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A Constitution Bench of the Supreme Court, led by Chief Justice of India by a 4:1 majority upheld the validity of Aadhaar but with certain caveats IN 2018.

What is Aadhaar?

• 12 digit biometric-based individual identification number managed by Unique Identification Authority of India (UIDAI) under Ministry of Communications/IT. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 establishes Unique Identification Authority of India (UIDAI), Prior to the enactment of the Act, the UIDAI had functioned, since 28 January 2009, as an attached office of the Planning Commission (now NITI Aayog). following are key functions of UIDAI–

o Specifying demographic and biometric information to be collected during enrolment

o Assigning Aadhaar numbers to individuals

o Authenticating Aadhaar numbers

o Specifying the usage of Aadhaar numbers for delivery of subsidies and services

• Proof of identity, proof of residence and now also financial address for its residents.

• Any Resident can get Aadhaar. However, it is not a proof of citizenship.

• Information collected for enrolment in Aadhaar Database

o Demographic information such as Name, Date of Birth, Gender, Address, Parent/Guardian details, Contact details (phone, e-mail etc).

o Biometric Information required: Photo, 10 Finger Prints, Iris.

• The Aadhaar number, the demographic and biometric information (called identity information) is together stored in the Central Identities Data Repository as mandated by the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2017.

• Expenditure for the nationwide Aadhaar exercise is incurred from the Consolidated Fund of India.

Highlights of the Verdict

• Constitutionality of Aadhaar: Aadhaar scheme passed the triple test laid down in the Puttaswamy (Privacy) judgment 2017 to determine the reasonableness of the invasion of privacy (under Art 21) i.e.

o Existence of a law - backed by the statute

i.e. the Aadhaar Act, 2016.

o A legitimate state interest – ensuring social benefit schemes to reach the deserving and poor.

o Test of proportionality - balances benefits of Aadhaar and the potential threat it carries to the fundamental right to privacy.

• No fear of Surveillance state: Provisions of the Aadhaar Act “do not tend to create a surveillance state”.

o Aadhaar collects minimal biometric data in the form of iris and fingerprints, and the Unique Identification Authority of India (UIDAI) — which oversees the Aadhaar enrolment exercise — does not collect purpose, location or details of the transaction.

• Security of the biometric data: UIDAI has mandated only registered devices to conduct biometric-based authentication transactions.

o There is an encrypted, unidirectional relationship between the host application and the UIDAI. This rules out any possibility of the use of stored biometric, or the replay of biometrics captured from another source.

o Further, as per the regulations, authentication agencies are not allowed to store the biometrics captured for Aadhaar authentication.

• Linking of Aadhaar with Financial transactions: The rules which made linking of bank accounts and all other financial instruments with Aadhaar mandatory, is declared unconstitutional.

• Aadhaar Act as Money Bill: Section 7 being the main provision of the Act, the Supreme Court has upheld the validity of the Aadhaar Act being passed as a Money Bill.

o Section 7 of the Aadhaar Act, demands for Aadhaar based authentication to receive a subsidy, benefit or service etc. It is very clearly declared in this provision that the expenditure incurred in respect of such a subsidy, benefit or service would be from the Consolidated Fund of India.

• On a similar issue, the court has upheld the validity of Section 59 that also validates all Aadhaar enrolment done prior to the enactment of the Aadhaar Act, 2016. The court has said that since enrolment was voluntary in nature, those who specifically refuse to give consent would be allowed to exit the Aadhaar scheme.

Sections Declared Unconstitutional by Supreme court

Section 33(1)&Section 33(2)

Violated the protection against self- incrimination as enshrined under Article 20(3) of the Constitution of India. Did not given an opportunity of hearing to the concerned individual whose information is sought to be released by the UIDAI pursuant to the Court’s order. This is contrary to theprinciples of natural justice.

Section 47

Did not allow an individual citizen, whose rights have been violated under the Act, to initiate the criminal process. Only UIDAI was allowed. Any individual will now be allowed to file a complaint if he/she feels their data has been compromised.

