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 1, Day 2, Day 3, Day 4, Day 5, Day 6, Day 7, Day 8, Day 9, Day 10, Day 11, Day 12, Day 13, Day 14, Day 15, Day 16., Day 17, Day 18, Day 19, Day 20, Day 2, Day 22, Day 23, Day 24, Day 25 and Day 26.
The ASG, Tushar Mehta resumed his submissions on behalf of the UIDAI. He wanted to place reliance on Para 92 of the Binoy Viswam judgment as reported in 2017 7 SCC 59. He said theargument that the Aadhaar act was made in violation of interim orders of the Supreme Court is no longer open after the Binoy Viswam judgment when it clearly said 139AA is fully valid on that point and that the only thing open after Binoy Viswam is the challenge to Aadhaar under Article 21.
The ASG said that it has already been proved that Aadhaar linking with PAN will help curb money laundering and black money, and prevent tax evasion. This question was not open to challenge anymore as it has already been decided by the Court. He continued reading the Binoy Viswam judgment that deals with how interim orders were passed when Aadhaar Act did not exist and claimed that it did not preclude Parliament from enacting 139AA. He next read the paras 103 and 104 of Binoy Viswam which found rational nexus of 139AA with the object sought to be achieved. He said that this “rational nexus” is a facet of proportionality.
The ASG said Balancing of interests is also a facet of test of proportionality, which was propounded in the judgement of Modern Dental College. He wanted to point out the gain to the nation because of Aadhaar.
The ASG said four tests of proportionality of a law. 1. Public purpose. 2. Measures have rational nexus with the purpose. 3. Necessity of the measure. 4. No lesser alternative measure available. He said the measure should be justifiable as reasonable and necessary in a democratic society.
The ASG read paras 124 and 125 of the Binoy Viswam judgement which answers whether Aadhaar PAN linking is in public interest and satisfies the test of proportionality and reasonableness. He said Binoy Viswam tested proportionality and upheld the provisions. He read parts in Binoy Viswam that extracts from “An Uncertain Glory: India and its Contradictions” written by Prof. Amartya Sen and Prof. Jean Dreze on widening inequality and corruption in India that prevents benefits from reaching the rightful beneficiaries. He said that India is far behind sustainable development when compared to China and other South Asian nations. (Recall that Prof.Dreze has filed affidavits in this case against Aadhaar!)
The ASG read parts in Binoy Viswam that quote the Shah Committee (SIT on Black Money) recommendations.He said that Aadhaar will help law enforcement curb terrorism.
The ASG read paragraph 130 of the Binoy Viswam judgement. He wanted to answer the question whether the entire population can he treated as criminals for Aadhaar. He quoted an American judgment that said screening airline passengers is an administrative service. It’s not to treat everyone as a terrorist but to safeguard the larger public.
Justice Sikri said that the facts in the American case cannot be compared to the facts in the present case of Aadhaar.
The ASG quoted more judgements on the American fourth amendment (search and seizure). He read US Court of Appeals judgments which suggest frisking or highway check points do not raise any individualized suspicion of criminality. This was in response to Petitioner arguments that Aadhaar is a general warrant of search without reasonable susipicion of individual wrongdoing.
Justice Chandrachud didn’t seem convinced about the relevance of these cases in the present case of Aadhaar.
The ASG said that he wanted to show that whenever there is a statutorily allowed intrusion of privacy it does not mean there’s presumption of guilt.
Justice Chandrachud said offences against terrorism or public health are at a different footing than fiscal statute. Proportionality will be of different nature.
The ASG said that he is not arguing on proportionality now, but only to suggest that just because information is collected, it does not mean a presumption of criminality.He said that there’s no random scrutiny of people in the name of Aadhaar. The exercise of linking Aadhaar with bank, phone etc is only done to weed out fake or duplicates. He mentioned the figure that 33,000 crore untaxed money has been found by PAN AADHAAR linking even on voluntary basis. (MediaNama: Source?)
The Bench rose for lunch, reassembled at 2:30pm.
The ASG said The immediate benefit from compulsory linking of PAN is that it helps the IT department in tracking tax evasion. He said that Analysis from linking shows that many people do not quote PAN for large transactions. 1.6 crore such transactions have been identified in the last two years. PAN of the person was there in the database but not in the form that he filed.
The ASG said IT Dept uses third party information to identity cases of defaulters. Rule 114b requires quoting of PAN to file returns. A person can easily say that they don’t have PAN and then evade taxes. He claimed that PAN-Aadhaar linkage will prevent this kind of tax evasion. (MediaNama: Unclear how. A person can have an Aadhaar and not have or still claim not to have a PAN.)
The ASG said 33K crores worth of transactions have been detected, and this is possible only through linking of PAN and Aadhaar. (MediaNama: Source?) He said that this clearly meets the test of proportionality.
The ASG said that a statutory measure should not be excessive with regard to the object it seeks to achieve and the Court should not second guess the legislature’s assessment of proportionality unless it’s shockingly disproportionate and needs no argument. He said that in a clash between privacy and other fundamental rights, the Court should look at the larger public interest.
The ASG said that as per the right to privacy judgment, prevention of crime and safeguarding revenue are legitimate aims of the State. He said the test of proportionality is applied, examined and recorded in Binoy Viswam.
