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.

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.

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

The arguments in the writ petition challenging the constitutionality of Section 139AA of the Income Tax Act (IT Act) continued for the fourth day today. This provision mandates individuals to link their Permanent Account Number (PAN) with their 12 digit unique number, Aadhaar on or before 1 July 2017. A summary of the previous three days’ arguments can be found here.

The Attorney General (‘AG’) commenced arguments on behalf of the Central Government today. At the outset, he protested that the petitioners’ arguments were squarely on the issue of privacy, which is pending consideration before a larger bench, and therefore, should not have been raised. On Section 139AA specifically, he explained that the validity of a legislation could only be challenged on two grounds – legislative competence and infringement of the Constitution. He argued that besides these two, there was no ground available to the petitioners to assail the validity of s. 139AA.

Legislative Competence

On legislative competence, it was argued that Articles 246 and 248 of the Constitution, read with List I Entries 82 and 97 allowed the Parliament to enact the provision under challenge.

Violation of Rights Enshrined under the Constitution

On this ground, it was argued that paying income tax by its very nature was coercive. As a result, the challenged provision could not violate Article 19. Further, he contended that the issue of taxation did not trigger Article 21. Viewed within a broader context, the object of taxation was to ensure an orderly society and provide benefits to individuals. Although coercive, it is ultimately used for peoples’ benefit, and therefore the state is entitled to legislate to ensure orderly collection of taxes.

The Attorney General then proceeded to give a background to the introduction on PAN. He explained that Section 139A, that mandates PAN for filing income tax returns, was inserted into the IT Act in 1975. It was introduced to provide a unique identity to tax payers and ensure orderly collection of taxes.

Essentially, the crux of the Attorney General’s arguments was that Aadhaar was a more robust and effective replacement/supplement to the existing identification mechanism under the Act. He responded to the petitioners’ claim of fingerprints being an invasion of bodily integrity by arguing that there was no absolute right to one’s body. United States’ Supreme Court decisions were cited to substantiate this proposition, including the landmark decision Roe v. Wade. The AG also relied on Section 32A of the Registration Act 1908, which mandates fingerprints of buyers and sellers of immovable property. Further, the legal requirement to participate in the population census, and register births and marriages were used by him to contend that individuals could not choose to remain invisible to the state. The state had an interest in identifying everyone. The only real difference between these mandatory provisions and s. 139AA, he contended, was that due to technological advancement, fingerprints under the Aadhaar scheme were stored digitally and in a readable format. He stated that the entire argument on privacy and bodily integrity ‘was bogus’ as privacy intrusions such as body scans at airports were now a part of contemporary life.

On the petitioners’ grounds that s. 139AA was a violation of the Supreme Court’s interim orders in the main challenge to the Aadhaar, he reiterated that it is not a ground for striking down legislation. He argued that the orders had been passed when there was no statute regulating Aadhaar. The interim orders could not bar the Parliament from enacting a statute, irrespective of any undertakings given by officers of the Government (including the AG himself). He also argued that assuming that the interim orders were subsequently vacated after s. 139AA had (hypothetically) been struck down, the conclusion would be unjust. Even in the context of Vishakha v. State of Rajasthan, orders were pronounced with the understanding that they were interim in nature and would only operate till legislation was enacted.

Additionally, in the AG’s view, the context of the interim orders was limited to the usage of Aadhaar for welfare schemes or benefits. Use of the unique number for taxation purposes was never contemplated by the interim orders.

Responding to the petitioners’ argument that Aadhaar couldn’t be made mandatory under the IT Act while it was voluntary under the Aadhaar Act, it was argued that the latter was not the ‘parent’ legislation as had been claimed and did not derive authority from the former. Most importantly, it was argued that Aadhaar was not voluntary, as the petitioners had argued. As per the Central Government’s interpretation of Section 7 of the Aadhaar Act, services could not be denied only to those who had enrolled but not yet been *assigned* an Aadhaar number. Therefore, enrolment was mandatory. Further, Section 57 made usage of Aadhaar for other purposes permissible.

Responding to the petitioners’ argument on the first day that the statute was arbitrary, it was again stated that arbitrariness was not a ground on which an Act of Parliament could be struck down. For this proposition, reliance was placed on State of Madhya Pradesh v. Rakesh Kohli and Rajbala v. State of Rajasthan, amongst others.

