SC Does Not Agree With Aadhaar Law Being Termed Money Bill

A-G Venugopal advanced arguments in response to submissions that Aadhaar could have been certified Money Bill.

SC questions government on Section 57 of the Aadhaar Act

(Photo: The Quint)

The Supreme Court on Wednesday, 2 May, did not seem to agree with the government's contention that the Aadhaar law was correctly termed a Money Bill by the Lok Sabha Speaker, as it dealt with "targeted delivery of subsidies" for which funds come from the Consolidated Fund of India.

A five-judge constitution bench headed by Chief Justice of India Dipak Misra referred to Section 57 of the Aadhaar Act which says that "state or any body corporate or person" can use Aadhaar number "for establishing identity of an individual for any purpose.”

"The problem arises with regard to Section 57 (of the Aadhaar Act). Section 57 snapped the link with section 7 and the targeted delivery of subsidies, benefits and services," the bench, also comprising Justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan, said.

The bench said allowing "any body corporate or person" to use Aadhaar for establishing identity for any purpose "snaps the link with Consolidated Fund of India," indicating that the Aadhaar legislation cannot be called a Money Bill.

The remarks came when Attorney General KK Venugopal was advancing arguments in response to submissions of lawyers, including senior advocate P Chidambaram, that Aadhaar, by no standard, could have been certified as a Money Bill by the Lok Sabha Speaker as it did not meet the conditions of Article 110 (definition of Money Bill) of the Constitution.

Venugopal referred to the preamble and several provisions of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 and said the term "targeted delivery of subsidies" contemplated the expenditure of funds.

The expenditure has to go into thousands of crores of rupees from the Consolidated Fund of India. This itself brings it (law) into the ambit of Money Bill under Article 110 of the Constitution.

KK Venugopal, Attorney General

Responding to bench's observation on allowing even private bodies to use the Aadhaar architecture, Venugopal said even though the law has ancillary provisions, the main object was delivery of subsidies, services and benefits.

Not a single provision in the Act is unnecessary or unrelated to the main purpose or the pith and substance of the Act which is giving subsidies, services and benefits.

KK Venugopal

He said as of now, no such contract with private entities with the UIDAI was before the court and when such issues are placed before the bench, then only it can be examined.

However, the bench stuck to its observations on Section 57 and said “there is no distribution of benefits and subsidies under section 57.”

Venugopal also referred to Article 110(1)(g) of the Constitution and said it contained words "any matter" and the Aadhaar Law fell under this definition and was rightly held as a Money Bill.

His arguments remained inconclusive and will resume on Thursday, 3 May, before the bench, which is hearing a clutch of petitions challenging Aadhaar and its enabling 2016 law.

Senior Congress leader and Rajya Sabhja MP Jairam Ramesh, represented by Chidambaram, had moved the apex court challenging the decision to treat Aadhaar Bill as a Money Bill, which was passed during Budget Session in March 2016, overruling amendments moved in the Rajya Sabha.

Earlier on Wednesday, 2 May, advocate Zoheb Hossain, appearing for the Maharashtra government, referred to international charters and covenants on harmonisation of socio-economic and civil political rights.

The bench said the Directive Principles of State Policy (DPSP) of the Constitution was essential for good governance and a guarantee of reasonableness of a law. It said though the DPSP was "justiciable," it has been read into Article 21 (Right to life and liberty).

Dealing with data protection, Hossain said that framing a law on the subject was a positive obligation cast on the State and the Aadhaar scheme would ensure socio-economic rights of citizens and prevention of leakages of funds.Referring to judgements, he said when a law conferred discretionary powers to the executive, the validity of the statute cannot be judged by assuming that the executive would exercise its powers arbitrarily.

Hossain referred to the UN General Assembly resolution which says that ideal of freedom can only be achieved if conditions are created so that everyone can enjoy socio-economic and civil political rights.

He contended that right to privacy was an individual and personal right and its alleged infringement cannot be raised in a PIL by unconnected NGOs.

The lawyer then gave an example of Aadhaar being used for obtaining SIM card, opening bank account and getting PDS benefits and said the telecom companies will not know the details of a citizen's bank account or information about PDS.

"Similarly, the bank will not have information about the telecom and PDS details of the citizen. The UIDAI would not be have any of the three details," he said, adding there was no possibility of surveillance.

Earlier, lawyer Gopal Sankaranarayanan had opposed the seeding of Aadhaar with the Permanent Account Number (PAN) for income tax in the Supreme Court, saying in no way does it help in preventing financial frauds or curb black money.