de-duplicate PAN cards. This is despite the fact that the petitioners brought to light several instances of private enrollers mismanaging data and the cancellation of lakhs of cards for biometric and other errors.

III. Article 19(1)(g)

The petitioners had argued that the penal consequences associated with non-compliance were draconian and completely disproportionate, affecting individuals’ rights to carry on their business or profession. In dealing with the submission on proportionality, the Court focused on s. 139AA(2), which prescribes the penalty for non-compliance. The Court observed that several routine activities in course of any business required PAN. It held that invalidating one’s PAN would restrict the freedom to carry on trade enshrined under Article 19(1)(g). The Court then undertakes a lengthy discussion on the objective of Aadhaar to determine the reasonableness of the restriction.

The Court’s analysis in this section is astonishing. Without having presented any evidence to support or deny such a claim, the Court observes that failure to identify beneficiaries is ‘one of the main reasons’ for leakages in subsidies. (In fact, researchers have repeatedly questioned and de-bunked this assertion). The Court also fails to note the RTI reply cited by the petitioners, pointing out that 99.7% of persons enrolled for Aadhaar already had two other identity proofs. The judgment also makes bald assertions, referring to Aadhaar as the ‘most advanced and sophisticated infrastructure’, and hints at its use ‘to take care of problem of terrorism to some extent’ and also to check ‘crimes and also help investigating agencies in cracking the crimes’. It is worth pointing out that it is exactly this sort of mission creep that makes Aadhaar an extremely worrisome project.

The Court holds that it is the prerogative of the legislature to make penal provisions for violating a law, but does not explicitly comment on the reasonableness of the restriction.


Limiting the relief to those who have not yet enrolled for Aadhaar is questionable for two reasons:

  1. As per the government’s submissions, 98-99% of the adult population already has an Aadhaar number, and therefore this decision only protects a miniscule minority of the population. Additionally, limiting relief to those who have managed to remain outside the system overlooks the fact that many were coerced to enrol (as essential services or benefits were made contingent on it). It also overlooks that instances of data leaks came to light only recently, prompting several citizens to have second thoughts about the project only after they had enrolled. But most importantly, the judgment ends up protecting only those who are privileged enough to not depend on the state for benefits and services, and have thus managed to remain un-enrolled.
  2. Rejecting the Article 14 challenge, the Court had held that there could be no distinction between assesses who had ‘voluntarily’ enrolled for Aadhaar, and those who hadn’t or did not wish to. The legal regime had to apply uniformly to all individual assesses, it held. It is perplexing then for the Court to make the same distinction at the time of the final order, without any cogent reasons.

However, despite the limited relief, there is a silver lining in this judgment – the Court observed that it had not addressed any of the objections based on Article 21 of the Constitution, and the statute was being upheld subject to Aadhaar passing this ‘more stringent test’. At several places, the judgment makes note of these ‘important’ issues and hopes for their proper adjudication.

The judgment also notes the petitioners’ concerns regarding data leaks and observes that appropriate measures to address this are essential.

Disclosure: The author assisted the petitioners’ (Maj. Gen. Vombatkere and Mr. Bezwada Wilson) lawyers on specific occasions during the course of the hearing.

(Updates from the SCOI) WhatsApp-Facebook Data Sharing (Day – II): Can Fundamental Rights be Exercised Against WhatsApp?

The hearing in the petition challenging WhatsApp’s privacy policy continued today. Arguments made during the course of yesterday’s proceedings can be accessed here. Before the respondents could resume their arguments on maintainability, the Additional Solicitor General made a brief representation on behalf of the Central Government. He submitted that even if the Court finds that a writ lies against the Government, it should refrain from issuing it as the Government was already in the process of framing a statutory regime for data protection. He stated that these binding regulations could be in the form of a statute, rules or Executive directions.

Counsel for Facebook subsequently resumed his arguments on the issue of maintainability of the special leave petition. He argued that the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (‘2011 Rules’) along with other provisions of the Information Technology Act 2000 (‘IT Act’) provided a complete regime for the collection, use and disclosure of personal information. He contended that it was not open to the petitioners to argue that these rules were insufficient, as that was squarely within the realm of public policy. Particularly with respect to the 2011 Rules, he stated that WhatsApp did not collect any of the eight categories of information covered by the definition of ‘sensitive personal data or information’[1].