The AG also explained to the Court the rationale and technological aspects of the Aadhaar project, and the need for mandating it for income tax returns. He made some tall claims about the robustness of the Aadhaar framework, arguing that it is the most robust system of identification and is completely fool proof. This, in his opinion was essential to weed out the duplicate PANs, which was allowing individuals and companies to launder money, generate black money and finance terror, among other things. Putting a stop to such activities would enable the government to efficiently collect tax and utilize it for public benefit. He explained the process of de-duplication, that is, the process of ensuring uniqueness by checking each set of biometrics against all the entries within the database. This, he argued would ensure that even if an individual obtained an Aadhaar with fraudulent credentials, this fake identity would be ‘locked on’ to him, as the fingerprints would be unique. He also claimed that it was impossible for an individual to obtain two Aadhaar numbers and that this had never happened. He brought to the Court’s notice that Aadhaar had enabled the Central Government to save more than Rs. 50,000 crore. However, no authority was cited to substantiate this figure.

Responding to recent reports of Aadhaar numbers being put out in public domain, the AG stated that the leaks were not from UIDAI’s central repository and that even in those instances, it was irrelevant that Aadhaar numbers were on display as the biometrics were secure.

A recurring theme in the AG’s argument was reliance on theories of social contract. He argued that individuals did not live in vacuum, but were in fact members of society. As a result, the state’s role is to regulate this society through policy and legislation. Individuals could not expect essential services such as roads, electricity and policing from the state, without an obligation to pay taxes. This obligation extended to complying with the state’s procedure for payment of taxes as well. He argued that there was no right to be forgotten against the state as ‘the state does not want to forget you’. Justice Sikri responded to this argument stating that even within a social contract, obligations had to be balanced with individuals’ liberty and dignity.

The AG summed up his arguments citing a World Bank report on the importance of having an identity and its impact on citizens. He argued that wanting to be ‘forgotten’ was a luxury of the rich, as the poor actually wanted an identity. In his view, Aadhaar helps fulfil this by providing an identity to the identity-less.

Tomorrow, the Centre is likely to continue arguments on the issue of Article 14 being violated. The petitioners are likely to respond to the arguments advanced by the Centre today.

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

The petitions challenging the constitutionality of Section 139AA of the Income Tax Act (‘IT Act’) came up for hearing before the Supreme Court today. Section 139AA makes it mandatory for individuals to quote their Aadhaar number when applying for a Permanent Account Number (PAN) as well as to file income tax returns. Section 139AA(2) stipulates that failure to intimate the Aadhaar number would automatically invalidate one’s existing PAN. Further, not linking the two also creates a legal fiction by which the provisions of the Act would apply ‘as if the person had not applied for the allotment of the PAN’.

Passed in March 2017, this IT Act amendment comes in the backdrop of several pending petitions challenging the constitutional validity of the Aadhaar project. Since 2013, the Supreme Court has passed multiple interim orders directing that Aadhaar remain purely voluntary till the pendency of these petitions. In August 2015, the Supreme Court had referred these matters to a larger bench, citing ambiguity in the Court’s jurisprudence on the fundamental right to privacy. Almost two years later, this bench remains to be constituted.

This background is pertinent given that the petitioners were forced to limit their submissions to the issue of linking Aadhaar numbers with PAN. The pending reference effectively ended up acting as a bar to assail the IT Act provision on the basis of privacy issues associated with Aadhaar.

The challenge constitutes of two separate writ petitions, filed by different sets of petitioners. The first petition has been filed by Mr. Binoy Viswam and the second by (Retd). Maj. Gen. Vombatkere and Mr. Bezwada Wilson, who are also petitioners in the main challenge to the Aadhaar project.

Arguments Advanced on behalf of Mr. Viswam:

The counsel for Mr. Viswam primarily advanced two arguments – that Section 139AA is unconstitutional as it violates and overrules several orders of the Supreme Court, and that it infringes Article 14 of the Constitution.

