BINOY VISWAM v. UNION OF INDIA & ORS.
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- Court
- Supreme Court of India
- Decided
- Bench
- A. K. SIKRI and ASHOK BHUSHAN
- Citation
- [2017] 7 S.C.R. 1
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Headnote — Supreme Court Reports (editorial summary, not part of the judgment)
· Income Tax Act, 1961: s.139AA - Constitutionality of- s.139AA makes it compulsory for assessees to give aadhaar number - Constitutional validity of s.139AA challenged on the ground that since enrolment under Aadhaar Act is voluntary, it canno1 be made compulsory under the · Income Tax Act -
Held
The purpose for enrolment under the Aadhaar Act is to avail benefits of various welfare schemes etc. as stipulated in. s. 7 of.th.e Aadhaar Act - The purpose behind Income D Tax Act, on the other hand, is entirely different - For achieving the purpose such as curbing black money, money laundering and tax evasion etc., if the Parliament chooses to make the provision mandatory under the Income Tax Act, the competence of the Parliament cannot be questioned on the ground that it is impermissible only because under Aadhaar Act, the provision is directory in nature - It is the prerogative of the Parliament to make a particular provision directory in one statute and mandatory/ compulsory in other - That by itself cannot be a ground to question the competence of the legislature - After all, Aadhaar Act is not a mother Act - Two laws, i.e., Aadhaar Act, on the one hand, and law in the form of s.139AA of the Act, on the other hand, are two different stand alone provisions/laws and validity of one cannot be examined in the light of provisions of other Acts - Thus, there is no conflict between the provisions of Aadhaar Act and s.139AA of Income Tax Act in as much as when interpreted harmoniously they operate in distinct fields - Legislation - Interpretation ofstatutes - Harmonious G 0 construction - Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act. s.139AA - Purpose of- Held: s.139AA is aimed at seeding Aadhaar with PAN - One of the main objectives is to de-duplicate
Catchwords
A PAN cards and to bring a situation where one person is not having more than one PAN card or a person is not able to get PAN cards in assumed/fictitious names - In such a scenario, if those persons who violate s. I 39AA of the Act without any consequence, the provision shall be rendered toothless - It is the prerogative of the Legislature to make penal provisions for violation of any law made by it - The requirement of giving Aadhaar enrolment number to the designated authority or stating this number in the income tax returns is directly connected with the issue of duplicate/fake PANs - Therefore, it cannot be denied that there has to be some provision stating the consequences for not complying with the requirements of s. l 39AA c of the Act, more particularly when these requirements are found as not violative of Arts.14 and 19 - If Aadhar. number is not given, the said exercise may not be possible - Sub-section (1) of s. l 39AA stipulates that those who are not PAN holders, while applying for PAN, they are required to give Aadhaar number - At the same time, as far as existing PAN holders are concerned, since the impugned provisions are yet to be considered on the touchstone of Art.21 of the Constitution, including on the debate around Right to Privacy and human dignity, etc. as limbs of Art.2I, till the said aspect of Art.2I is decided by the Constitution Bench a partial stay of the said proviso is necessary - Those who have already enrolled themselves under Aadhaar scheme would comply with the requirement of sub-section (2) of s.l 39AA of the Act - However, those assessees who are not Aadhaar card holders and do not comply with the provision of s.139(2), their PAN cards be not treated as invalid for the time being - A person wJio is holder of PAN and if his PAN is invalidated, he is bound to suffer immensely in his day to day dealings, which situation should be avoided till the Constitution Bench authoritatively determines the argument of Art.21 of the Constitution - Since this course of action is adopted, in the interregnum, it would be permissible for the Parliament to consider as to whether there is a need to tone down the effect of the said proviso by limiting the consequences - However, at the same time, proviso to s. l 39AA(2) cannot be read retrospectively - Constitution of India - Art.21. s.139AA(2) proviso - Retrospective effect - Constitutionality of-
Held
If failure to intimate the Aadhaar number renders PAN H
3 void ab initio with the deeming provision that the PAN allotted would be invalid as if the person had not applied for allotment of PAN would have rippling effect of unsettling settled rights of the parties - It has the effect of undoing all the acts done by a person on the basis of such a PAN - It may have even the effect of incurring other penal consequences under the Act for earlier period on the ground that there was no PAN registration by a particular assessee - The rights which are already accrued to a person in law cannot be taken away - Therefore, proviso to sub-section (2) has to be read down to mean that it would operate only prospective. Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016: c Object of its enactment -
Held
The Aadhaar Act is enacted to enable the Government to identify individuals for delivery of benefits, subsidies and services under various welfare schemes.