The Court sought clarity on whether the respondents were covered by the 2011 Rules. For the intervenor, it was submitted that metadata was outside the ambit of the 2011 Rules. The petitioners’ counsel reiterated this, and also stated that the 2011 Rules were limited to only ‘sensitive personal information or data’, which excluded important information such as phone numbers. She also pointed out that on 24th August 2011, the Ministry of Communications & Information Technology had released a ‘clarification’, which restricted the applicability of the 2011 Rules only to companies located within India. All parties (as well as the bench) were baffled as to how a clarification could limit or amend the scope of statutory rules. For the time being, it appears that the Court will not be taking cognizance of this clarification.

Justice Dipak Mishra opined that an aggrieved citizen would be entitled to an alternate remedy if a violation of the rules also constituted a violation of a fundamental right. Facebook’s counsel responded stating that there was no violation of the rules in the instant case and that in any case, they were not required to take consent at all, considering they did not collect any sensitive personal information.

At this point, the Bench posed two questions to the petitioners. It asked for a clarification on the information collected by WhatsApp and an explanation on how metadata was generated. The petitioner’s counsel took the Court through several clauses of the policy including one where WhatsApp reserved the right to create ‘derivative works’ out of the content of a user’s message. She argued that notwithstanding the claim of end-to-end encryption, the language of the policy was ‘suitably ambiguous’ regarding access to content of messages. She also emphasized on WhatsApp’s access to other information, such as a user’s phonebook, which included numbers of individuals who were not users of the service. She argued that there was no privity or consent in the latter circumstance. With respect to metadata, she highlighted how it had the potential to reveal much more than actual data, enabling the private corporations to draw behavioral patterns. In her view, the fact that WhatsApp had been bought over for $19 billion signified that access to this data was a ‘goldmine’ for Facebook.

On behalf of Facebook, it was urged that besides the 2011 Rules, Sections 43A (compensation for failure to protect data), 45 (residuary penalty), 46 (power to adjudicate), 79 (exemption from liability of intermediary in certain cases) as well as the Information Technology (Intermediaries Guidelines) Rules 2011 created a complete code for the regulation of WhatsApp. It was also clarified that the sub-license clause in the policy was a standard clause, required to covert the message into its encrypted form. Additionally, Facebook offered to submit an affidavit to the effect that WhatsApp had not and could not access the content of a message.

Facebook elaborated on two other arguments made by it on the previous day –

  1. The Court’s writ jurisdiction could not be invoked against a private party where the dispute was purely contractual. He also argued that neither WhatsApp nor Facebook performed a public function, or owed any public duty. Reliance was placed on Jatya Pal Singh v. Union of India (2013) 6 SCC 452, where the Supreme Court had held that service provided by telecom operators in a competitive market for commercial purposes did not amount to a public function. It further held that in order to establish public function, a party would have to ‘prove that the body seeks to achieve some collective benefit for the public or a section of public and [is] accepted by the public as having authority to do so.’
  2. All submissions were couched on the issue of privacy or some form of it, which could not be raised in light of the pending reference. Facebook’s counsel took the Court through the reference order of 11 August 2015, highlighting that the determination of the very existence as well as scope of a fundamental right to privacy had been referred to the Chief Justice of India.

In response, the petitioners argued that pursuant to Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal (1995) 2 SCC 161, electromagnetic waves facilitating transmission were a public good. While private, messages sent through WhatsApp were riding on a public medium. As per WhatsApp’s own policy, the service was intended as a replacement for conventional text messages. It was argued that a situation where telecom services were heavily regulated and licensed but Over The Top (OTT) services were not was anomalous. At this point, Facebook’s counsel interjected urging that the nature of an open Internet must be preserved. He argued that WhatsApp used the network of service providers that were properly licensed.

