Day 28 Arguments

Constitutionality of Aadhaar Act

April 12th 2018

On the 27th day of arguments, ASG Mr. Tushar Mehta had argued that the Aadhaar Act satisfied reasonableness and proportionality. He argued that the court must look at the balance of interests, and in the ‘larger public interest’ uphold the Aadhaar Act.


Today, he continued to defend the mandate that required linking Aadhaar with the bank account, to prevent money laundering. He argued that the Prevention of Money Laundering Rules are not going beyond the mandate of the Prevention of Money Laundering Act (PMLA). Here, Sikri J pointed out that the Rule (asking for Aadhaar-bank account linking) is being challenged on the ground of proportionality. He enquired about the need to make Aadhaar compulsory when there are other valid IDs available that can do the same. Mr. Mehta responded that Aadhaar card is being used to prevent impersonation as it was difficult to duplicate.


Then, Chandrachud J asked Mr. Mehta to answer Mr. Datar’s contentions – that the PMLA Rules go against the Act; that there is no provision under the PMLA to render an account that was opened legitimately, non-operational; that there is no need to extend Aadhaar linking to mutual funds and insurance policies. Sikri J added that it is not proportional to enable anyone to become a reporting entity under the PMLA. Mr. Mehta argued that the State is following a ‘zero tolerance policy’ on the issue of money laundering. Further, closing an account for not linking it with Aadhaar is not permanent. CJI Dipak Misra pointed out that blocking bank accounts for not linking with Aadhaar violates Article 300A. Mr. Mehta responded that this is a reasonable restriction.


Next, Chandrachud J asked if the penal consequence is authorized by the Act or the Rules. Mr. Mehta answered that the Rules are part of the Act, which is acceptable, as penal consequences are ancillary. Chandrachud J did not agree. Mr. Mehta went on to argue that freezing a bank account is not a penalty but just a consequence. Sikri J disagreed, and said that as it deprives someone of their property, it is penal. Mr. Mehta explained that the idea behind freezing bank accounts is to render the account of money launderers non-operational. Here, CJI Misra pointed out that the question is whether the consequence is mandated under law or an overreach.


Mr. Mehta argued that the scheme of PMLA seeks to implement zero tolerance to money laundering and curb black money. The ‘minor inconvenience’ to some citizens as a result of this endeavour is in the interest of the nation. He concluded his arguments by asking the Court to weigh public interest and ‘perceived privacy’ before taking a decision.


Thereafter, Mr. Rakesh Dwivedi began his arguments. He is arguing for the state of Gujarat. First, he said that the Government of India has ample means to carry out surveillance, and does not need Aadhaar for it. For instance, the CBI can monitor bank accounts. He argued that the petitioners are using rhetoric to rubbish the Aadhaar scheme.


Chandrachud J stated that technology is a very powerful enabler of mass surveillance. He pointed out that elections can be swayed with the use of data and technology. Mr. Dwivedi replied that Google and Facebook algorithms cannot be compared with UIDAI technology. To this, Chandrachud J said that the Act does not preclude UIDAI acquiring that kind of technology. Mr. Dwivedi responded that it is an offence under Section 33 of the Aadhaar Act. The only purpose of Aadhaar is authentication. There is no power to analyze data, under this Act. Even the metadata relates to authentication records and does not reveal anything about an individual. The metadata only consists of the details of the authentication request, the result of the authentication procedure, and the time of authentication. Justice Sikri said that this information is enough to reveal a lot about an individual. Mr. Dwivedi responded that the authentication request may show the place of authentication request (for example – Apollo hospital), but not the location from where it came. The identity of the person who has requested the authentication is also not revealed.


Chandrachud J asked about the requesting entity who can store the data, especially in the absence of a robust data protection law. He pointed out that commercial information about an individual is a ‘gold mine’. Thus, surveillance is not limited to its traditional definition. Further, storing fingerprint data in a central database for the purpose of authentication is a problem. To this, Mr Dwivedi responded that millions like him ‘do not care about privacy’. Even so, the biometric data is encrypted and data is not shared with anyone. The implementation and enforcement of the Aadhaar Act is an understandable concern, but there is no problem with the Act, and the technology used.


To assuage Chandrachud J’s concern about Section 29 and 57 which allows sharing of data with third parties, Mr. Dwivedi said that Section 29(b) must be read with Section 29(1), which prohibits that sharing of core biometric data. Chandrachud J said that the coverage of the Act going beyond Section 7 benefits is what concerns the court. Mr. Dwivedi argued that the Court can interpret the Act so as to make it reasonable. For instance, it can restrict the interpretation of Section 29(3) and exclude sharing of biometric information.


The arguments for the day concluded. Mr. Dwivedi will continue his arguments on April 17th 2018.

(This post relies on the contributions of Mr. Ayush Puri)