  • Section 139AA violates orders of the Supreme Court that were based on the Central Government’s undertakings – It was argued that by way of successive interim orders, such as on 23 September 2013, 11 August 2015, 15 October 2015 and 14 September 2016, the Court had directed that Aadhaar remain purely voluntary. The 15 October 2015 order specifically states that the Aadhaar scheme must remain voluntary ‘till the matter is finally decided by this Court one way or another’. Reference was also made to the Supreme Court’s recent order in Lokniti Foundation v. Union of India (6 February 2017), where it recorded the government’s submission that Aadhaar was voluntary for obtaining a telephone connection.

Based on these facts, it was argued that no one could be deprived of a service or benefit for want of an Aadhaar number. The bench observed that such undertakings could not preclude the Parliament from passing a law (such as that in issue). To this, the counsel responded stating that the state could not indirectly make Aadhaar mandatory under the IT Act while it remained voluntary under the parent Act, that is – the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (‘Aadhaar Act’). Section 7 of the Act, which stipulates that no benefit or service can be denied on the ground of not having an Aadhaar number, was read to support this contention.

Additionally, it was argued that these interim orders granted individuals a right – the right to not enroll for Aadhaar. This could not be taken away till the decided the matter conclusively. The counsel buttressed this contention citing precedent – Madan Mohan Pathak v. Union of India (1978) 2 SCC 50 and Indian Aluminium Co. v. State of Kerala (1996) 7 SCC 637, amongst others.

  • Section 139AA is violative of Article 14 because it unreasonably targets individuals out of all categories of assessees and for bring arbitrary – Besides individuals, entities such as companies, partnership firms, co-operative societies and trusts are also required to file returns on their income. As a result, it was argued that Article 139AA discriminated between assessees as it only adversely impacted individuals.

The argument advanced was that the twin test of permissible classification – that the classification is not based on an intelligible differentia, and that the differentia has no rational relation to the object sought to be achieved by the provision, were not satisfied in the present case. Given that the object of linking the Aadhaar and PAN is to address black money and weed out fakes, the provision fails to address nefarious activities carried through companies or trusts. This argument was later also advanced on the ground of proportionality.

This was met with some resistance by the bench, which observed that there was a natural distinction between natural and juristic persons and a distinction on that ground was not, discriminatory per se. It went on to observe that the law could be treated as a mere replacement of one system by another. The larger challenge to Aadhaar aside, it was difficult to assail the validity of a new or reformed system on this ground alone.

Counsel for Mr. Viswam then attempted to show that the provision is unconstitutional for being arbitrary. He submitted that such an unreasonable classification virtually resulted in ‘civil death’ for an individual. As per Section 114B of the IT Act, a PAN is necessary for eighteen essential transactions including opening a bank account and purchasing shares. If invalidated under Section 139AA(2), it would unreasonably restrict the right of individuals to carry on their business, as opposed to entities such as companies. Further, the individual would also be subject to additional penalties due to the legal fiction by which an individual is assumed never to have applied for a PAN. It was argued that this retrospective effect was highly prejudicial to individual assessees.

This was immediately objected to by the Attorney General, who argued that the legal fiction was not intended to be retrospective and would only apply from 1 July 2017, which is the deadline for linking Aadhaar with PAN.

To conclude, it was submitted that as per the data published by the Unique Identification Authority of India, enrolment rates for several states such were above 100%. This data was used to show that the problem of fakes or bogus cards existed even under the Aadhaar regime.

Post lunch, the counsel for (Retd.) Maj. Gen. Vombatkere and Mr. Wilson began arguments. He outlined his prayers before the Court – that Section 139AA be struck down, or alternatively, be read down to make Aadhaar a voluntary requirement.

As a preliminary point, he argued that neither of the petitioners had enrolled for Aadhaar. Being parties to the petitions challenging the Aadhaar project, they were conscientious objectors to the entire scheme. He proceeded to outline the broader issues in the challenge, with a view to provide the judges with some context. His submission rested on the idea of autonomy and bodily integrity associated with biometrics such as fingerprints and iris scans. Arguing that the Indian Constitution guaranteed a free, democratic society, he stated that the state had no dominion over core elements on one’s body and identity. As a result, the state could not coerce citizens to part with this information as a condition or as a bargain for enjoying rights guaranteed to them.

