This is a record of the proceedings in the Supreme Court bench hearings on the Constitutional validity of Aadhaar, which began on Feb 13, 2018. You may read the previous days’ proceedings here: Day 1Day 2Day 3Day 4Day 5Day 6Day 7Day 8Day 9, Day 10, Day 11, Day 12, Day 13Day 14Day 15Day 16., Day 17Day 18, Day 19, Day 20, Day 2Day 22, Day 23, Day 24 and Day 25.

Attorney General, K.K Venugopal resumed his submissions explaining retrospective saving of Acts. He said Section 59 of the Aadhaar act provides retrospective effect. he cited cases to show that a particular action can be validated by a subsequent Act, as it happened in the case of Aadhaar.

The AG read out the third version of the Aadhaar enrollment form and said it’s free and voluntary and has provisions for taking informed consent.

Justice Chandrachud said that the first two forms did not have any reference to biometrics. It was only inserted in the third form. The AG argued that the first two forms were hardly used because the government had only mandated enrollment of 1cr individuals.

The AG said that the CBI had gone to Bombay high court to obtain biometrics in connection of a rape when UIDAI refused to provide biometric data, as the data cannot be shared without the individual’s consent.

The AG read out from Justice Chandrachud’s part of the Puttaswamy judgement about “reasonable expectation of privacy”.  He said that the state has no interest in collection of biometrics except for the benefit of the individual himself. He emphasized that the invasion of privacy is minimal.

The AG said that when there was no right to privacy, the government acted in a bonafide manner when they enacted Aadhaar. Therefore that action cannot be said to be void by retrospective action. (MediaNama’s comment: “When there was no right to privacy”? The 9 judge bench of the Supreme Court affirmed privacy as a fundamental right when the government disputed it. The right wasn’t created because of the judgment!)

Justice Chandrachud said that the question of privacy was irrelevant in MP Sharma. Only the first part of  the Kharak Singh judgment affirmed that there’s a right to privacy. The subsequent judgements that affirmed privacy relied on the first part of kharak Singh.

The AG did not agree with this interpretation. There was some discussion on excessive delegation.

The Bench rose for lunch and reassembled at 2:30pm.

The AG resumed his submissions. He cited some cases on excessive delegation.

Justice Chandrachud remarked that section 2(g) of the Aadhaar act is not so much a question of delegation of legislative power but more about proportionality.

ASG Tushar Mehta began his submissions on behalf of UIDAI. The challenge to section 139aa was examined by the Supreme Court, he said. Apart from right to privacy, all other aspects were considered. He said that the issue of PAN/Aadhaar linkage has already been considered exhaustively by the Court in Binoy Viswam case. He said that in the privacy (Puttaswamy) judgment, the Court has held that privacy can be subject to reasonable restrictions and that all nine judges have affirmed that right to privacy is not absolute.

The ASG said that Justice Chandrachud laid down the three tests under which privacy can be invaded in particular cases. Five out of nine judges have upheld the principles of legitimate state interests and proportionality.

The ASG said that even in Binoy Viswam’s case, all these tests have been examined, although in the context of Article 19. He said that a legislation has to pass all four tests to be valid. Three laid down in Puttaswamy and also the test of manifest arbitrariness (Shayra Bano judgment). He said that another ground for valid restriction is that of “larger public interest.”

The CJI said that there is not much difference between legitimate state interest and larger public interest – satisfying legitimate state interests is enough to prove larger public interest.

The ASG said that the larger public interest in linking is preventing income tax fraud, black money, and terrorism. he said that since 1989, PAN numbers are mandatory. All demographic information that is now required under Aadhaar was required since 1989 under section 139a of the income tax (for obtaining PAN) including left hand thumb impression.

The Bench pointed out that that’s for people who can’t sign. The ASG said that the point is that people were giving thumb impression.

Justice Sikri said that in any case, this thumb impression is only on the form, and that is the difference.

The ASG said that now they are digitally stored.

Justice Chandrachud added that there’s no collection of biometrics and there’s no authentication taking place.

The ASG said that with respect to privacy, this regime has been in place since 1989. He said that the requirement of Aadhaar is to ensure deduplication through a robust technological regime. There is empirical data to show the larger public interest. He claimed that the coverage of Aadhaar is more than 99% and that Aadhaar being unique, deduplication is more systematic.