The petitioners’ counsel clarified that the argument was only intended to draw a comparison between competing choices from the point of view of a consumer. She stated that while licensing would be undesirable, OTT services must be subject to some form of regulation. The counsel for the intervenor also urged that they were strongly opposed to a licensing regime for OTT services. He urged the Court to take note of Vishakha v. State of Rajasthan, where the Supreme Court had found that the state had failed to protect and fulfill its obligation of safeguarding fundamental rights. As a result, it had framed interim guidelines for the prevention and redressal of workplace sexual harassment that would be applicable to all workplaces. Drawing an analogy, it was argued that the Supreme Court must step in in this case to frame appropriate guidelines for the protection of personal data.

Another argument advanced on behalf of the petitioner was that the contract between an individual and WhatsApp was unconscionable, and consequently attracted public policy considerations. With a user base of over 160 million, India was one of WhatsApp’s biggest markets. However, considering that the service was used by children as well as those who may not be literate, it was argued that the Court must step in to protect against procedural as well as substantive unconscionability. Placing reliance on the Italian anti-trust regulator’s decision to subject WhatsApp to a heavy fine, it was urged that WhatsApp owed the same public duty to Indian users.

The case has been adjourned to 21 July 2017, when arguments on maintainability are likely to conclude. It is believed that WhatsApp’s counsel will make additional submissions on this issue.

[1] Sensitive personal data or information of a person means such personal information which consists of information relating to;—

(i)  password;

(ii)  financial information such as Bank account or credit card or debit card or other payment instrument details ;

(iii)  physical, physiological and mental health condition;

(iv)  sexual orientation;

(v)  medical records and history;

(vi)  Biometric information;

(vii)  any detail relating to the above clauses as provided to body corporate for providing service; and

(viii)  any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise:

(Updates from the SCOI) WhatsApp-Facebook Data Sharing (Day – I): From Content to Metadata

Today marked the first substantive hearing in the petition challenging the Delhi High Court’s judgment upholding WhatsApp’s updated privacy policy. Summaries of arguments in the previous hearings in this case can be found here and here. Curiously, despite the petitioners’ counsel being available in Court, the Court asked the counsel appearing for the intervenor to lay out the issues in the case. As mentioned earlier, the Internet Freedom Foundation had filed an intervention application, which had been allowed by the Court on the last date of hearing.

IFF’s counsel began by apprising the Court that India lacked a statute on data protection. He argued that the absence of a legislative framework allowed corporations to collect extensive data, including metadata. This, he contended, enabled these corporations to aggregate information and create an extensive profile of an individual, including revealing sensitive information such as that related to health and sexual preferences. The lack of a data protection authority or commissioner resulted in lack of knowledge about how personal data is held and exploited. He argued that in such a scenario, the Supreme Court must step in and hold that the state has a positive obligation to protect the rights infringed as a result of such data practices. In his view, exploitative data practices infringed an individual’s right to free speech enshrined under Article 19(1)(a) as well as Article 21. He located this positive obligation under Article 17 of the International Covenant of Civil and Political Rights (ICCPR), to which India is a signatory, as well as Article 12 of the Universal Declaration of Human Rights (UDHR).

Before he could continue, the counsel for Facebook Inc. objected to the case being heard on the ground that the existence and scope of a right to privacy had been referred to a larger bench for determination. (In 2015, a three-judge bench of the Supreme Court had cited some ambiguity in the jurisprudence on the right to privacy and referred the issue to the Chief Justice of India). At this point, the petitioners’ counsel responded, stating that the case at hand included possible violations of Articles 19(1)(a), 19(1)(c), 19(1)(d) as well as 21. She stated that the petitioners were basing their claims on these rights dehors a right to privacy. However, she also clarified that the right to privacy continued to exist under statutory law, common/tort law as well as under international covenants. She argued that foreign corporations could not be allowed to take advantage of a lacuna (if any) in the law till the time the larger bench decided the issue. In her view, there were laws in place to address the issues at hand.

Both counsels also apprised the Court regarding Italy’s anti-trust regulator fining WhatsApp €3 million for the same privacy policy and a German Administrative Court upholding the Hamburg Data Commissioner’s order to stop transfer of data between both entities for German users.

The intervenor’s counsel set out Facebook’s model for targeted advertisements, which allows advertisers to customise their audience. This targeting is in a large part, facilitated by the collection of metadata such as information about one’s device, network information, location etc. Before he could complete, Facebook’s lawyer again objected to this line of argument stating that none of these facts or issues had been raised before the High Court or in the main petition and would consequently warrant a separate response. The Court attempted to steer the proceedings back to WhatsApp’s privacy policy and asked the intervenor’s counsel to show how it infringed rights.

