India: Aadhaar – The Supreme Court Of India Weighs In

Last Updated: 3 October 2018
Article by Manas Ingle and Anuj Maharana

In the landmark judgment of Justice K.S Puttaswamy (Retd) and Another v. Union of India and Others[1] ("Aadhaar Judgment"), the Hon'ble Supreme Court of India has finally looked into the constitutionality and certain other issues in relation to the Aadhaar act and the Aadhaar scheme.

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 inter alia, provides for establishment of Unique Identification Authority of India, issuance of Aadhaar number to individuals, maintenance and updating of information in the Central Identities Data Repository (CIDR), issues pertaining to security, privacy and confidentiality of information as well as offences and penalties for contravention of relevant statutory provisions.

Some of the questions addressed in the judgment, that we are going to focus on in this post, are as follows:

  1. Whether the Aadhaar Project creates or has a tendency to create surveillance state and is, thus, unconstitutional on this ground?
  2. Whether the Aadhaar Act and Rules provide such protection, including in respect of data minimization, purpose limitation, a time period for data retention and data protection and security?
  3. Whether the Aadhaar Act violates right to privacy and is unconstitutional on this ground?

Information collected under Aadhaar, its Safety and Disclosure

At the time of enrolment an individual is disclosing two types of information, one consists of the "Core Biometric Information" which primarily includes fingerprint, iris scan, or other biological attributes of an individual, and second is the "Demographic Information" which includes the name of an individual, date of birth, and other relevant information of an individual. The Core Biometric Information collected is regarded as sensitive personal data or information under the Information Technology Act, 2000. All information collected from an individual (with consent) for the Aadhaar scheme is required to be stored on a "Central Identities Data Repository" (CIDR) which is a centralized database, containing all Aadhaar numbers along with the Demographic Information and the Core Biometric Information of an individual and can only be used for submission to the CIDR for authentication.

The concerns that have been raised in relation to the above are on the lines of mandatory data sharing for availing Aadhaar linked socio-economic benefits; risk of breach or misuse of sensitive information; data sharing with private organizations and non-state actors; usage of information shared for other purposes such as surveillance, profiling of individuals, etc. for national security concerns.

With respect to the same, the majority in the Aadhaar Judgment has held as follows:-

  1. Any authentication records are to be stored only for 6 months. The provision under Regulation 27(1) of the Aadhaar (Authentication) Regulation, 2016 allowed the Aadhaar authority to retain the transaction related data for 6 months and archive the same for 5 years. Now, the authority is only allowed to retain the data for 6 months.
  2. Creation of metabase, as provided for in Regulation 26 of the Aadhaar (Authentication) Regulation, 2016, has been held to be impermissible in its current form and has been suggested that the same needs suitable amendments.
  3. Interestingly, Section 33(2) of the Aadhaar Act has also been struck down. Under this provision disclosure of information, including identity information and authentication records collected was allowed, when disclosed in the interest of national security.
  4. Section 57 of the Aadhaar Act, which enabled body corporate and individual to seek authentication, has been held to be unconstitutional.
  5. Most importantly, the importance of bringing out a robust data protection regime in the form of an enactment, basis the Justice B.N.Krishna Committee Report (with necessary and appropriate modifications), has been stressed upon. For further reading on aspects of Data Protection Bill, 2018, read our earlier blog

Right to Privacy and the Three Prong Test

It stands established, with conclusive determination from the nine-judge bench in the K.S. Puttaswamy v. Union of India[2] that the right to privacy is a fundamental right under the Constitution of India, 1950. As rightly stated by Justice R. F. Nariman, in the Indian context right to privacy will mainly cover three aspects "(i) Privacy that involves person i.e. physical privacy, (ii) informational privacy and (iii) privacy of choice. We can ground physical privacy and privacy relating to the body in Articles 19 (1) (d) and (e) read with Article 21; ground personal information privacy under Article 21; and the privacy of choice in Article 19 (1)(a) to (c), 20 (3), 21 and 25 of the Constitution of India". We had written earlier on some aspects of this.

It is clearly laid down under the Aadhaar judgment referring to the judgment provided by nine-judge bench that "right to privacy cannot impinge without a just, fair and reasonable law: It has to fulfill the test of proportionality i.e. (i) existence of a law; (ii) must serve a legitimate State (as defined under the Indian Constitution) aim; and (iii) proportionality".

The first requirement is an express requirement under Article 21, where no restrictions on right to privacy or no individual can be deprived of a right to privacy without a law being in existence. The second requirement of legitimate state aim makes ensures that the law enacted by the legislature which imposes restrictions on individual's right to privacy, falls within the ambit of reasonable restriction as mandated under Article 14 of the Indian Constitution. The third requirement ensures that the means that are adopted by the legislature are proportional in nature to the object and needs sought to be fulfilled by the law.

