Aadhaar Linking: Coercion by sidelining “independent” regulators and the SC order
Moneylife Digital Team 23 October 2017
Last week, we published an article exposing that the forceful linking of Aadhaar with bank account was taking place due to a Gazette Notification issued by the Finance Ministry and Reserve Bank of India (RBI) has no role in this. Our article was based on the reply we got from the RBI under the Right to Information (RTI) Act. After the story was published, the RBI came out with a “clarification" over the weekend that banks should follow the (prevention of money laundering act or PMLA) Rules, which have statutory force. Whether it is linking of Aadhaar with bank account or mobile numbers, the strange part is how the Central government is issuing direct orders by side lining sectoral regulator under one pretext or the other. The government is also ignoring orders issued by the Supreme Court to restrict use of Aadhaar that too purely on a voluntary basis. (Read: Bank Aadhaar linking: RBI never issued any order, reveals RTI ) 
 
While Moneylife clearly stated that RBI, the banking regulator, never issued any notification or circular for linking Aadhaar with bank accounts, a few in the media made it appear that the RBI had said such linking is not mandatory. Even in the clarification, the central bank had cited the Gazette Notification and asked banks to implement it without further instructions. 
 
The central bank stated, "The Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 published in the Official Gazette on 1 June 2017. These Rules have statutory force and, as such, banks have to implement them without awaiting further instructions."
 
Replies received from RBI under the RTI Act, and its subsequent clarification, issued on a weekend clearly show that the National Democratic Alliance (NDA) government is frightening and coercing people into linking bank accounts with Aadhaar, under the pretext of preventing money laundering. This reasoning is quite bizarre because it seems to treat every bank customer as money launderer and criminal involved in money laundering, unless they link their Aadhaar number with bank account.  
 
While experts are questioning the legal validity of this action, some have even moved to the Supreme Court alleging contempt of its orders. Kalyani Menon Sen, who describes herself as a feminist scholar and activist working for 25 years on issues relating to women's rights, has filed a fresh petition in the Supreme Court, questioning the constitutional validity of RBI's decision on mandatory linking of Aadhaar with bank accounts. She had also challenged the validity of the 23 March 2017 circular issued by the Department of Telecommunication (DoT) making it mandatory for citizens to link their mobile phones with Aadhaar. She said both the decisions violated an individual's right to privacy and, hence, are unconstitutional.
 
As per a report from Times of India, Sen's petition contends that the government's decision to link Aadhaar with bank accounts by amending rules under PMLA violate the solemn promise given by the authorities that parting of biometrics by individuals was on a voluntary basis. 
 
By making it mandatory through PMLA rules, the government was coercing those who have not given their biometrics to part with it by providing for stringent punishment. "Present and potential bank account holders who do not wish to part with their biometric information are, therefore, treated on a par with alleged offenders under PMLA," she was quoted as saying in the news report. 
 
In its effort towards a forceful linking of Aadhaar with mobile number the NDA government seems to have support from the Telecom Regulatory Authority of India (TRAI), headed by RS Sharma, who was Director General of UIDAI between 2009-2013. Therefore, TRAI supporting DoT on Aadhaar linkage is no surprise.
 
There is one more petition filed by Raghav Tankha against the DoT order. He has made mobile operators Vodafone, Bharti Airtel, Idea Cellular, and Reliance Jio, as well as TRAI and DoT as respondents. Tankha’s challenge is based on two circulars issued by DoT wherein it has been stated that the Supreme Court has directed that verification/re-verification of all existing mobile subscribers have to be mandatorily conducted by using the Aadhaar based electronic know-your-customer (eKYC) process, says a report from Bar & Bench.
 
As per the petition, two circulars issued by the DoT on 16 August 2016 and 23 March 2017 make it mandatory for anyone using mobile phone in India to link their Aadhaar with mobile numbers by 6 February 2018 to continue to use the service. 
 
Tankha, in his petition also contended that these two circulars from DoT are violative of Aadhaar Act. 
 
He says, "“A reading of Sections 7, 8, 28, 29 and 57 of the Aadhaar Act would at the most make Aadhaar an optional mode of authentication. Thus, it falls foul of the requirements for restrictions on the right to privacy being placed…the object and purpose of the Aadhaar Act of 2016 is primarily to plug leaks, and ensure that the benefits of subsidies go to those who actually need them. Authentication of mobile services, and transferring sensitive information to the database of a private telecom service provider, is a means, which is not in consonance to the object and purpose of the law.”
 
The SC has restricted usage of Aadhaar to six schemes, where the government is providing some benefits or subsidy to individuals.
 
In its order on 15 October 2015, the apex court had said: 
 
“After hearing the learned Attorney General for India and other learned senior counsels, we are of the view that in paragraph 3 of the Order dated 11 August 2015, if we add, apart from the other two Schemes, namely, PDS Scheme and the LPG Distribution Scheme, the Schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), National Social Assistance Programme (Old Age Pensions, Widow Pensions, Disability Pensions) Prime Minister's Jan Dhan Yojana (PMJDY) and Employees' Provident Fund Organisation (EPFO) for the present, it would not dilute earlier order passed by this Court. Therefore, we now include the aforesaid Schemes apart from the other two Schemes that this Court has permitted in its earlier order dated 11 August 2015. We impress upon the Union of India that it shall strictly follow all the earlier orders passed by this Court commencing from 23 September 2013. We will also make it clear that the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other.”
 