He argued that the some of the terms were in contradiction with WhatsApp’s stated claim of providing end-to-end encryption. These included their practice of retaining popular ‘content’ for a longer duration of time and stating that they do not retain messages in the ‘ordinary’ course of providing their services. On the aspect of metadata, it was argued the terms allowed for collection of extensive information (such as IP addresses, mobile device and network information as well as location information) and allowed its use and disclosure to several third parties, including Facebook. An analysis of these terms can be found here. Further, it was argued that while the 2012 policy clearly articulated what information WhatsApp did not collect, this was absent under the new policy. Additionally, the age for children to create an account was lowered from 16 to 13 years. He also argued that there was no informed consent with respect to accepting these changes.

In Justice Mishra’s view, arguments on consent were unhelpful as they brought the issues within the frame of contractual obligations. He urged the counsel to advance arguments on how the policy impacted individual rights. Recognising the value of metadata, he framed the issue as whether commercial exploitation of information pertaining to an individual’s identity had an impact on rights.

The counsel for Facebook India Ltd. shared with the Court that only a user’s phone number, device identification, account registration details and their ‘last seen’ status was shared with Facebook. This is significant, because the privacy policy is silent on this, and neither Facebook nor WhatsApp have explicitly stated this before.

Continuing with his arguments, the intervenor’s counsel argued that –

  1. WhatsApp’s updated policy impacts the freedom guaranteed under Article 19(1)(a) and 21 – Article 19 was distinct from the other rights under the Constitution because it guaranteed (a right to) freedoms, and not solely a right. This was necessary for the self-fulfilment of an individual (Indian Express Newspapers v. Union of India (1985) 1 SCC 641). The extensive and unregulated collection of information by WhatsApp and Facebook inhibited this freedom, creating a chilling effect. The feeling of being under surveillance also attracted rights enshrined under Article 21.

Further, Article 17 of the ICCPR and Article 12 of the UDHR cast a positive obligation on the state to enact measures that would allow these rights to be meaningfully exercised.

  1. There can be no waiver of fundamental rights guaranteed under Article 19(1)(a) and Article 21 – While several arguments were sought to be raised on the issue of consent, only this was urged, as Justice Mishra reiterated his objection to this line of argument. Citing Basheshar Nath v. CIT (1959 (Suppl) 1 SCE 528), it was argued that there can be no waiver till the person waiving her rights is fully informed as to her rights and abandons them with full knowledge.
  2. Data protection laws of foreign countries prohibit sharing of personal and sensitive data without free consent – The counsel took the Court through the provisions of the German data protection statute for guidance. Importantly, provisions emphasising on certain inalienable rights (such as that of access, rectification and erasure) were also brought to the Court’s notice.
  3. Right essential to exercise a fundamental right must be deemed to be a part of that fundamental right – He elaborated on the importance of ‘penumbral rights’ as articulated in the landmark United States Supreme Court decision Roe v. Wade and argued that a right essential to enjoy other fundamental rights would in itself be fundamental. He also cited Olga Tellis v. Bombay Municipal Corporation for this proposition.

In conclusion, the intervenor’s counsel laid out the reliefs sought from the Court – that data protection guidelines be framed by the Court till such time as the Parliament enacted a legislation. Alternatively, WhatsApp should be directed to provide all users with the opt-out clause (even after the thirty day period, as was provided), while continuing to access the service.

After almost an entire day’s hearing, the Court thought it appropriate to give the respondents a chance to raise the issue of maintainability – that is, to determine whether the petition was fit for hearing before the Court or not. Counsel for Facebook Inc. argued that –

  1. The issue was purely in the realm of contract and the petitioners were precluded from any remedy under public law.
  2. Neither Facebook nor WhatsApp were ‘state’ or agents or instrumentalities of the state so as to attract the Court’s writ jurisdiction
  3. Under its terms, WhatsApp had reserved its right to renew its policies in the event of an acquisition or a merger.
  4. The petitioners could not claim to speak for all users of WhatsApp and their grievances regarding consent would only be applicable to them and not others.
  5. The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, framed under the Information Technology Act 2000 provided a statutory regime for the regulation of services such as WhatsApp and Facebook.