In reaching a conclusion with respect to the above, reference has been placed to the statement of objects and reasons for Introducing the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 and preamble of the corresponding Act (2016), which emphasises on "a good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India, to individuals residing in India through assigning of unique identity numbers to such individuals and for matters connected therewith or incidental thereto."

The judgement confirms that, there is a vital State interest in ensuring that scarce public resources are not dissipated by the diversion of resources to persons who do not qualify as recipients. Allocation of resources for human development is coupled with a legitimate concern that the utilization of resources should not be siphoned away for extraneous purposes.

Therefore, the first two requirements of the 3-part test are met by the Aadhaar scheme and the act i.e. existence of a law and the restrictions imposed on the fundamental right of an individual by the law serves legitimate state interests.

The Supreme Court also examined the third criteria of proportionality and held that the Aadhaar act meets the criteria of proportionality, as all the aspects of proportionality, stand satisfied.

In view of the above, it has been held that the Aadhaar act does not lead to any loss of privacy and is not unconstitutional, subject to certain provisions of the Aadhaar act which were struck down. The apex court resorted to the following grounds to establish that the Aadhaar act is constitutional. Firstly, only minimal information of the applicant is stored, who intends to have an Aadhaar. Secondly, there is no risk of loss of privacy as the information collected by the enrolment agencies is transmitted to the CIDR in an encrypted form. Finally, at the time of authentication, the information does not remain with the requesting entity.

Also, the Authority has mandated the use of a registered device (RD) for all authentication requests. The RD rules out any possibility of the arbitrary use of the stored biometric, as the biometric captured is encrypted within a few seconds. The Authority gets only the registered device code for authentication and does not obtain any information relating to the IP address or the GPS location from where such information is collected. Further, the Authority or any entity is barred from collecting, keeping or maintain information for the purpose of the authentication under Section 32 (3) of the Act. Above all, there is an oversight by the Technology and Architecture Review Board (TARB) and Security Review Committee to all the information flow through the Aadhaar system. These committees endeavor to provide safeguards.

Profiling the Information and Surveillance

Concerns were also raised regarding the information of the individuals being stored in the CIDR. There was a risk in terms of profiling, as all the data was being stored at one place which could lead to the surveillance of the individuals. But the same ground which has been raised by the petitioner stands to be baseless. The Apex Court in this regard has held that as the information which was transmitted to the CIDR is already in an encrypted form (data as soon as collected is encrypted in PKI-2048 form) and therefore it is not possible for the Aadhaar authority to profile any individual.

Further while undertaking the authentication process the Authority simply matches the information received i.e. the biometrics information and no other information regarding the purpose, location or nature of the transaction, etc, is matched. Thus, there is no risk of profiling or surveillance being undertaken by the Government.

Linking of banking accounts and mobile phone numbers to Aadhaar

Rule 9 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and the allied notifications to it made it a mandate to link the Aadhaar with a bank account. The same has been held to be unconstitutional on the ground that it does not fulfil the test of proportionality. The Apex court held that the linking has been made compulsory not only for the opening of the bank accounts but even for an existing bank account with an express condition that the bank account will be deactivated till Aadhaar is linked with the bank account. This is nothing but depriving a person of his property.

Further, the circular dated 23 March 2017, by the Department of Telecommunications which mandated linking of mobile phone numbers with Aadhaar was held to illegal and unconstitutional by the Apex Court as the same was not backed by any law.

We believe that the ambiguity and unreasonableness surrounding Aadhaar scheme have been addressed of by the Supreme Court, with the directions provided by the Supreme Court and changes ordered to the Aadhaar Act, to make Aadhaar a robust and a better scheme for the population of India keeping in mind individual's right to privacy and safety of data collected. There are definitely many more questions on Aadhaar which needs to be addressed. Perhaps, the Supreme Court in its wisdom would like that to be part of the proposed Data Protection Act.

The judgement is definitely a step forward and will be welcomed by stakeholders at large. The Aadhaar Judgment clearly indicates and establishes the balance between duties of the government and rights of an individual in a democratic and modern state. In the backdrop of a thriving digital economy and digitalisation of India it is the need of the hour to strike a balance between good governance and vulnerability of individual's rights and at the same time pronouncing to each and every beneficiary of the Aadhaar scheme that it is in benefit of the nation that such unique identification scheme shall be allowed to function and the same has not been implemented with an intent of making India a surveillance state.



[2] (2017) 10 SCC 1

Photo source: UIDAI

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