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.