Day 14 Arguments

Constitutionality of Aadhaar Act

March 6th 2018

The 5-Judge bench of the Supreme Court comprising CJI Dipak Misra, and AM Khanwilkar, DY Chandrachud, AK Sikri and Ashok Bhushan JJ continued hearing this case to decide the constitutional validity of the Aadhaar Act.


The arguments in the case before the Supreme Court over the span of 13 days has led to several key postulations being raised by three counsels – Mr. Shyam Divan, Mr. Kapil Sibal, and Mr. Gopal Subramanium against the Aadhaar Act. Today, the 14th day of arguments, saw Mr. Arvind Datar representing MG Devasahayam and other petitioners in this matter.


Mr. Arvind Datar and Mr. Shyam Divan began by requesting the court to extend deadline for Aadhaar linking. CJI promised to hear when AG is there in court.


Thereafter, Mr. Datar began arguments by laying down the key contours of his challenge:-
•    The Aadhaar Act could not have passed as a money bill.
•    Even if the Aadhaar Act is upheld, it cant go beyond subsidies.
•    The Aadhaar – PAN judgment (Binoy Visvam v UoI) should be revisited in light of Right to Privacy judgment (Puttaswamy v UoI)
•    All Notifications under S.7 of Aadhaar Act, PMLA Rules and Sec 139AA of Income Tax Act are under challenge.
•    All actions before the passing of Aadhaar Act cant be saved as they are outside the ambit and in violation of numerous court orders.


Mr. Datar cited the Rules under the PMLA (Prevention of Money Laundering Act) that makes Aadhaar-bank Account linking mandatory and a prerequisite for opening a bank account. He argued that the fact that the RBI Master Circular gives a choice of six IDs to open bank account, conflicts with the PMLA Rules, which make Aadhaar mandatory. When there is stringent due diligent and KYC norms which are followed while opening the account, so what is the need for making Aadhaar ID mandatory?

He cited Rule 9 of the PMLA which requires Aadhaar to be submitted within 6 months to prevent their account from being unoperational. This not only flies in the face of Supreme Court orders saying Aadhaar is voluntary, it also impedes people’s access to money, amounting to a deprivation of property under Art 300A.


On ground of equality, he contended that this statute violates all 3 tests of Article 14 – intelligible differentia, lack of valid classification as it treats unequals as equal, as well as arbitrariness. Chandrachud J pointed that only PMLA Rules have this implication and not the Aadhaar Act. To which, Mr. Datar replied that Sec. 57 of the Aadhar Act is the enabling provision through which Aadhaar is being made mandatory for any service including Banking operations. So, the arguments hold for both PMLA Rules and Aadhaar provisions.


He placed reliance on Lal Babu Hussein Case, where the Supreme Court held that Electoral Officer asking residents of a particular area en masse to prove their identity despite having electoral calls was unconstitutional.  He said that the State makes the similar assumption that all identity proofs are fake but Aadhaar.

He contended that what is a right under one Act (i.e. Section 7 of the Aadhaar Act making the Aadhaar voluntary) cannot be a duty in another Act (i.e. PMLA mandating Aadhaar linking) and this amounts to manifest arbitrariness.


The matter will be next heard on March 7th 2018.