The ASG read out some judgments of the Supreme Court on proportionality. His first judgment is PUCL v Union of India, which is on disclosure of assets by political candidates and their spouses. He said that in this case, it was held that disclosure served the right to information of the citizens, and that the right to privacy of spouses of political candidates had to be subordinated to the right to information, because it served the larger public interest. He said that if there’s a competition between right to privacy and the right to information of a citizen, the former has to be subordinated with the latter for the sake of larger public interest.
The ASG read another judgment, Rohit Shekhar vs Narayan Dutt Tiwari, on DNA testing to prove paternity wherein it was held that privacy is not absolute and can be invaded if there’s a larger medical interest. He said that in this case, even an extremely invasive procedure was upheld by the Court, and the right to privacy was subordinated.
The ASG then read out the Supreme Court’s 2016 judgment in Subramaniam Swamy vs Union of India upholding criminal defamation, which was authored by CJI Dipak Misra on the point of reasonable restrictions. He said that in this case the SC has held that the nature of social control has to be borne in mind when considering reasonableness. He read out the part of the judgment that talks about “qualified civil liberties.” and “The fair needs of the society and the nature of social control has to be kept in mind when enforcing reasonable restrictions.” He said that this case is about the right to privacy of the individual versus the need of the nation and that it is the duty of the Court to strike a balance to preserve values.
The ASG then quoted Mr. ‘X’ vs. Hospital ‘Z’ wherein privacy was upheld to be subordinate to right to information.
The ASG quoted Om Kumar v. Union of India where it was ruled that limitations on fundamental rights are constitutional if the measures taken are necessary and proportional.
The ASG said that the question is whether the legislature, while exercising its power of choice, has excessively infringed upon rights. In this case, that has in no way happened.
The ASG quoted Justice Sikri’s judgment in the Modern Dental case. He said that a law is proportionate if it has a legitimate purpose, has a rational connection with the goal, and is necessary. Generation of revenue, curbing black money and prevention of evasion of taxes is necessary and measures that need to be taken by the state for the same are proportional, said the ASG.
The ASG said that the right to extend my fist stops where your nose begins. The legislature decides this question. If the legislature stops him from moving his fist, that is disproportionate. But it is the legislature’s prerogative to decide whether it is 1 inch or 1 foot from the nose.
“The fourth amendment does not safeguard all expectations of privacy, but only ones that are reasonable,” quoted the ASG from an American judgement about urine testing for drugs. He said that this is the American context of privacy and state interest.
The ASG came to the European Convention of Human Rights. He said that the European Court of Human Rights in James v United Kingdom, it was held that compulsory transfer of property could in some circumstances be upheld as promoting the public interest. He also said that the right to privacy in the European convention of human rights is not absolute and can be curtailed for the purpose of national security.
Justice Sikri said that the doctrine of proportionality in the context of property law is not relevant in this case as those judgments stand on a different footing. The ASG said that in that case, he will skip this and move on.
The ASG came back to the position in the UK. He said that the legitimate State aim is very important. Justice Sikri said that nobody is disputing that.
The ASG said that some of the petitioners have tried to argue that the relevant standard is that of compelling state interest, but that is not required. Only a legitimate interest is enough. The Judges repeated that nobody is disputing this point.
The ASG said that legitimate state interest is enough and there is no need to prove compelling state interes. He said the word ‘necessary’ is not synonymous with ‘indispensable’. It only has to be proved that it’s necessary for larger public interest. He said that the test is not that the prohibition is least restrictive. He said that the courts in the UK have accepted that the State doesn’t have to show that it’s infringement on rights is least restrictive.
The ASG read out a judgment from the UK. He said that what is required is a balancing exercise to further public interest. It need not be least intrusive. He said that a measure can be proportionate even if it is not the least intrusive infringement of rights.
The ASG cited the UK judgment of Smith, which repeats that something can be proportionate without being the least intrusive infringement on rights.
This was a case about compulsory acquisition of property. He said that as long as the government has an acceptable view with regard to stopping tax evasion and protecting revenue, it doesn’t matter if the method adopted is not the least intrusive.
ASG said if there’s an overwhelming public interest then there’s no need to apply the “least intrusive” test.
The ASG said that his last argument is on linking of bank accounts to Aadhaar under the Prevention of Money Laundering Act. PMLA has become a stringent law since 2013. The amended rules under PMLA mandate providing of Aadhaar to open an account.
The ASG said that global money laundering as per UN is to the tune of 1 trillion dollars. He said that money-laundering is a global menace, and India has reacted like other countries have reacted. He read out the Basel Committee Report, and said that the point is to ensure that the bank account is actually opened by the person in whose name is is. He said that the menace of hawala transactions and money laundering is a global concern and many international organizations have formulated strategies to prevent money laundering.
Justice Sikri said there’s no doubt that money laundering is a problem. He asked the ASG to explain how Aadhaar will prevent money laundering and why Aadhaar is required for bank accounts and phones.
The ASG said that there many loopholes that can be plugged. He explained the scheme of PMLA and how it operates. He said it’s not a toothless law anymore. The formation of rules flows from section 12(c) of the Act. He cited section 73(j) and said that Banks have to verify identity under these rules. He said that the purpose of the rules is to effectuate this.
The ASG showed a chart to the bench. He said that there are layers of shell companies, and it becomes impossible to find out who the real beneficiary is. He quoted FEMA.
Justice Sikri asked the ASG why he was showing the chart. The ASG replied that it was to show the larger public interest.
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 12th April 2018.