The arguments on behalf of (Retd.) Maj. Gen. Vombatkere and Mr. Wilson will continue on April 27 and will build on the specific issue of Article 139AA. The Attorney General is also likely to make his submissions on behalf of the Union Government.

Aadhaar Act as a Money Bill — Judicial Review of Speaker’s Determination Concerning Money Bills

By Dr. Anup Surendranath

The primary hurdle in determining the constitutional validity of introducing the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, (hereinafter, “the Aadhaar Act”) as a money bill is whether courts can judicially review the decision of the Lok Sabha Speaker that it was a money bill. If the Supreme Court does not have the power to judicially review the decision of the Speaker in this context, then it is irrelevant whether the Aadhaar Act is in substantive compliance with Article 110. Without such a power for the Supreme Court, the Speaker’s determination that the Bill before her was a Money Bill would be final and binding without any scope for legitimate judicial review.

This note, however, argues that the Supreme Court has the power to judicially review the Speaker’s decision in this regard and it is essential to lay down that foundation before the court examines the substantive compliance with Article 110 (the non-compliance with the terms of Article 110(1) is relatively an easier case to make).

The entire note can be accessed here:

The New Dimension to the UIDAI Debate: The Aadhaar Bill, 2016


Written By Joshita Pai

The discourse around Aadhaar has only aggravated since its inception, and one of the primary contentions of the debate has been the lack of a statutory force behind the initiative. Amidst all the speculations, the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 was introduced on 3rd of March as a money bill, on the grounds that subsidies and other benefits will be drawn from the Consolidated Fund of India. The Bill seeks to resolve the contention of the lack of a legislation backing Aadhaar. The Bill also allows for more schemes to be attached to Aadhaar in future. Presently, there are a handful of schemes attached to the Aadhaar which have been approved by the Supreme Court. The Bill is an ambitious task to provide a framework for operationalization of Aadhaar.

A Cursory Glimpse

The Bill, establishing the Unique Identification Authority of India (UIDAI) as the authority for the functionality of the Aadhaar process, provides for the conferment of an Aadhaar number, to every resident who submits her identity information. The Bill, in this context defines a resident in clause 2(5). Clause 2(n) provides that identity information includes biometric information and demographic information. Biometric information includes photograph, finger print, Iris scan, or such other biological attribute of an individual as may be specified by regulations. The demographic information includes information relating to name, date of birth, address and other relevant information of an individual specified by regulations but significantly excludes information about race, religion, caste, tribe, ethnicity, language, records of entitlement, income or medical history.

According to clause 9, an Aadhaar number shall not confer or be a proof of, citizenship or domicile The Bill also carries a provision which may require Aadhaar holders to update their biometric and geographic information. The inconsistency in predictability of biometric data of an individual has been a contentious issue but the object of the provision here is as mentioned, the continued accuracy of the information in the repository.

Dissecting the Clauses

The Bill elevates the existence of an Aadhaar number to a proof of identity by virtue of clause 4(3).

Chapter IV of the Bill establishes the UIDAI as a body corporate, consisting of a Chairperson, a CEO and two part-time members. The CEO of the Authority will not be below the rank of Additional Secretary to the Government and will be appointed by the Central Government. The chapter deals with functions of the members, grants by Central Government, accounts and audits, qualifications and enumerations of the members. The Authority is responsible for the establishment, operation and maintenance of the Central Identities Data Repository. Clause 49 provides that the members of the UIDAI will be deemed as public servants. Clause 50 provides that the Central Government is not empowered to issue directions pertaining to technical or administrative matters undertaken by the authority.

Clause 16 of the Bill places restrictions on the Chairperson and members of the UIDAI who have ceased to hold office. It bars them from accepting employment in any management or company, which has been associated with any work contracted by the UIDAI, for a period of three years after the expiry of their employment. Listing the functions of the UIDAI, clause 23 provides that the authority shall formulate policies, procedures for issuing Aadhaar numbers and for the performing authentication of the same. The Authority is designated to carve out regulations including process of collection of information, specify what includes biometric and geographic information. The specifications have been left open to the authority, including the appointment of an entity to operate the Central Identities Data Repository.