The arguments on maintainability will continue tomorrow and the petitioners as well as the intervenor will be asked to respond to the submissions advanced.

Supreme Court Hears Fresh Challenge to Aadhaar

Yesterday, a new petition challenging several sections under the Aadhaar Act came up for hearing before a two-judge bench of the Supreme Court. The bench, comprising of Justices A.K. Sikri and Ashok Bhushan, was the same that heard the petitions challenging s. 139AA of the Income Tax Act, which made it it mandatory to link one’s Permanent Account Number (PAN) with Aadhaar.

The hearing began with the bench wanting to know why another petition had been filed, considering several petitions challenging the Aadhaar scheme as well as the Aadhaar Act were already pending before the Court. To recall, these earlier petitions were referred to the Chief Justice of India on 11 August 2015 to constitute a larger bench to decide the existence and scope of a fundamental right to privacy. Privacy is one among several grounds on which the validity of the project has been challenged. Almost two years since, this bench is yet to be constituted. Yesterday, the counsel for the petitioners argued that the interim relief sought in the present case distinguished it from the earlier batch of petitioners.

By way of interim relief, the petitioners sought a stay on eighteen Executive notifications, which made Aadhaar a mandatory condition to receive benefits under several welfare schemes. These included compensation schemes for victims of the Bhopal Gas tragedy, the Mid-day Meal scheme as well as Ujjawala, a scheme for the prevention and rehabilitation of victims of trafficking. For many of these, the deadline to furnish Aadhaar is 30 June 2017. This makes interim relief crucial, considering that the Supreme Court is officially on vacation till 2 July 2017.

The Solicitor General, appearing for the Central Government, stated that the same notifications had been challenged in the main petitions too, by way of interim applications. The petitioners’ counsel reiterated the urgency in the matter and emphasised how the mandatory condition could lead to large scale exclusion of legitimate beneficiaries. However, in the judges’ view even interim relief could only be given by the Constitution bench (which has not yet been formed), since the issues and the grounds in the writ were substantially similar to the earlier petitions.

In its order, the Court issued notice in the petition. Further, it tagged this petition with the batch of existing petitions challenging the vires of Aadhaar. It also noted that urgent orders were required and granted the petitioners liberty to approach the Chief Justice for relief, including interim relief.

Linking PAN with Aadhaar – Update from the Supreme Court Hearing (Day – VI)

The arguments in the writ petition challenging the vires of Section 139AA of the Income Tax Act continued for the sixth (and final) day today. The counsel for Mr. Binoy Viswam continued his rejoinder submissions today. A summary of arguments made over the last five days can be found here.

During the course of his initial arguments, Mr. Viswam’s counsel had contended that s. 139AA ought to be struck down as it violated several interim orders of the Supreme Court directing that Aadhaar be voluntary. In its response, the Central Government had argued that there could be no injunction or estoppel against the Parliament’s power to legislate. Today, Mr. Viswam’s counsel clarified that he was not disputing the Parliament’s sovereignty. His contention was that as long as the interim orders stood, s. 139AA could not have been enacted. He further stated that the Parliament could have ‘removed the basis’ of these orders when drafting the legislation, but had chosen not to.

In response, Justice Sikri stated that the instant case was different as there was no statutory scheme at the time of the interim orders, implying that were was no ‘basis’ that could or should have been removed. He asked if there was any authority to support the proposition. The petitioners’ counsel informed the bench that there wasn’t and that the Court would be deciding this issue for the first time.

On further prodding from the bench about the basis of the interim orders, the counsel responded that they were in the nature of mandamus to ensure that the scheme remained voluntary. In the bench’s view, the writ of mandamus was issued to only the Executive, and not the Parliament. However, it was submitted that once the Supreme Court had passed an order, Parliament was not at liberty to override it, keeping its binding nature in mind. He contended that the sanctity of judicial orders must be maintained, and a judgment could only be overridden by ways known to law. As an analogy, he pointed out the Supreme Court’s ruling banning selling of alcohol along highways. He argued that states could only overcome the judgment by de-notifying highways, and not by merely allowing sale of liquor irrespective of the Court’s judgment. This, in his view amounted to removing the basis of the judgment. Coming back to Aadhaar, he contended that the only way to remove the basis would have been to make Aadhaar mandatory under the Aadhaar Act itself.

