Supreme Court Upholds Aadhaar Act with Key Modifications: Balancing Privacy and Welfare (26 September 2018)

LEGAL ISSUE: Constitutional validity of the Aadhaar Act, 2016 and its impact on the Right to Privacy.

CASE TYPE: Constitutional Law, Public Interest Litigation

Case Name: JUSTICE K.S. PUTTASWAMY (RETD.) AND ANOTHER VERSUS UNION OF INDIA AND OTHERS

Judgment Date: 26 September 2018

Introduction

Date of the Judgment: 26 September 2018

Citation: (2017) 10 SCC 1

Judges: Dipak Misra, CJI, A.K. Sikri, J. and A.M. Khanwilkar, J. (Majority Opinion by A.K. Sikri, J. and concurring opinions by Dipak Misra, CJI and A.M. Khanwilkar, J.)

Can a unique identification system balance the need for efficient governance with the fundamental right to privacy? The Supreme Court of India recently grappled with this complex question in a landmark judgment concerning the Aadhaar Act, 2016. This case has evoked intense debate, with passionate arguments on both sides. The Court’s decision attempts to strike a balance between the state’s objectives and individual liberties.

The core issue was whether the Aadhaar Act, which mandates a unique identification number for Indian residents, infringes upon their fundamental right to privacy, as guaranteed under Article 21 of the Constitution. The petitioners argued that the Act enables state surveillance, infringes on individual autonomy, and is not backed by a valid law. The respondents, on the other hand, contended that Aadhaar is essential for efficient governance and targeted delivery of welfare benefits, and that sufficient safeguards are in place to protect citizens’ data.

The judgment was delivered by a five-judge Constitution Bench, with the majority opinion authored by Justice A.K. Sikri, and concurring opinions by Chief Justice Dipak Misra and Justice A.M. Khanwilkar.

Case Background

The Aadhaar scheme began in 2006 as a project for Below Poverty Line (BPL) families. The Unique Identification Authority of India (UIDAI) was established in 2009 to implement the scheme. Over time, the use of Aadhaar numbers increased, leading to the enactment of the Aadhaar Act in 2016. The Act was challenged on the grounds that it violated the fundamental right to privacy.

Timeline

Course of Proceedings

The Aadhaar scheme was challenged through a series of writ petitions, primarily on the grounds that it violated the right to privacy. The matter was referred to a Constitution Bench, which in turn referred it to a nine-judge bench. The nine-judge bench unanimously declared that the right to privacy is a fundamental right under the Constitution. Several interim orders were passed by the Court to ensure that Aadhaar was not made mandatory, and that no person was deprived of benefits for not possessing an Aadhaar number.

Legal Framework

The Aadhaar Act, 2016 aims to provide for “good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services” to individuals residing in India by assigning them unique identity numbers.

Section 2(a) of the Aadhaar Act, 2016 defines “Aadhaar number” as “an identification number issued to an individual under sub-section (3) of Section 3”.

Section 2(g) of the Aadhaar Act, 2016 defines “biometric information” as “photograph, finger print, Iris scan, or such other biological attributes of an individual as may be specified by regulations”

Section 2(k) of the Aadhaar Act, 2016 defines “demographic information” as “includes information relating to the name, date of birth, address and other relevant information of an individual, as may be specified by regulations for the purpose of issuing an Aadhaar number, but shall not include race, religion, caste, tribe, ethnicity, language, records of entitlement, income or medical history”.

Section 7 of the Aadhaar Act, 2016 states that “The Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India, require that such individual undergo authentication, or furnish proof of possession of Aadhaar number or in the case of an individual to whom no Aadhaar number has been assigned, such individual makes an application for enrolment: Provided that if an Aadhaar number is not assigned to an individual, the individual shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service.”

Section 8 of the Aadhaar Act, 2016 deals with authentication of Aadhaar number.

Section 29 of the Aadhaar Act, 2016 imposes restrictions on sharing information.

Section 30 of the Aadhaar Act, 2016 deems biometric information to be sensitive personal information.

Section 32 of the Aadhaar Act, 2016 provides that the Authority shall maintain authentication records.

Section 33 of the Aadhaar Act, 2016 provides for disclosure of information in certain cases.

Section 57 of the Aadhaar Act, 2016 states that “Nothing contained in this Act shall prevent the use of Aadhaar number for establishing the identity of an individual for any purpose, whether by the State or any body corporate or person, pursuant to any law, for the time being in force, or any contract to this effect: Provided that the use of Aadhaar number under this section shall be subject to the procedure and obligations under Section 8 and Chapter VI.”

Section 59 of the Aadhaar Act, 2016 is a saving clause, which states that “Anything done or any action taken by the Central Government under the Resolution of the Government of India, Planning Commission bearing Notification Number A-43011/02/2009-Admin. I, dated the 28th January, 2009, or by the Department of Electronics and Information Technology under the Cabinet Secretariat Notification bearing Notification Number S.O. 2492(E), dated the 12th September, 2015, as the case may be, shall be deemed to have been validly done or taken under this Act.”

The Aadhaar (Enrolment and Update) Regulations, 2016, The Aadhaar (Authentication) Regulations, 2016, The Aadhaar (Data Security) Regulations, 2016, and The Aadhaar (Sharing of Information) Regulations, 2016 were also discussed.

Arguments

The petitioners argued that the Aadhaar project and the Aadhaar Act violate fundamental rights, including the right to privacy, by enabling state surveillance, diminishing individual autonomy, and making access to basic services conditional upon mandatory Aadhaar enrollment. They contended that the Act allows private entities to collect and use sensitive personal information, that the biometric data is unreliable, and that the Act was passed as a Money Bill to bypass the Rajya Sabha.

