No Supreme Court stay on Aadhaar link to bank accounts, mobile numbers

New Delhi: Refraining from passing any interim order on pleas challenging the validity of the Aadhaar Act, the Supreme Court on Friday directed banks and mobile service providers to indicate in SMS messages being sent to customers the deadline of December 31 and February 6, 2018, for linking bank accounts and mobile phones to Aadhaar respectively.

A bench of Justices A.K. Sikri and Ashok  Bhushan gave this direction when it was brought to the court’s notice that the messages being sent by banks and telecom service providers lacked information on the last date for linking accounts and phones to Aadhaar.

The messages only warn customers that their banks accounts will become dormant and mobile phones will be blocked if not linked to Aadhaar.

Justice Sikri told attorney general K.K. Venugopal, “Initially, I did not want to say this because of the press is here. But I am also receiving messages to link bank account and mobile number with Aadhaar.”

Taking note of Mr Venugopal’s submission that all petitions relating to validity of Aadhaar have been posted before a five-judge Constitution Bench for final hearing in the last week of November, the court refused to stay the notifications on linking of Aadhaar with bank accounts/mobile numbers and for availing various social security benefits.

The court, however, gave the petitioners liberty to approach the Constitution Bench for interim orders. The bench was hearing petitions filed by Dr. Kalyani Menon and others challenging the notifications to link mobile numbers and bank accounts to Aadhaar.

Senior counsel Shyam Divan, Arvind P. Datar and K.V. Viswanathan submitted that  messages being sent to customers gave an impression that the bank account or mobile number will be frozen immediately.

They suggested that if the SMS messages contained information on the deadline, people would know that the accounts or the mobiles would not be frozen immediately.

On fears related to misuse of date, the AG submitted that the issues will be dealt with by the Centre through a data protection regime as mandated by the right to privacy judgment.

A committee is looking into the issues and will give its report by March 31, 2018. The Aadhaar law will be amended based on the recommendations of the Committee, the AG said.

He said the government was willing to extend the deadline for linking bank accounts with Aadhaar from December 31 to March 31, 2018, if the final hearing on the matter does not take place in November.

A three-judge bench will examine later this month whether the provisions in the Aadhaar Act and the notifications issued by the government for its use in welfare schemes violate the right to privacy  - upheld as a fundamental right by the Supreme Court recently.

The writ petitions challenge Rule 2(b) of the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017, by which submission of an Aadhaar Number has been made mandatory for individual clients, companies, partnership firms and trusts for opening bank accounts; maintaining existing bank accounts; making any financial transactions of and above Rs 50,000 and crediting foreign remittance.   

 Existing bank account holders have been directed to furnish Aadhaar numbers before December 31.

The petitions sought to challenge a circular issued in March by the department of telecommunication, making it mandatory for all mobile phone holders to link their numbers with Aadhaar by February 6, 2018.

The petitioners contended that these directions to bank account holders and mobile phone users are unconstitutional as reliance on Aadhaar and its use for meeting Know Your Customer (KYC) obligations constitutes a serious compromise of India’s commitments under international law.

The petitioners also objected to provisions forcing compulsory parting of private biometric information, disproportionate punitive consequences in light of non-compliance and a compromise of international legal obligations, financial security and integrity of the country.