Terming the Parliament’s action as dichotomous, he argued that when voluntary under the Aadhaar Act, Parliament had no competence to make it mandatory by s. 139AA. Justice Bhushan appeared unconvinced, and stated that both statutes operated in different domains. The petitioner’s counsel conceded, but argued that this still created a clash that must be rectified. Notably, he argued that s. 139AA did not begin with a non-obstante clause (that is, a clause to the effect that an action could be mandated notwithstanding any other law or judgment). The same Parliament could not confer a right to obtain Aadhaar and simultaneously impose it as a duty. That, he argued, would lead to absurd results.

On the Central Government’s argument that proportionality should not be read into Article 14, the counsel clarified that his argument on proportionality was limited to the statute not having a rational nexus with the object sought to be achieved – that is, to eradicate black money.

He went on to explain the statistics put forth by the government with respect to increased PAN cards. He pointed out that post 1998, PAN was made an essential requirement to obtain mobile phone connections and debit/credit cards, leading to a sharp increase in the number of PANs. This, he argued, did not make the increased numbers ‘sinister’. He also pointed out that the statistics showed that the extent of duplication was minimal. Therefore, the Government had little basis to mandate Aadhaar to de-duplicate PANs when there were no figures or studies conducted to examine the extent of the problem. He reiterated that the consequence of making Aadhaar mandatory were draconian, and consequently disproportionate. This, he argued, violated individuals’ right to practice their trade or profession, enshrined under Article 19(1)(g) of the Constitution, and was not a reasonable restriction under Article 19(6).

He concluded his arguments by quoting Willian Douglas on the need to remain vigilant to protect civil liberties. He prayed for the Court to either strike down s. 139AA or at least strike down the proviso, which attached penal consequences for non-compliance. As an alternate submission, he prayed that the Court make linking Aadhaar mandatory only for those who had enrolled.

With the conclusion of the arguments, the Court reserved its judgment.

WhatsApp-Facebook Data Sharing: Deadlock Over Issues

The petition filed against the Delhi High Court’s ruling on the challenge to WhatsApp’s privacy policy was heard by a bench of five judges of the Supreme Court last week. This decision upheld the updated policy, subject to a few restrictions. At the last hearing, the Court had directed the petitioners to frame questions of law that the Court will be required to consider.

The questions submitted by the petitioners focused on issues relating to the right to privacy of communication and the need to regulate platforms such as WhatsApp and Facebook to safeguard individuals’ privacy, among others. The petitioners’ counsel argued that WhatsApp and its parent company, Facebook had failed to respect users’ privacy rights and referred to WhatsApp’s policy, highlighting the ambiguity in some of the clauses. This emphasis on privacy comes in the backdrop of objections from Facebook’s counsel that the right to privacy could not be agitated before this Court, till it was authoritatively decided by a Constitution bench, and the Court’s own insistence to frame the issues in a different manner.

In the bench’s view, an important issue was that of choice and the freedom to choose. Counsel for Facebook’s immediate response to this was that aggrieved users were entitled to leave the service. However, Justice Dipak Mishra responded stating that freedom to choose contemplated affirmative choice, and not mere negative choice. Questions framed by the petitioners’ counsel were taken on record and the respondents’ counsel was also given liberty to file their propositions of law. However, the Court is yet to frame the questions which it will ultimately decide.

In addition to this, the Internet Freedom Foundation, an organisation that advocates for digital rights in India, filed an application to be impleaded in the present case. The senior counsel appearing for IFF argued that the privacy risks in the instant case arose from the sharing and use of metadata by the two companies. Their application was allowed by the Court.

Linking PAN with Aadhaar – Updates from the Supreme Court (Day V)

The arguments in the case challenging the constitutionality of s. 139AA of the Income Tax Act (IT Act) continued for the fifth day today. Summaries of arguments advanced on the first four days can be accessed here. Today, the Central Government concluded its submissions and the petitioners commenced their rejoinder arguments.