The Bill creates a Central Identities Data Repository [Clause 2(h)] which will be the centralized database containing all Aadhaar numbers and details thereto. It will also be responsible for authentication and verification of the information provided by Aadhaar holders, at the time of enrollment. The registration of Aadhaar, has been made voluntary by the force of the Court’s order in August, 2016.

In light of this, clause 7 of the Bill mandates that proof of Aadhaar number is  necessary for the receipt of certain subsidies, benefits and services. The clause carves out a potential exception to the effect that if an Aadhaar number is not assigned to an individual, an alternate means of identification shall be offered for delivery of benefits.

Enabling accessibility to the Aadhar process, clause 5 of the Bill provides for special measures for issuance of Aadhaar to senior citizens, children, persons with disability persons who do not have any permanent dwelling houses. The clause is inclusive in nature.

Chapter VII of the Bill deals with penalties and liabilities for several offences. Impersonation at the time of enrolment as well as impersonation for the purpose of changing the demographic information of an Aadhaar number holder, is punishable with imprisonment. Providing a heavy liability for companies, clause 43 states

Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

A provision which stands out in the chapter listing out penalties is Clause 44. It reads as follows:

(1) Subject to the provisions of sub-section (2), the provisions of this Act shall apply also to any offence or contravention committed outside India by any person, irrespective of his nationality.

(2) For the purposes of sub-section (1), the provisions of this Act shall apply to any offence or contravention committed outside India by any person, if the act or conduct constituting the offence or contravention involves any data in the Central Identities Data Repository (5(f))

Privacy Provisions in the Bill

The statement of objects and reasons appended to the Bill states that it seeks to provide “for measures pertaining to security, privacy and confidentiality of information in possession or control of the Authority including information stored in the Central Identities Data Repository”. 

Chapter VI of the Bill is built around the protection of information by the Authority, collected through the enrolment process. The Bill qualifies biometric information collected and stored in electronic form, as “electronic record” and “sensitive personal data or information” within the meaning of the Information Technology Act, 2000. The distinction between core biometric information and biometric information has been visibly emphasized. Clause 29 imposes a restriction on sharing information and bars the use of core biometric information for any purpose other than for the generation of Aadhaar numbers and authentication.

Clause 28(3) reads

“The Authority shall take all necessary measures to ensure that the information in the possession or control of the Authority, including information stored in the Central Identities Data Repository, is secured and protected against access, use or disclosure not permitted under this Act or regulations made thereunder, and against accidental or intentional destruction, loss or damage.”

Clause 28(5) further provides that the Authority or its officers or employees or any agency which maintains the Central Identities Data Repository shall not, whether during his service or thereafter, reveal any information stored in the Central Identities Data Repository or authentication record to anyone.

The Bill provides for information privacy at the stage of enrollment. According to Clause 3(2), the enrolling agency, which is appointed by the UIDAI for collection of identity information is bound to inform the individual at the time of enrollment, details about (i) the manner in which information collected will be used, (ii) the right of accessibility of information at the hands of the individual and the (iii) the nature of recipients of the information.  The manner of communication of such information has been left open to specific regulations which will be prescribed by the UIDAI.

The Bill provides for authentication of Aadhaar number by a requesting entity in relation to his biometric information or demographic information. Clause 2(u) defines “requesting entity” to mean an agency or person that submits the Aadhaar number, and demographic information or biometric information, of an individual to the Central Identities Data Repository for authentication.

Clause 8(2) makes it mandatory for the entity requesting authentication to obtain consent from the person whose information is to be collected for such authentication. It requires the requesting entity to ensure that the identity information of an individual is only used for submission to the Central Identities Data Repository for authentication. The clause further provides that the Authority shall respond to an authentication query with a positive, negative or any other appropriate response sharing such identity information excluding any core biometric information.

With respect to identity information, clause 29(3) restricts the use of such information available with a requesting entity and states that the identity information will only be used for the purpose specified to the individual at the time of enrollment and only with the prior consent of the individual.  Clause 32 enables an Aadhar number holder to access her/his own information and also mandates that records of request of authentication of an individual, should be maintained.