The ASG said that those who have already taken PAN do not have any legitimate interest in withholding information that they have already provided for obtaining PAN. He said that Aadhaar will prevent duplicate PAN nos. He said multiple PAN cards cause black money, money laundering and shell companies. In 2006, a large number of PANs were found to be duplicate. This problem still exists. 11.35 lakh cases of fraudulent PANs have been detected.

The ASG said that the Income Tax Act applies only to taxpayers. Aadhaar can be used to ensure one PAN to one individual. He quoted the Shah Committee SIT on black money which recommended interconnection of databases and a central KYC registry. He said that Aadhaar can achieve this through a federated architecture without aggregating information.

The ASG said that existing IDs on the basis of which PAN is issued can be forged. The use of biometrics will not allow this. He said even companies need pan cards.  He said that fake PAN cards have facilitated the growth of large shell companies who have fake shareholders who open numerous bank accounts with fake ID cards. He said he has data to show how linking has helped solve the problem.

The ASG said that demographic details are not enough. Uniqueness of PAN is important. There are multiple PANs allotted to one person, and one person has several PANs. Verification of original documents is only 0.02%. For Aadhaar the verification is 100%. It is a robust way of deduplication. Hundred percent verification is possible with Aadhaar as biometrics and Iris scans will be used.

The ASG said that duplicate Aadhaars are almost non-existent. He discussed various frauds involving PANs. He described a case in Gujarat. This case involved the creation of bogus DEMAT accounts through use of other people’s photograph. He gave an example of how a lady created 3000 bogus demat accounts by obtaining people’s photographs. He said that with Aadhaar, enforcement agencies can Red flag and prevent such transactions in the future.

The ASG discussed more cases of frauds involving multiple PANs and shell companies. He said that in 2009, there were plans for a biometric PAN, but then Aadhaar came in, so those plans were dropped.  He talked about widening the tax base. He quoted statistics on the difference between PAN cards and tax base from a CAG report.

Justice Sikri said that this difference may not simply be because of duplicates as a lot of transactions need a PAN. It is the only basis for this assessment orders – because they are often set aside. The figures do not reveal how much of this difference is caused by duplicate PANs.

The ASG said that he will check.

Justice Chandrachud said that the same ingenuity for PAN scams can happen with Aadhaar.

The ASG said that no system can be foolproof. They are trying to make it better.

Justice Chandrachud said that we are always trying to stay one step ahead of the lawbreakers.

The ASG said that if we have a better technology, we must implement it. He said that technology is being upgraded on a daily basis. The tax to GDP ratio is very low. He read out various figures to show this. He said that the Finance minister has described financial frauds in his February speech. Also our tax collection is very low in our GDP ratio. We are a largely tax non compliant country and the burden of people who evade taxes falls on honest tax paying citizens. He said that “on a lighter note”, this also applies to people claiming their “privacy.”

The ASG talked about India’s obligations under international legal instruments such as the FATCA and the CRS. He said that fake PANs will create a major embarrassment for the country with respect to international obligations. He said that these are all the justifications for linking PAN with Aadhaar.

17.4 cr out of 36 cr tax payers have already linked their Aadhaar with pan, said ASG. Even transgenders are included without having to disclose their gender.

The ASG said that in Binoy Viswam’s case, the Court has dealt with all these issues. Even though the court did not deal with privacy in that case, the court applied all the tests that are used to test privacy violations.

Justice Bhushan said that he will have to prove there’s no violation of privacy.

The ASG claimed that effectively the privacy judgment retrospectively ratifies the Binoy Viswam judgment and that the current Bench is not sitting in appeal over that judgment. Therefore, the observations in that case cannot be reopened. (Binoy Viswam was decided by Sikri and Bhushan JJ who are also on this bench. This is the Aadhaar PAN judgment from last July.)

The Court rose for the day. The Additional Solicitor General Tushar Mehta will continue submissions on behalf of the UIDAI at 11:30am on the 11th April 2018.

Summary of hearing based on tweets by Prasanna S, Gautam Bhatia and SFLC.