SC rejects Govt reasoning, says Aadhaar can’t stop bank frauds

With the Centre pitching for Aadhaar as the panacea for curing even bank frauds, the Supreme Court on Thursday said that bad loans get accumulated due to connivance of bank officials for which Aadhaar cannot be the solution.

The Centre, on the penultimate day of its arguments before a five-judge Constitution Bench, argued that not just money laundering and tax evasion, Aadhaar can even prevent bank frauds running into lakhs of crores. Attorney General KK Venugopal appearing for the Centre supported this argument by pointing out how loan defaulters used to apply under benami accounts and later disappeared without repaying the amount.

The Bench headed by Chief Justice Dipak Misra said, “Aadhaar has nothing to do with bank frauds as there is due diligence from banks before clearing high value loans. But problem is the bank officials are hand-in-glove and even Aadhaar cannot stop this from happening.” Even A-G in a lighter vein remarked, “All the Nirav Modis in the country are prospering this way.”

The Bench, also comprising Justices AK Sikri, AM Khanwilkar, DY Chandrachud, and Ashok Bhushan told Venugopal that the Government must answer how Aadhaar is justified for that section of population who do not intend to receive any benefit of subsidy under any Central or State Government scheme. The Bench said that by asking all citizens to enroll with Aadhhar and link their mobile phones, bank accounts with Aadhaar, every citizen is being made to appear as a potential criminal. “Will terrorists go to apply for a mobile phone,” asked Justice Chandrachud, who maintained that if subsidies are provided to persons who are poor and underprivileged, there must be safeguards to prevent its misuse against being used for purposes other than what it was intended for.

The A-G submitted that in the six years since Aadhaar was rolled out, there has not been a single complaint from any Aadhaar card holder about privacy issues. “Happily and gladly people have embraced Aadhaar. Any person who has voluntarily opted for Aadhaar card cannot complain saying that it affects my right to privacy,” the A-G submitted.

The Bench termed such an approach of the State to be a “Marxist argument” comparing it with a crude example of someone agreeing to become a slave if he is given food to eat. The A-G said that nobody can complain that their privacy is affected when what Aadhaar is collecting is “bare minimum” details about the name, age, location of a persons along with biometrics.

The Bench said, “The test is not whether or not someone has complained invasion of privacy but whether safeguards exist to prevent existing data being used for extraneous purpose.” Again, the Bench was critical about the “minimal” invasion of privacy theory put forth by the Centre wondering who decides what is minimal. “The Centre must balance rights of one individual who wants food and shelter with the right to privacy as both are different components of Article 21 (right to life),” the Bench said, adding, that despite State interest to give food, shelter, the Centre must justify how it is necessary for all 120 billion people to link their Aadhaar when they are not seeking those benefits. The arguments will continue on Tuesday.