Is Aadhaar use by private firms lawful, asks Supreme Court

NEWDELHI: The Supreme Court on Wednesday questioned the use of Aadhaar by private companies, saying that if the 12-digit biometric number was meant for disbursing welfare benefits to the underprivileged, to allow nonstate entities to utilize it for offering services to citizens would be beyond the mandate of the underlying law, the Aadhaar Act .

A constitution bench led by chief justice Dipak Misra made the remarks during the hearing of petitions challenging the validity of Aadhaar Act and around 40 government notifications. Other judges on the bench are justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan. The remarks do not constitute a final opinion of the top court in the case.

Justice Chandrachud wondered whether the use of Aadhaar by private companies would be in sync with the objective of the law. “The area of concern is section 57 (of the law),” the judge told Attorney General KK Venugopal, who defended the passage of the Aadhaar law as a Money Bill in 2016.

GOVT HAS PERMITTED PHONE COMPANIES, BANKS TO ASK FOR AADHAAR NUMBERS UNDER SECTION 57 OF THE AADHAAR ACT

The government has permitted private entities such as telephone companies and banks to ask for Aadhaar numbers under Section 57 of the Aadhaar Act.

According to Section 57, “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 anybody corporate or person, pursu- ant to any law, for the time being in force, or any contract to this effect.” Venugopal said the law provided for targeted delivery of subsidies, benefits and services, the expenditure for which was incurred from the Consolidated Fund of India and hence it was rightly introduced and passed as a Money Bill. There were 300 million people in India living below the poverty line, Venugopal said, adding that several schemes meant for such citizens did not reach them because of corruption. “Much was going to the middlemen. Aadhaar has helped check corruption,” the AG said. He quoted section 7 that makes it mandatory to provide proof of the Aadhaar number as a necessary requirement for receipt of certain subsidies, benefits and services.

It was at this stage that Justice Chandrachud raised questions about private entities using Aadhaar. “It may not have nexus with the objective sought to be achieved by the Act. Regarding section 7 you are right. But the problem arises in section 57.”

Venugopal said preventing terrorism, detecting black money and money laundering were issues, which the government was keen to address through Aadhaar. “This is a legitimate state interest,” he told the bench.

Justice Chandrachud didn’t seem convinced: “So long there was a nexus with the Consolidated Fund of India, it was fine but allowing corporate bodies to use Aadhaar went far beyond the mandate of the Aadhaar Act.”

By introducing the Aadhaar bill as a money bill, the government ensured that it wasn’t handicapped by its strength in the Rajya Sabha, where the ruling NDA was in a minority. This is because money bills can be introduced only in the Lok Sabha, where the government enjoyed a majority.