This is a record of the proceedings in the Supreme Court 5 judge bench hearings on the Constitutional validity of Aadhaar, which began on Feb 13, 2018. You may read the entire series here. The previous post in this series can be found here.

Date: May 2, 2018

Advocate Zoheb Hossain continued his submissions for State of Maharashtra and UIDAI.

Hossain handed over a bunch of international charters and covenants to the bench on harmonization of socio-economic and civil political rights.

Justice Chandrachud said that directive principles of state policy are essential for good governance and are a guarantee of reasonableness of a law. Directive principles even though not justiciable are read into Article 21.

Hossain said that creating a Data protection law is a positive obligation of the State. All rights give rise to a variety of duties. Aadhaar is a project to ensure socio economic rights of the people. He read out Justice Wadhwa Committee report on public distribution system and food security.

Hossain said that in the case of DK trivedi it was held that when a statute confers discretionary powers to the exec, the validity of the statute cannot be judged by assuming that the executive will act in an arbitrary manner and abuse it’s power. He said in the same case, it was held that there is a constitutional obligation on the state to ensure socio economic welfare of the citizens which includes prevention of leakages in public distribution systems.

Hossain said in the case of Unnikrishnan, the court relied on UDHR and ICCPR and read education as a social right. Hossain read out parts of the ICCPR. He said All human rights are equally important, indivisible and are interconnected. Socio economic rights are as important as civil and political rights.

Hossain read out a UN General assembly resolution which said that ideal of freedom can only be achieved if conditions are created so that everyone can enjoy socio economic and civil political rights. To judge proportionality, reasonableness of the measure/restrictions have to be shown from the point of view of the general public and not from the PoV of one affected party.

Hossain said that the right to privacy is an individual right which can be highly subjective or objective and the state cant be held to be vicariously liable for it. No petitioner has claimed infringement of right to privacy.questions the fact that right to Privacy violation is being heard as a PIL.

Hossain said a person may use her aadhaar for obtaining SIM, opening bank account and getting PDS. Her telecom company will not have details of the bank/PDS. Similarly, her bank will not have info on her telecom and PDS. UIDAI won’t have any of the three details.

Hossain said there’s no possibility of surveillance even at the level of RE.

Hossain explained development of social security number in the US. He cited a congressional report and said that SSN is a quasi universal personal identification number and is used for a variety of purposes such as identifying convicted criminals, obtaining a loan or insurance, etc. He said that individuals in the US can be denied benefits if they do not produce SSN. He said firing of an employee for refusal to produce her SSN was not seen as a violation of privacy by a US court.

Hossain said that the Aadhaar Act provides adequate safety to identity and authentication records. Cites section 33 (disclosure of information in certain cases) and said that the decision made under this section is reviewed by an oversight committee as provided in the proviso. He said there is more oversight than what is provided in the Telegraph Act. Aadhaar Act exceeds safeguards laid down in the PUCL case.

The Bench rose for lunch. Reassembled at 2:30 pm

Advocate Hossain cited various other statutory provisions including CrPC and IT Act that provide for reasonable search and seizure and how they have been challenged earlier and have passed constitutional muster.
Advocate Zoheb Hossain resumed his submissions. His next contention is on national security. He said a party cannot expect strict adherance to the principles of natural justice during times of emergency. His next argument was on Section 33(2) and the point petitioners made about the phrase ‘national security’ being undefined and vague. He read a House of Lords English decision that read in a national security exception to natural justice even when the Statute did not provide for that exception. (MediaNama: Is he comparing the regular operation of a scheme to an emergency that requires a waiver to natural justice? – unclear)

Hossain said Section 47 has been of challenge for not providing a right to complain on the ground that the aggrieved individual party is not heard but that only UIDAI can be heard or can complain. Purpose is discernible under the scheme of the act. A complaint can be filed to UIDAI therefore a person is not left remedy-less. He added that there are several such laws where only authority can register a complaint.

Hossain said that Aadhaar is technical and it’s best if UIDAI is given the power to complain as they best understand the matters. He cited a similar provision under the Industrial Disputes Act that has been upheld – 2014 9 Supreme CourtC 772. He said that in the case of Aadhaar, the individual has a remedy – to call up the grievance redressal mechanism (1947) and that the UIDAI may authorize a person to make a complaint if they feel it’s genuine. There is no bar in Section 47.

Hossain said Sections 66C, 66D and 72A of the IT Act were enough safeguards with respect to actors outside CIDR. Aadhaar Act has safeguards for CIDR. There are provisions under the IT act for offences such as Identity theft, violation of privacy etc.

