Linking Aadhaar with Bank Account is not Mandatory, rules Supreme Court [Read Judgment]

Aadhaar - Supreme Court of India - Taxscan

While upholding the Constitutional validity of Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 the Constitution bench (4:1) of the Supreme Court has struck down some provisions including the provision mandating Linking Aadhaar with Bank Account.

The Constitution bench observed that the provision in the present form does not meet the test of proportionality and, therefore, violates the right to privacy of a person which extends to banking details.

The bench also observed that “Nobody would keep black money in the bank account. We accept the possibility of opening an account in an assumed name and keeping black money therein which can be laundered as well. However, the persons doing such an Act, if at all, would be very few. More importantly, those having bank accounts with modest balance and routine transactions can be safely ruled out. Therefore, the provision in the present form does not meet the test of proportionality. Therefore, for checking this possible malice, there cannot be a mandatory provision for linking of every bank account”.

“This linking is made compulsory not only for opening a new bank account but even for existing bank accounts with a stipulation that if the same is not done then the account would be deactivated, with the result that the holder of the account would not be entitled to operate the bank account till the time seeding of the bank account with Aadhaar is done. This amounts to depriving a person of his property. We find that this move of mandatory linking of Aadhaar with bank account does not satisfy the test of proportionality”, the bench said.

Justice A.K Sikri also observed that, “To recapitulate, the test of proportionality requires that a limitation of the fundamental rights must satisfy the following to be proportionate: (i) it is designated for a proper purpose; (ii) measures are undertaken to effectuate the limitation are rationally connected to the fulfilment of the purpose; (iii) there are no alternative less invasive measures; and (iv) there is a proper relation between the importance of achieving the aim and the importance of limiting the right”.

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