Finance firms fear rising costs

Getting new clients on board will be more expensive now, feel financial technology firms, after the SC on Wednesday struck down Section 57 of the Aadhaar Act.

This section earlier allowed them to ask for a customer’s biometric identification number for e-KYC verification. DEBASIS MOHAPATRA & ROMITA MAJUMDAR write

Even as the five-judge Supreme Court (SC) Bench headed by Chief Justice Di pa kM is ra declared Aadhaar constitutional by a majority verdict, Justice DY Chandrachud wrote a strong dissenting note, saying the Aadhaar Act could not have been passed as a money Bill and that this amounted to a fraud on the Constitution.

Chandrachud said the power of the Lok Sabha Speaker to decide whether a Bill isa money Bill ,“can not be untrammelled”. He described the bypassing of the Rajya Sabha in 2016 as “subterfuge”.

“This debasement of a democratic institution cannot be allowed. The Aadhaar Act is in violation of Article 110 and, therefore, is liable to be declared unconstitutional,” he said.

Commenting on the nature of the UIDAI, he said the Aadhaar Act allowed discretionary powers. The UIDAI can, at any point, expand its powers and even start collecting blood samples of individuals, he added.

“The definitions of these sections provide the government with unbridled powers to add to the list of biometric details that the UIDAI can require a citizen to part with during enrolment which might even amount to an invasive collection of biological attributes including blood and urine samples,” he said, referring to Sections 2(g), (j), (k), and (t) of the Aadhaar Act.

Chandrachud added the collection of data could lead to individual profiling. He also said on this point when discussing the use of identity document by private entities.

“Even an entity like the enrolment operator (with a software hack) could upload someone else’s biometrics against another person. Denial of access to the individual violates a fundamental principle of data protection: ownership of the data must at all times vest with the individual. Overlooking this fundamental principle is manifestly arbitrary and violative of Article 14,” he wrote.

The judge favoured deletion of consumer data by companies. He said mobile phones were important and its seeding with Aadhaar was a grave threat to privacy.

THIS DEBASEMENT OF A DEMOCRATIC INSTITUTION CANNOT BE ALLOWED TO PASS. INSTITUTIONS ARE CRUCIAL TO DEMOCRACY. DEBASING THEM CAN ONLY CAUSE A PERIL TO DEMOCRATIC STRUCTURES. THE AADHAAR ACT IS IN VIOLATION OF ARTICLE 110 AND, THEREFORE, IS LIABLE TO BE DECLARED UNCONSTITUTIONAL”

D Y CHANDRACHUD Supreme Court judge