Hossain said that the purpose of Aadhaar including Section 139AA is to promote redistributive justice and ensure substantial equality along with furthering the dignity of the individual.

Hossain cited the Puttaswamy judgement and said that rights can be curbed in the interest of prevention of tax evasion, curbing black money and prevention of money laundering. He said that the word “distribute” in DPSP 39 (b) has received liberal interpretation. Revenue leakage control is in furtherance of such a measure for redistributive justice.

Hossain’s next argument was about the compelled speech element. He presented judgments to show how not all transactions have a speech element and Aadhaar PAN linking have no speech element.

Hossain said Aadhaar act and Income tax act are standalone acts and it cannot be said that the Parliament in it’s wisdom cannot make Aadhaar mandatory by way of an amendment. He said that this argument has already been examined and decided in Binoy Viswam. If the objects of the two statutes are different then they are said to run parallelly and not intersect. There’s no conflict. (MediaNama: Justice Sikri had said earlier in the case that the Binoy Viswam judgment may need to be revisited in light of the 9 judge bench Privacy judgment.)

On why only individual tax payers are supposed to link Aadhaar with PAN, Hossain said that the rule of equality doesn’t mean that the state has to strike at all evils at the same time. He said that this also repelled the contention that all scams have been done at the top whereas 139AA is no cure. He argued that not all vices have to be cured with one measure.

Hossain claimed that having Aadhaar for individuals also cures the evil vis-a-vis companies. Companies and individuals are treated differently in the Income tax Act. That cannot be called unreasonable classification. He argued that 139AA helps uncovering the the people behind companies as well. Deduplicating DINs.

Hossain said Section 165 of companies Act allows a person to be the director of twenty companies. If Aadhaar is linked with PAN, it can be checked whether a genuine person is the director of more than one company. The genuineness of the company can also be verified. He claimed that the problem of dummy directors and fake companies will be solved by linking Aadhaar with PAN.

Hossain claimed that Rs 33000 crore hitherto undisclosed income has been caught because of Aadhaar PAN linking because it was found people who were giving Form 16(claiming to not own PAN) and Aadhaar were all found to have PAN.

Hossain then answered the argument of conflict between Aadhaar Act and RTI Act and said beneficiaries list need not include aadhaar number.

Hossain concluded his arguments.

The Attorney General started his arguments on the issue of money bill.

The AG explained that the term “targeted delivery of subsidies” contemplates expenditure of funds. The expenditure has to go into thousands of crores from the consolidated fund of India. This itself brings it into the ambit of Money Bill under Article 110 of the Constitution. He read that the Act is in pith and substance a Money Bill.

The AG read out Section 7. He said that any law will have ancilliary provisions such as appeal, revision, etc. As long as each provision is directed at making the law complete, such a provision will not fall outside article 110. He said that even though the law has ancillary provisions, the main objective of the Aadhaar Act is delivery of services and benefits.

He claimed that Sections 7, 24 and 25 along with the preamble of the Act brings it totally within the ambit of Article 110. He claimed that not a single provision in the Act is unrelated to Section 7 i.e. targeted delivery of benefits etc flowing out of the consolidated fund. He said that for all these years, there was a lot of leakage and revenue loss. There has to be some method to prevent it. Therefore we have to bring into existence the UIDAI.

Justice Chandrachud said that Section 57 snaps the link with Consolidated Fund of India.

The AG argued that Section 57 merely allows the existing infrastructure to be used for other purposes as long as they are also legitimate. So it is just an ancilliary provision along with the creation of the authority.

Justice Chandrachud asked how body corporate or person could be tenable under a Money Bill.

The AG said that the contract may also have a fundamental relationship with Consolidated Fund. He said that the Judges could rule on this matter only if a contract is before them. He said that this cannot be a general challenge to Section 57.

Justice Chandrachud was not convinced.

The AG read Articles 112, 118 and 122 of the Indian Constitution.

Justice Sikri said that there is no distribution of benefits and subsidies under section 57. The AG read out Article 110 of the Constitution. He said Section 57 will be saved by Article 110(1)(g).

The CJI and Justice Chandrachud brought up the use of the word “only”.

The AG interpreted the word “only” to say provisions dealing with a to g can only be a money bill.

Justice Chandrachud joked that the AG may be rewriting the Constitution!

Laughter ensued in Court.

The Court rose for the day. The next hearing is at 11:30am on the 3rd May 2018.

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