Section 48

Permitted the central government to take over UIDAI in case of a ‘public emergency’.Termed as vague & arbitrary in absence of any holistic definition of ‘public emergency’.

Section 57

Allowed an unrestricted extension of the Aadhaar platform to users who may be Government agencies or private sector operators.Gave the Act much wider scope than what may legitimately be considered as a Money Bill.Enabled the seeding of the Aadhaar number across service providers and thereby enabled the establishment of a surveillance state.Allowing corporate bodies and individuals to also seek authentication– only on the basis of a contract & not a law - would impinge upon anindividual’s right to privacy.

Aadhaar Regulations

Regulation 26(c) allowed UIDAI to store metadata relating to transactions. Struck down in present


In 1999 after the Kargil war, the Kargil Review Committee, headed by security analyst K. Subrahmanyam, was formed to study the state of national security. It submitted its report to the then Prime Minister, Atal Bihari Vajpayee, on 7 January 2000. Among its various recommendations was the proposal that citizens in villages in border regions be issued identity cards on a priority basis, with such ID cards issued later to all people living in border states.

The Rangarajan Commission set up to revamp the statistical system in India in 2000 recommended under the Socio-economic statistics chapter the setting up of a centralized database of citizens in India. The Commission in its analysis noted under para 9.2.26 as "9.2.26 Many developed countries and an increasing number of developing countries, including China, have databases of their citizens while also providing for each adult individual citizen of the country a unique identification number.

A Group of Ministers (GoM), headed by L. K. Advani, was formed to study the recommendations and examine possible implementation. The GoM submitted its report in May 2001 in which it accepted the recommendation for an ID card and stated that a "multi-purpose National Identity Card" project would be started soon, with the card to be issued first in border villages and then elsewhere.

In late September 2001 the Ministry of External Affairs proposed that a mandatory national identity card be issued. This announcement followed reports that some people had obtained multiple Indian passports with different details. This was attributed to the lack of computerisation between the passport centres.

In December 2003 the Citizenship (Amendment) Bill 2003 was introduced in the Lok Sabha by L. K. Advani. It primarily aimed to provide various rights to persons of Indian origin, but the bill also introduced Clause 14 (a) that said: "The Central Government may compulsorily register every citizen of India and issue national identity card to him."


The UIDAI was established on 28 January 2009 after the Planning Commission issued a notification. On 23 June Nandan Nilekani, the co-founder of Infosys, was appointed by the then-government, UPA, to head the project. He was given the newly created position of Chairman of the UIDAI, which was equivalent in rank to a Cabinet minister. In April 2010 the logo and the brand name Aadhaar was launched by Nilekani.

On 26 November 2012 Prime Minister Manmohan Singh launched an Aadhaar-linked direct benefit transfer scheme. The project aimed to eliminate leakages in the system by directly transferring the money to the bank account of the recipient. The project was to be introduced in 51 districts on 1 January 2013 and then slowly expanded to cover all of India.

On 9 October 2013 the National Payments Corporation of India launched an Aadhaar-based remittance system. Using the system, funds could be transferred to any Aadhaar-linked bank accounts if the Aadhaar number was known.

On 5 July 2015, finding the experience with DBT scheme in LPG "very encouraging", with a reported savings of ₹127 billion (US$1.8 billion) to the public exchequer this year.

In March 2015 the Aadhaar-linked DigiLocker service was launched, using which Aadhaar-holders can scan and save their documents on the cloud, and can share them with the government officials whenever required without any need to carry them.

1. The Aadhaar and other Laws (Amendment) Ordinance, 2019

The Aadhaar and other Laws (Amendment) Ordinance, 2019 Ministry: Law and Justice • Promulgated Mar 02, 2019 • The Aadhaar and Other Laws (Amendment) Ordinance, 2019 was promulgated on March 2, 2019. It amends the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, the Indian Telegraph Act, 1885, and the Prevention of Money Laundering Act, 2002. The Aadhaar Act provides targeted delivery of subsidies and benefits to individuals residing in India by assigning them unique identity numbers, called Aadhaar numbers. Previously, a similar Bill was passed by Lok Sabha on January 4, 2019. However, it will lapse with the dissolution of the 16th Lok Sabha.