The functions of the Authority include performing authentication of Aadhaar numbers, deactivation of Aadhaar numbers. Clause 23(m) empowers the Authority to specify, by regulations, various processes relating to data management, security protocols and other technology safeguards under this Act; The UIDAI, according to Clause 23(q) is also entrusted with the function of promoting research and development for advancement in biometrics and related areas, including usage of Aadhaar numbers through appropriate mechanisms;

Disclosure of Information

Envisaging an exception to the protection of information provisions, clause 33 allows for disclosure of information in certain instances. It provides that disclosure of information, including identity information or authentication records is permissible if made in pursuance of an order of a Court (at least District judge), or in the interest of National Security by an officer of the level of Joint Secretary or above. However, the Bill does not define national security and the term in itself is vague and overbroad. It provides that such a direction shall be reviewed by an oversight committee consisting of Cabinet Secretary and Secretaries of Legal Affairs and DeitY. The problems of third party independent oversight and the volume of requests remain as is the case with the oversight committee under the Blocking Rules and the Telegraph Rules. The provisio appended to clause further provides that the direction in the interest of national security shall lapse after the expiry of three months from the date of issue.

Clause 37 of the Bill enshrines a penal provision for unauthorized disclosure of any identity information collected in the course of enrollment or the authentication process. This provision speculates a penalty for individuals as well as companies who engage in unwarranted disclosure. The Bill imposes a penalty for unauthorized access to the repository (clause 38), for tampering with data on the repository (clause 39). Chapter VII further provides for punishment of a requesting entity for unauthorized use of identity information.

The Bill contains vital provisions in terms of requesting entity applying for authentication, access of identity information by an Aadhaar-number holder to introducing liabilities. However, a deeper glance shows that several regulations are yet to be prescribed and have been left open-ended. The actualization of a legislation should however, not be conceived as a satisfactory response to the yet to be heard struggle for determining privacy as a constitutional right.              

 Joshita Pai was a Fellow at the Centre for Communication Governance from 2015-2016

List of Petitions Tagged in the Aadhaar Matter

By Sarvjeet Singh & Joshita Pai

The Supreme Court has referred the issues of Aadhar and the larger issue of the right to privacy to a constitutional bench.

The Centre for Communication Governance at National Law University, Delhi has been tracking the case and is collecting various documents relating to it.

The details of various petitions and other information regarding the cases is available below. (The table is not exhaustive as we are still collecting information)

If you have any information or copy of petitions or submissions please mail them to or

S. No. Number & Title of the Case Advocate on Record Senior Advocate
1. WP (C) No. 494/2012

Justice K.S. Puttaswamy (Retd.) & Anr. v. Union of India & Ors.

Mr. Anish Kumar Gupta Mr. Soli Sorabjee
2. Transfer Case (Civil) No. 151/2013

S. Raju v. The Deptt. of Finance Reps. by Secy & Ors.

Mrs. Geetha Kovilan  
3. TP (C) No.152/2013

Vickram Crishna & Ors. v. UIDIA & Ors.

Mr. Rahul Narayan Ms. Meenakshi Arora
4. WP (C) No. 829/2013

S.G Vombatkere & Anr. v. UOI & Ors.

M/s. K.J. John & Co. Mr. Shyam Divan
5. WP (C) No. 833/2013

Aruna Roy & Anr. v. UOI & Ors.

M/s. Meharia & Company Mr. P.S. Narsimha (recused after being appointed an ASG)


6. WP (C) No. 932/2013

Nagrik Chetna Manch v. UOI & Ors.

Dr. Abhishek Atrey, Adv. Mr. Jayant Bhushan
7. TP (C) No. 312/2014

Indian Oil Corp. Ltd & Ors. v. Ashok Kumar Paikaray & Ors.

M/s. Meharia & Company  
8. TP (C) No. 313/2014

Indian Oil Corp. Ltd & Ors. v. All Orissa Consumer Protection Council & Ors.

M/s. Meharia & Company  
9. WP (C) No. 37/2015

Mathew Thomas v UOI & Ors.

Ms. Aishwarya Bhati Mr. Gopal Subramanium
10. WP (C) NO. 220/2015

S.G. Vombatkere & Anr. v. UOI & Ors.

M/s. K. J. John & Co.  
11. TP (C) No. 921/2015

UOI & Anr. v. Sri. V. Viswanadham & Ors.

Mr. D. S. Mahra Mr. A.K. Sanghi