The Gazette Notification issued by Department of Revenue under the Ministry of Finance, and orders passed by DoT for mandatory linking of Aadhaar number with bank account and mobile numbers, respectively, are in contravention of the Aadhaar Act itself. Especially, Section 7 of the Aadhaar Act states furnishing of Aadhaar to establish identity for receipt of subsidy, benefit or service for which expenditure is incurred from Consolidated Fund of India. 
 
An individual bank customer or mobile subscriber, in most cases, uses own money to open or operate the account or use the phone service and not from the Consolidated Fund of India. Also there are a large number of taxpayers, who are not even eligible to receive any subsidy or benefits from any Central Ministry or State Government. Yet, they too are forced to link their self-financed bank account with Aadhaar number.
 
One circular (No 23111/Gen/2017/Legal-UIDAI dated 15 September 2016) issued by Ajay Bhushan Pandey, Chief Executive of UIDAI about Section 7 says the Central Ministries or State Governments, who wants to use Aadhaar should issue a notification stating the service, benefits or subsidies from the Consolidated Fund of India, which require the beneficiary’s Aadhaar authentication or furnishing proof of Aadhaar. (See image below).
 
 
Furthermore, section 29 and section 8 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016 prohibit the linkage, retention, storing and publishing of the Aadhaar number. Any requirement to link the Aadhaar number with any other database, service or right is therefore illegal under the Aadhaar Act, the orders of the Supreme Court, national interests and the interests of the citizens of India.    
 
What is more serious in this mandatory linkage business is the Government thinking and treatment to every Indian citizen who does not have Aadhaar number, as either money launderer or criminal. Most service providers express helplessness as they force customers, as they, in turn, receive orders over 'phone-calls' and are made to give explanations for non-linkage of Aadhaar. 
 
Earlier in August 2017, the Supreme Court in a unanimous decision had upheld the right to privacy as fundamental right that is an integral part of the right to life and liberty.
 
The nine judge Bench, stated, "It was rightly expressed on behalf of the petitioners that the technology has made it possible to enter a citizen's house without knocking at his or her door and this is equally possible both by the State and non-State actors. It is an individual's choice as to who enters his house, how he lives and in what relationship. The privacy of the home must protect the family, marriage, procreation and sexual orientation, which are all important aspects of dignity."
 
"If the individual permits someone to enter the house it does not mean that others can enter the house. The only check and balance is that it should not harm the other individual or affect his or her rights. This applies both to the physical form and to technology. In an era where there are wide, varied, social and cultural norms and more so in a country like ours, which prides itself on its diversity, privacy is one of the most important rights to be protected both against State and non-State actors and be recognised as a fundamental right. How it thereafter works out in its inter-play with other fundamental rights and when such restrictions would become necessary would depend on the factual matrix of each case. That it may give rise to more litigation can hardly be the reason not to recognise this important, natural, primordial right as a fundamental right," it added.
 
The ruling by a nine-judge Bench headed by the then Chief Justice JS Khehar will have a bearing on the challenge to the validity of the Aadhaar scheme on the grounds of its violating the right to privacy.
 
The Supreme Court is scheduled to hear several linked cases on Aadhaar in November.
Comments
Deepak Narain
4 years ago
Linking of Aadhaar with mobile has become a big problem. Me and my wife are aged 70-76 and our fingers no longer make any impression. What should the people like me do? It must be a problem with all Senior citizens. The threat of disconnection hangs over our head. I request the authorities to do something about it.
R Varadarajan
4 years ago
Let the Government make it mandatory for linking Aadhar with Voter ID before making anything else compulsory. When the citizenship is governed by voter ID and not linking this to aadhar will be a futile exercise
Madhookar Pavaskar
4 years ago
It is absurd to link Aadhar to every human activity.
Karan Gandhi
4 years ago
What about linking the PAN card with Aadhar, has any decision been taken?
Mahesh S Bhatt
4 years ago
Government has never understood difference of activity & productivity & messed all up witout measures & standards & roles responsibilties loaded Ministers & Ministroies witout work Mahesh Bhatt
Manoj
4 years ago
very nice informative article. Please keep up the pressure on this illegal and national wastage increasing activity by none other than the government of India.