Offline verification of Aadhaar number holder:

Under the Aadhaar Act, an individual’s identity may be verified by Aadhaar ‘authentication’. Authentication involves submitting the Aadhaar number, and their biometric or demographic information to the Central Identities Data Repository for verification. The Ordinance additionally allows ‘offline verification’ of an individual’s identity, without authentication, through modes specified by the Unique Identification Authority of India (UIDAI) by regulations.

• During offline verification, the agency must (i) obtain the consent of the individual, (ii) inform them of alternatives to sharing information, and (iii) not collect, use or store Aadhaar number or biometric information.

Voluntary use:

The Act provides for the use of Aadhaar number as proof of identity of a person, subject to authentication. The Ordinance replaces this provision to state that an individual may voluntarily use his Aadhaar number to establish his identity, by authentication or offline verification. The Ordinance states that authentication of an individual’s identity via Aadhaar, for the provision of any service, may be made mandatory only by a law of Parliament.

• The Ordinance amends the Telegraph Act, 1885 and the Prevention of Money Laundering Act, 2002 to state that persons with a license to maintain a telegraph, banking companies and financial institutions may verify the identity of their clients by: (i) authentication or offline verification of Aadhaar, (ii) passport, or (iii) any other documents notified by the central government. The client has the choice to use either mode to verify his identity and no person shall be denied any service for not having an Aadhaar number.

Entities using Aadhaar:

Under the Act, usage of Aadhaar number for establishing the identity of an individual, by the State or a body corporate under any law, is permitted. The Ordinance removes this provision. An entity may be allowed to perform authentication through Aadhaar, if the UIDAI is satisfied that it is: (i) compliant with certain standards of privacy and security, or (ii) permitted by law, or (iii) seeking authentication for a purpose specified by the central government in the interest of the State.

Aadhaar number of children:

The Ordinance specifies that at the time of enrolling a child to obtain an Aadhaar number, the enrolling agency shall seek the consent of his parent or guardian. The agency must inform the parent or guardian of the manner in which the information will be used, the recipients with whom it will be shared, and of their right to access the information. After attaining eighteen years of age, the child may apply for cancellation of his Aadhaar.

Disclosure of information in certain cases:

Under the Act, restrictions on security and confidentiality of Aadhaar related information do not apply in case the disclosure is pursuant to an order of a District Court (or above). The Ordinanceamends this to allow such disclosure only for orders by High Courts (or above).

• Further, under the Act, an officer not below the rank of a Joint Secretary may issue directions for disclosing information in the interest of national security. The Ordinance amends this to allow such disclosure on directions of officers not below the rank of a Secretary.


Under the Act, all fees and revenue collected by the UIDAI will be credited to the Consolidated Fund of India. The Ordinance removes this provision, and creates the Unique Identification Authority of India Fund. All fees, grants, and charges received by the UIDAI shall be credited to this fund. The fund shall be used for expenses of the UIDAI, including salaries and allowances of its employees.


Under the Act, courts can take cognizance of an offence only if the UIDAI registers a complaint. TheOrdinance amends this to allow the individual to register complaints in certain cases, including impersonation or disclosure of their identity.

• The Ordinance defines the Aadhaar ecosystem to include enrolling agencies, requesting agencies, and offline verification-seeking entities. It allows the UIDAI to issue directions to them if necessary for the discharge of its functions under the Act.


Under the Ordinance, the UIDAI may initiate a complaint against an entity in the Aadhaar ecosystem for failure to (i) comply with the Act or the UIDAI’s directions, and (ii) furnish information required by the UIDAI. Adjudicating Officers appointed by the UIDAI shall decide such matters, and may impose penalties up to one crore rupees on such entities. The Telecom Disputes Settlement and Appellate Tribunal shall be the appellate authority against decisions of the Adjudicating Officer.