Due to the Attorney General’s unavailability, the Central Government as well as the Unique Identification Authority of India (UIDAI) were collectively represented by two counsels for today’s hearing.

The Government advanced arguments on two grounds raised by the petitioners during their submissions –

  1. Violation of Article 14 of the Constitution
  2. Informational self-determination

Violation Article 14 of the Constitution

On Article 14, two main arguments were advanced. The first was that proportionality was not a facet of Article 14, and should not be read into the Article in the instant case. The second argument advanced was that in any case, on facts, there was no Article 14 violation. An important facet of the second argument, subsequently advanced by the second counsel was that inclusion of Aadhaar into the tax regime actually helped secure Article 14 rights, or the right to equality. India had a progressive tax regime, which in itself was an important aspect of equality under Article 14. It was argued that weeding out duplicate PANs to end corrupt practices would eliminate the discrimination against honest tax payers as against those abusing the system.


The first argument advanced was that proportionality was not a facet of Article 14 under our constitutional scheme. To decide proportionality of a legislation would amount to the Court substituting its wisdom in place of the legislature. It was argued that the issue of proportionality only arose in a context where a restriction needed to be balanced with a right of if different rights were required to be balanced. Article 14 did not contemplate any such balance and therefore, the issue of proportionality did not arise.

                  No violation of Article 14 on merits

With respect to the second argument, it was argued that the penalty imposed by the legislature could not be struck down on proportionality. This was because s. 139AA did not impose any new penalty and the consequences would be the same as if an individual did not quote their PAN for tax returns. The counsel revisited the AG’s argument that the purpose of PAN was also to provide a unique identity. Further, it was also submitted that an enactment cannot be struck down on reasonableness or arbitrariness. Rajbala v. State of Haryana was again cited for this proposition. Citing the Mardia Chemicals judgement, Justice Sikri suggested that in certain circumstances, the ground of arbitrariness may be available.

On the argument that s. 139AA lacked a rational nexus with the object of controlling black money as it only affected individuals and not companies, the Union’s response was that the enactment never purported to solve the problem completely. The Government would probably devise other methods for tax evasion and money laundering done through companies or trusts. A sealed envelope, with details of ongoing investigations was handed over to the bench to impress upon it the extent of tax fraud perpetuated by individuals. However, the bench refused to take a look at it.

The bench appeared convinced regarding the intelligible differentia between individuals and legal persons but quizzed the counsel regarding the discrimination between willing enrollees of Aadhaar and those who objected to the scheme. To this, the Union’s response was that the object of the scheme was not to discriminate, as it only sought de-duplication of PAN and not seeding of Aadhaar numbers. The counsel further argued that ‘conscientious objectors’ should actually be considered as offenders of the law, notwithstanding any good or moral justifications for not wanting to comply. If being a conscientious objector was seen as a standard for discrimination, most laws would be considered discriminatory.

Informational Self-Determination

With respect to informational self-determination, three arguments were advanced – that the right was not absolute, that the right was an inherent facet of privacy (which could not be argued before this Court) and that the right could not be imported into Indian jurisprudence as is, due to peculiarities of the Indian context.

The counsel argued that even in Germany, where the right emerged, it was not absolute. In India, all fundamental rights envisaged restrictions. Quoting Daniel Solove’s seminal paper titled Conceptualizing Privacy, he further argued that informational self-determination was intrinsically linked to privacy. Lastly, he submitted that German conceptions of privacy were markedly different and warned against directly borrowing solutions from one jurisdiction to another, without context. The counsel cited R. Rajagopal v. State of Tamil Nadu to emphasise that the right to be let alone was a part of privacy rights, which prompted Justice Sikri to frame the issue as that of choice. He asked the petitioners if they had any right to pay taxes in the manner they desired.

In conclusion, the counsel argued that biometrics were the most sophisticated technology for de-duplication in this day and age. Under Section 70 of the Information Technology Act, the central repository which stored biometrics had been designated as a Critical Information Infrastructure, ensuring additional security for it.