The respondents, on the other hand, argued that the Aadhaar Act serves a legitimate state aim of targeted delivery of financial and other subsidies, benefits, and services. They submitted that the Act provides adequate safeguards for data protection and that the Aadhaar system is not designed for mass surveillance. They also argued that the Aadhaar Act is a Money Bill under Article 110 of the Constitution, and that the decision of the Speaker of the Lok Sabha on this matter is final.

Submissions

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

• Whether the Aadhaar project creates or has a tendency to create a surveillance state?
• Whether the Aadhaar Act violates the right to privacy?
• Whether children can be brought within the ambit of Aadhaar?
• Whether certain provisions of the Aadhaar Act and Regulations are unconstitutional?
• Whether the Aadhaar Act defies the concept of limited government, good governance, and constitutional trust?
• Whether the Aadhaar Act could be passed as a Money Bill?
• Whether Section 139AA of the Income Tax Act, 1961 is violative of the right to privacy?
• Whether the Prevention of Money Laundering Rules mandating linking of bank accounts with Aadhaar are unconstitutional?
• Whether the circular mandating linking of mobile phones with Aadhaar is illegal and unconstitutional?
• Whether certain actions of the respondents are in contravention of the interim orders passed by the Court?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Court relied on several judgments and legal provisions, which are categorized below:

Ratio Decidendi

The Supreme Court upheld the constitutional validity of the Aadhaar Act, 2016, with certain modifications. The key principles established in this case are:

• Right to Privacy: The Court reiterated that the right to privacy is a fundamental right, but it is not absolute and can be restricted by a law that is fair, just, and reasonable.
• Proportionality Test: The Court applied the proportionality test to determine whether the Aadhaar Act was a reasonable restriction on the right to privacy. The test requires that the measure should be legitimate, necessary, and proportionate.
• Legitimate State Aim: The Court recognized that the Aadhaar Act serves a legitimate state aim of targeted delivery of welfare benefits and good governance.
• Minimal Data Collection: The Court emphasized that the Aadhaar system should collect minimal data necessary for its purpose and that the data should be protected from misuse.
• Voluntary Enrollment: The Court held that Aadhaar enrollment should be voluntary, and no person should be denied benefits for not possessing an Aadhaar number.
• Money Bill: The Court held that the Aadhaar Act was wrongly passed as a Money Bill and that the decision of the Speaker of the Lok Sabha is not final on this matter.

Decision

The Supreme Court upheld the Aadhaar Act, 2016, subject to the following modifications:

• Section 57 Struck Down: Section 57 of the Aadhaar Act, which allowed private entities to use Aadhaar for verification purposes, was struck down as unconstitutional.
• Authentication Records: The Court clarified that authentication records cannot be stored for more than six months.
• Children’s Enrollment: Aadhaar enrollment for children was made voluntary and requires parental consent.
• Mobile Linking: The Court held that linking mobile phone numbers with Aadhaar is unconstitutional.
• Bank Account Linking: The Court held that linking bank accounts with Aadhaar is unconstitutional.
• Section 139AA of Income Tax Act: The Court upheld Section 139AA, but clarified that it cannot be used to deny PAN cards or tax benefits to those who do not have Aadhaar.

Flowchart of the Decision

Dissenting Opinion

Justice D.Y. Chandrachud delivered a dissenting opinion, wherein he held that the Aadhaar project and the Aadhaar Act are unconstitutional. He argued that the Act violates the fundamental right to privacy and creates a surveillance state. He also held that the Act was wrongly passed as a Money Bill.

Ratio of the Judgement

The ratio of the judgement is as follows:

Conclusion

The Supreme Court’s judgment on the Aadhaar Act is a landmark decision that attempts to balance the state’s need for efficient governance with the fundamental rights of its citizens. The Court upheld the Aadhaar Act, but with significant modifications to ensure that the right to privacy is not unduly infringed upon. The judgment also clarified that the Aadhaar Act was wrongly passed as a Money Bill. The Court’s decision reflects the importance of judicial review in a democracy and the need to protect individual liberties from state overreach.

Implications of the Judgement

The judgment has significant implications for the Aadhaar project and the use of Aadhaar in India. The key implications are:

• Privacy Protection: The judgment has strengthened the protection of individual privacy by limiting the use of Aadhaar to government schemes and services.
• Private Entities: Private entities are no longer allowed to use Aadhaar for verification purposes.
• Voluntary Enrollment: Aadhaar enrollment is now voluntary, and no person can be denied benefits for not having an Aadhaar number.
• Data Protection: The judgment has emphasized the need for data protection and security in the Aadhaar system.
• Parliamentary Procedure: The judgment has clarified the procedure for passing a Money Bill and the limits on the Speaker’s powers.

Impact of the Judgement

The impact of the judgment has been far-reaching. It has led to a re-evaluation of the Aadhaar project and the way it is used by the government and other entities. The judgment has also raised awareness about the importance of privacy and data protection.

Critical Analysis

The judgment is a landmark decision that has balanced the state’s need for efficient governance with the fundamental rights of its citizens. The Court has taken a pragmatic approach to the issue and has tried to ensure that the Aadhaar project is not used to create a surveillance state. The judgment is also a reminder of the importance of judicial review in a democracy.

However, the judgment has also been criticized by some for not going far enough in protecting individual privacy. Some have argued that the Aadhaar system is still vulnerable to misuse and that the government should not be allowed to collect so much personal data.

Further Developments

Following the judgment, the government has taken steps to implement the Court’s directions and to ensure that the Aadhaar system is used in a manner that is consistent with the fundamental rights of citizens. The government has also introduced new laws and regulations to protect personal data.