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SC Disagrees With Aadhaar Law Being Termed a Money Bill, Says Use by Private Firms Beyond Mandate

A five-judge constitution bench headed by 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".

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Updated:May 2, 2018, 9:55 PM IST
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SC Disagrees With Aadhaar Law Being Termed a Money Bill, Says Use by Private Firms Beyond Mandate
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New Delhi: The Supreme Court on Wednesday questioned the Centre’s justification for passing the Aadhaar Act as a Money Bill, saying that if the sole purpose of the 12-digit biometric ID was to disburse welfare measures to the underprivileged then its use by private players goes beyond the mandate of the law.

A five-judge constitution bench headed by 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 bench disagreed with the government's contention that the Aadhaar law was correctly termed as 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.

"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 A K Sikri, A M Khanwilkar, D Y Chandrachud and Ashok Bhushan, said.

The bench said allowing "anybody 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 government has permitted private entities such as telephone companies and banks to ask for Aadhaar number under Section 57 of the Aadhaar Act.

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 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," he said.

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," the top law officer said.

He said as of now, no such contract with private entities with 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 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.

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| Edited by: Aakarshuk Sarna
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