It is shocking how paranoid politicians can declare all citizens as money launderers and terrorists, and make them jump through hoops, yet some slavish citizens are supporting their frivolous and mal-intended acts. Turkeys voting for thanksgiving.
Madhookar Pavaskar
4 years ago
Aadhaar has become an instrument of coercion in the hands of the government. It's wanton use by the government not only encroaches on the privacy of every individual, but also causes needless harassment of honest bank account holders and tax-payers. It's a waste of time and money. The government seems to be poking its nose in the lawful private affairs of individuals and families, and, in the process, is denying them freedom to live peacefully. The government appears to be looking at every individual as a criminal, leaving the real criminals scot-free.
KrishnaS
4 years ago
SEE CONSEQUENCE OF LINKING AADHAAR WITH ANY FINANCIAL DOCUMENTS -- IMPORTANT
Let us learn from other countries that the Govt. and the public are paying heavily for creating and giving their
Social Security Number (SSN) to welfare schemes
and financial data bases. Identity Theft is a crime created using theft of personal information such as Name, Date of birth,Mobile No. etc. Here are some videos of victims of identity theft from their Social Security No.
Just see the below mentioned videos carefully one by one and see the fate of these victims. They feel helpless after linking everything to SSN.
Just go to youtube and type 'SSN IDENTITY THEFT VICTIMS'
Eashan Shinde
Replied to KrishnaS comment 4 years ago
About SSN from Wikipedia " All it does is confirm that a particular number has been issued to a particular name. Instead, a driver's license or state ID card is used as an identification for adults. " From this information we can understand that SSN is issued without any biometric identification measures as in case of Aadhaar. SSN is just a number which enables the holder of SSN card for the attached benefits. It acts just like a debit/credit card, the holder can misuse it regardless of his true identity. But lets say that a hacker manages to digitally siphon all the aadhaar related data from a bank's server. I wonder what use the data could be to him. All social welfare schemes in India which come under aadhaar are secured by the biometric machines, prescribed by UIDAI or the OTP verification method if your aadhaar is linked to your cell phone. This adds a dual layer of protection to your identity, unless you have lost your phone and aadhaar no., in which case you should get to the nearest police and do the required procedure. If a babu responsible for implementing an aadhaar-based scheme decides to misuse the aadhaar numbers he might have collected from god knows where, he will have to go through the security measures stated above for each person in the list. This makes it way too difficult even for an insider. Aadhaar cannot be misused arbitrarily, even if you happen to lose you aadhaar card. Instead of showing SSN Identity theft victims, please show me some examples of Aadhaar id theft victims. I got my Aadhaar no. back in 2012, and so did millions of Indians. Please do your research in the appropriate context. Thank You
KrishnaS
Replied to Eashan Shinde comment 4 years ago
Hello Eashan Shinde, You have done research in wikipedia right, in that just see the coloumn about Identity Theft which is happened/ing in US but many of them are not reported in public due to fame. You know your mobile can also be hacked by various forcefull self installing apps, finger print can also be gained by the hacker from the a/c holder personally, what else is required.
KrishnaS
Replied to KrishnaS comment 4 years ago
AND FINALLY OUR ' FILMS' GIVE MORE IDEAS ON HOW TO HACK.
Eashan Shinde
4 years ago
I am surprised to see how much moneylife is biased in favor of money launderers and hawala operators. The linking of aadhaar number with bank accounts does not violate anybody's privacy. The aadhaar data will be secure with the banks and will only be revealed to statutory authorities to investigate illegal operations. If you have not done anything wrong then there is nothing to be afraid of. The aadhaar linkage does not restrict anybody's financial freedom, you can open as many number of accounts or fixed deposits you want. If you are worried about keeping track of all your financial transacs then you better hire a CA, but you must comply by the law. Even though not everybody is a terrorist, we happily stand in line to go through the torcherous security checks at airports everytime we fly. But aadhaar linkage is a one-time process, which will make the life of the taxman easier in finding the bad guys. Moneylife please think before you write !
MDT
Replied to Eashan Shinde comment 4 years ago
Thanks for your comment. Unfortunately, half knowledge is always dangerous. Why dont you read more on Aadhaar using this link http://www.moneylife.in/public-interest/uid-aadhaar , and then post your views again.
Eashan Shinde
Replied to MDT comment 4 years ago
Respected Sir, I am not as intelligent and well informed about Aadhaar as you are. So please tell me where I am wrong and we will take it from there. A link to some random news articles related to Aadhaar and its implications is not a valid argument.
MDT
Replied to Eashan Shinde comment 4 years ago
Kindly re-read opening sentence of your first comment. Without knowing Moneylife, you are accusing us of having 'bias'! ... Anyway, for a start, request you to read this http://www.moneylife.in/article/is-your-aadhaar-information-being-used-without-your-consent/50508.html and the rest of articles.
Bapoo Malcolm
Replied to Eashan Shinde comment 4 years ago
May your perceptions be true.
V Ramesh
4 years ago
Why is the Supreme Court silent?
Bapoo Malcolm
Replied to V Ramesh comment 4 years ago
Usually, the courts move only when petitioned. Suo moto, yes, but only in an emergency or when the public does not act by way of a petition or a writ. 2017 is 1984. Don't say we didn't warn you.
Mehernosh Dordi
4 years ago
Only criminals and black marketers will be afraid of linking AAdhar cards. Otherwise no one else is objecting.
MDT
Replied to Mehernosh Dordi comment 4 years ago
Thanks for your comment. Unfortunately, half knowledge is always dangerous. Why dont you read more on Aadhaar using this link http://www.moneylife.in/public-interest/uid-aadhaar , and then post your views again. Best Regards
Free Helpline
Legal Credit
Feedback