At 2:30 pm, shortly after the court reassembled after the lunch break, the petitioners began their rejoinder arguments. On behalf of (Retd) Maj. Gen Vombatkere and Mr. Wilson, the following arguments were made –

  1. The counsel emphasised on the petitioners’ background and their contribution to the state as well as civil society. He reiterated their grave concerns about the state’s efforts to constrain their freedom. He specifically pointed out Mr. Wilson’s work with manual scavengers and how biometrics have repeatedly failed for those engaged in manual labour. The exclusion due to biometric failure made this a real civil rights issue, rather than an elite concern as the AG had claimed.
  2. He reiterated his argument that the scheme of the Aadhaar Act was in collision with s. 139AA as the former was voluntary and the latter was not. In response, the AG had tried to reconcile this contradiction by arguing that even under the Aadhaar Act, enrolment was mandatory. The petitioners’ counsel argued that this was wrong, and proceeded to attack the premise of this argument by showing how the entire scheme of Aadhaar was voluntary. He relied on –
  • Section 3 of the Aadhaar Act, which creates an entitlement in favour of a resident, but poses no obligation to obtain an Aadhaar.
  • Further, Section 7 of the Act only applied to subsidies or benefits. He argued that it was a narrow provision and could not be extended to situations such as tax collection.
  • Section 8 of the Aadhaar Act contemplates seeking consent, again pointing towards the voluntariness of the scheme.
  • He then referred to the enrolment form appended as a Schedule to the Aadhaar (Enrolment and Update) Regulations 2016. The form clearly stated that Aadhaar enrolment is ‘free and voluntary’.
  • Additionally, citing Regulation 6 of the Aadhaar (Authentication) Regulations 2016, he pointed out how consent was an inherent aspect of the enrolment process. There could be no consent to a mandatory scheme.
  • Further, Section 57 of the Act, on which the AG had relied to show that Aadhaar could be used for purposes other than subsidies or benefits, also contemplated informed consent by making a reference to Section 8. He contended that the nature and character of Aadhaar was essentially voluntary, and therefore, tax payers could not be compelled to enrol for it.
  • The lack of any coercive action or penalty under the Act for failing to enrol.

The petitioners’ counsel also relied on representations made on the UIDAI website and the advertisements put out by UIDAI reaffirming its voluntariness. He proceeded to argue that to claim otherwise would be to defraud the public. Since instrumentalities of the state could not defraud the citizenry, their representations as to the voluntary nature of Aadhaar must be taken to be true and s. 139AA should be struck down on this ground alone.

He went on to reference a report from today’s newspaper about new-borns being required to enrol for Aadhaar even before they were assigned a name. In his view, the insistence on tracking individuals from birth showed signs of a totalitarian state, capable of destroying any individual social or political choice.

He also assailed the Central Government’s argument that biometric authentication was secure and sophisticated. He explained how it was possible to forge fingerprints using a photograph or Fevicol.

On the contention that Aadhaar leaks by government portals were distinct from the main centralised database being compromised, he contended that from the citizen’s point of view, the lapses were made by the state. The citizens’ personal information was in public domain irrespective of where the lapse occured.

On compelled speech, he clarified that the issue was not limited to parting with biometrics or iris scans, but a compulsion to give information to a private third party, 34,000 of whom had been blacklisted. The architecture, he argued, was deeply flawed. Based on the Government’s contention that personal information was required to be supplied for purposes such as Census and registration of property, he responded that these were vastly different. These were localized, retained by one authority and for a narrowly tailored purpose. Under the Census Act, there were restrictions on sharing the information, including a prohibition on using the information in a court of law. (Author’s note – the Aadhaar Act allows information stored in the centralised database to be used for court proceedings pursuant to a judge’s orders)

He also debunked the Centre’s claim that Aadhaar was an identity for the identity-less, by citing RTI replies from UIDAI pointing out that less than 0.03% of the total number of people enrolled lacked any previous form of identification.

Finally, on legislative competence, he argued that despite wide residuary powers, there were implied limitations on the state’s power to legislate with respect to an individual’s body, barring narrowly tailored circumstances. Viewed this way, s. 139AA was not a fiscal statute, where the state enjoyed wide latitude to legislate.

The counsel for Mr. Binoy Viswam commenced arguments shortly before the court rose for the day. His arguments will continue tomorrow, after which the matter is likely to be reserved for judgment. A summary of his arguments made today and tomorrow will be collectively posted after tomorrow’s hearing.