In a stinging judgement, the Bombay High Court has pulled up multiple statutory and regulatory bodies—including the unique identification authority of India (UIDAI), the income-tax (I-T) department, Union Bank of India and goods and services tax (GST) authorities—for failing to act on a blatant case of identity fraud involving Mumbai-based Vilas Prabhakar Lad, who battled legal notices, criminal proceedings and financial harassment for five years after his Aadhaar and PAN details were misused by fraudsters. The division bench of justice MS Sonak and justice Jitendra Jain termed the inaction 'a serious dereliction of duty' and directed each of the respondent authorities to pay Rs10,000 to Mr Lad as compensation for their prolonged failure to act.
The bench says, "The fraud could have been detected at an early stage had all the respondents been diligent enough to authenticate the Aadhaar number. However, inaction on the part of the respondents after having failed in their duty has aggravated the situation even more. We sincerely hope that in the future all concerned authorities would take prompt action when such instances of fraud are brought to their notice. We pray that common citizens of this nation do not suffer agony like the petitioner."
"...in the future when such frauds are brought to the notice of the authorities and law enforcement agencies by common citizens of this country then the authorities and law enforcement agencies would immediately take steps for finding the people behind such fraud and bringing them to justice and to take steps to prevent the occurrence of the same in the near future. Delay in responding to such complaints and inaction in not initiating any criminal proceedings on discovery of such fraud and more so when fraud is committed on the very statutory and regulatory authorities of this country then, in such a scenario, a higher degree of responsibility is required to be discharged by the officers of the regulatory authorities and enforcement agencies," the HC noted.
The bench also slammed the commissioner of I-T at Mumbai and the commissioner of state tax in Gujarat for not appearing during the hearing. "We do not approve of such non-appearance, more so in matters like this, which is non-adversarial and when the proceedings are in the larger interest of the nation and public."
The nightmare for Mr Lad, who runs a small provisional store in Prabhadevi area of Mumbai, began on 28 December 2019, when he received a legal notice from an advocate based in Rajkot, accusing him of defaulting on a rent payment of Rs75,000 for a property he had never heard of. The notice claimed he was associated with a firm named Metro International Trading Company. A few weeks later, on 14 February 2020, Mr Lad was shocked to receive another notice under Section 138 of the Negotiable Instruments Act for a dishonoured cheque of Rs13.83 lakh allegedly issued by the same company. Having no connection to the company, the property, or the transactions, Mr Lad realised that someone had fraudulently misused his identity.
He approached the Dadar Police station on 27 January 2020 to report the identity theft and fraud. However, instead of launching an investigation, Mumbai police informed him that the fraud occurred in Gujarat and advised him to contact the authorities there. This marked the beginning of a long and frustrating legal ordeal.
Mr Lad simultaneously alerted Andhra Bank (now merged with Union Bank of India), UIDAI, the I-T department and the GST department. In a letter dated 1 December 2020, Union Bank confirmed that a current account had been opened in July 2019 under the name Metro International Trading Company, fraudulently listing Mr Lad as the proprietor. The know-your-customer (KYC) documents used to open the account bore Mr Lad’s name and Aadhaar and PAN details, but with the photograph of an unknown person.
Despite this damning evidence, UIDAI and other authorities dragged their feet. Mr Lad submitted both his original documents and the forged ones for verification. Multiple letters and reminders were sent to UIDAI and the I-T department, yet no concrete action was taken. No formal complaint or first information report (FIR) was lodged by any of the authorities despite being directly affected by the fraud.
On 29 January 2021, Mr Lad also informed the Mumbai GST authorities of the fraudulent GST registration. His letter was forwarded to the Gujarat GST department which had issued the registration certificate. But neither department acted and Mr Lad was later served with an attachment notice from the Gujarat state tax department. He was also made to face criminal proceedings before a magistrate in Ahmedabad, based on transactions he had no part in.
The High Court expressed deep dissatisfaction at the role played by each authority. The Court observed that, since 2020, Mr Lad had written several letters to the authorities, but none of them initiated any legal steps against the fraudsters. The Court criticised UIDAI in particular, stating, “UIDAI, even after being the custodian of data of millions of Indians, did not file any complaint until the present hearing.”
The Court noted that UIDAI’s failure to act was particularly concerning, given its responsibility for safeguarding personal identity information.
The Court came down heavily on Union Bank of India as well, stating that the lender had not complied with the KYC and Aadhaar authentication requirements laid out under Reserve Bank of India (RBI)’s 2016 master circular. “Had the bank conducted Aadhaar authentication as mandated, Mr Lad’s photograph would have been displayed and could have been verified with the person present,” the court observed.
The judgement also highlighted how Mr Lad had to endure prolonged mental harassment, including criminal proceedings for cheque dishonour and threats of property attachment by tax authorities. Despite the availability of digital verification tools and regulatory mandates, the authorities failed to prevent or act on the misuse of Mr Lad’s identity. The Court pointed out that Mr Lad was forced to engage a lawyer, draft replies to legal notices and, ultimately, move the High Court to seek justice—all because the authorities did not do their jobs.
Referring to Mr Lad’s counsel’s suggestions on improving Aadhaar security—such as QR code-based authentication, mobile one-time passcode (OTP) verification, document invalidation protocols, and real-time SMS alerts—the Court noted that many of these safeguards already exist under the Aadhaar (Authentication) Regulations, 2021. The Court opined that UIDAI must proactively create awareness about who is authorised to demand Aadhaar and ensure that only authorised entities, equipped with the proper technology, are allowed to authenticate it.
In conclusion, the Court directed the GST department to remove Mr Lad’s Aadhaar and PAN numbers from its database. Each of the respondent agencies—UIDAI, Union Bank of India, I-T department and both the Mumbai and Gujarat GST departments—was ordered to pay Rs10,000 each to Mr Lad for their dereliction of duty.
The order stands as a stern warning to regulatory authorities that they will be held accountable for failing to prevent or respond to identity fraud. In a digital age where Aadhaar and PAN are central to financial and legal transactions, the court’s ruling reinforces the need for stringent authentication, prompt redressal, and institutional responsibility.
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Approaching the HC itself is not in the capacity of 99% of tax-payers most likely and more if we consider the populace. This is a cruel joke.
Till date 27 july change of mobile no.not implemented,complain on pgportal no resolution and asking citizen Mr.Parab to do all process again with no regrets.
There appears a large scam and fraud within uidai.
Mr friend Mr.Parab has sent all documents to money life twitter account.
Till date 27 july change of mobile no.not implemented,complain on pgportal no resolution and asking citizen Mr.Oarab to do all process again with no regrets.
There appears a large scam and fraud within uidai.
Mr friend Nr.Oarab has sent all documents to money life twitter account.
10k is peanuts.