Catchwords
Whether Aadhaar card scheme whereby biometric data of an individual is collected violates- Right to Privacy and, therefore, is offensive of Art.21 of the Constitution -
Held
This issue is pending before the Constitution Bench and is yet to be decided - In the process, the Constitution Bench is also called upon to decide as to whether Right to Privacy is a part of Art. 21 of the Constitution at all - Final decision pending - Constitution of India - Art.21. E
Catchwords
Judicial review; A Power of courts to interfere with legislative action - Scope of - Held; Courts can strike down legislation either on the basis that it falls foul of federal distribution of powers or that it contravenes fandamental rights or other Constitutional rights/provisions of the Constitution of India - No doubt, since the Supreme Court and the B High Courts are treated as the 'ultimate arbiter in all matters involving interpretation of the Constitution, it is the Courts which have 1he final say on questions relati'!g to rights ~nd its violation. Stages ·of judicial review - Exercise of judicial review to be done at three stages - Jn the first stage, the Court would examine as c to whether impugned provision in a legislation is compatible with the fandamental rights or the -Constitutional provisions (substantive judicial review) or it falls foul of the federal distribution of powers (procedural judicial review) - If it is not found to be so, no further exercise is needed as challenge would fail - On the other hand, if it ·is found that Legislature lacks competence as. the subject legislated was not within the powers assigned in the list in VII Schedule, no farther enquiry is needed and such a law is to be declared as ultra vires the Constitution - However, while undertaking substantive judicial review, if it is found that the impugned provision appears to be violative offundamental rights or other Constitutional rights, the Court reaches the second stage of review -:- At this second phase · of enquiry, the Court is supposed to undertake the. exercise as to w.hether the impugned provision can still be saved by reading it down so as to bring it in conformity with the Constitutional provisions ·- If that is not achievable then the enquiry enters the third stage - If the offending portion of the statute is severable, it is severed and the Court strikes down the impugned provision declaring the same as unconstitutional - Administrative law. Disposing of the writ petitions, the Court
Held
1. Scope of Judicial Review of Legislative Act G Under the CO'nstitution; Supreme Court as well as High Courts are vested with the power of judicial review of not. only administrative acts of the executive but legislative enactments passed by tJle legislature as well. This power is given to the High Courts under Article 226 of the_ Constitution .and to the
Reporter's headnote (continued) and case details
(Writ Petition (Civil) No. 247 of2017)
Footnotes
Need to interconnect the databases - Linking PAN with Aadhaar/biometric information to prevent use of wrong PAN for high value transactions - Multiple methods of giving proofs of identity - There is no mechanism/system at present to collect the data available with each of the independent prooft of ID - Seeding F of existing PAN with Aadhaar is perceived as the best method, and the only robust method for de-duplication of PAN database. Constitution of India: Art.14 - Reasonable classification -· Art.14 enshrines the G principle of equality as a fundamental right - It gives the right to equal treatment in similar circumstances, both in privileges conferred and in the liabilities imposed - However, the guarantee against the denial of equal protection of the law does not mean that identically the same rules of law should be made applicable to all persons in H
Footnotes
A spite of difference in circumstances or conditions - The varying needs of different classes or sections of people require differential and separate treatment - The Legislature is required to deal with diverse problems arising out of an infinite variety of human relations - The principle of equality of law, thus, means not that the same law should apply to everyone but that a law should deal alike with all B in one class; that there should be an equality of treatment under equal circumstances - Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 20 i 6. Art.i4 - Class legislation - it is permissible for the State to classify persons for 'legitimate purposes - The Legislature is also c competent to exercise its discretion and make classification - s.i39AA of income Tax Act, i96i has created two classes, i.e. one class of those persons who are assessees and other class of those persons who are income tax assessees. - The impugned provision is applicable only to those who are filing income tax returns - There D cannot be any dispute that there is a reasonable basis for dijferentiation and, therefore, equal protection clause enshrined in Art. i 4 is not attracted - What Art. i 4 prohibits is class legislation and not reasonable classification for the purpose of legislation - All income tax asessees constitute one class and they are treated alike by the impugned provision. E Art. i 9(1 )(g) - Quoting the Aadhaar number for purposes mentioned in sub-section (1) of s.i 39AA of Income Tax Act, i96i or intimating the Aadhaar number to the prescribed authority as per the requirement of sub-section (2) does not, by itself, impinge upon the right to carry on profession or trade, etc. - Therefore, it is F not violative of Art.i9(l)(g) of the Constitution.
Art.i9(l)(g) - If the PAN of a person is withdrawv or is nullified, it definitely amounts to placing restrictions on the right to do' business. G Principle of separation of power - Each wing of the State to act within the sphere delineated for it under the Constitution - Crossing these limits would render the action of the State ultra vires the Constitution - When it comes to power of taxation, undoubtedly, power to tax is treated as sovereign power of any State - Taxation.
5
Footnotes
A Supreme Court under Article 32 as well as Article 136 of the Constitution. At the same time, the parameters on which the power of judicial review of administrative act is to be undertaken are different from the parameters on which validity of legislative enactment is to be examined. No doubt, in exercise of its power of judicial review of legislative action, the Supreme Court, or for B that matter, the High Courts can declare law passed by the Parliament or the State Legislature as invalid. However, the power to strike down primary legislation enacted by the Union or the State Legislatures is on limited grounds. Courts can strike down legislation either on the basis that it falls foul of federal c distribution of powers or that it contravenes fundamental rights or other Constitutional rights/provisions of the Constitution of India. No doubt, since. the Supreme Court and the High Courts are treated as the 'ultimate arbiter in all matters involving interpretation of the Constitution, it is the Courts which have the final say on questions relating to rights and whether such a D right is violated or not. The basis of this statement lies in Article 13(2) of the Constitution which proscribes the State from making 'any law which takes away or abridges the right conferred by Part Ill', enshrining fundamental rights. It categorically states that any law made in contravention thereof, to the extent of the E contravention; be void. In the context of judicial review of legislation, Article 372 (1) gives an indication that all laws enforced prior to the commencement of the Constitution can be tested for compliance with the provisions Of the Constitution by Courts. [Paras 73, 74][77-G-H; 78-A-D, G] F Union of India & Ors. v. Sicom Limited & Am: (2009) 2 SCC 121 : [2008) 17 SCR 120; Ashok Kumar Thakur v. Union of India & Ors. (200~) 6 SCC 1 : [2008) 4 SCR 1; State of A.P. & Ors. v. McDowell & Co. & Ors. (1996) 3 SCC 709 : [19961 3 SCR 721 - relied on. G United States Department of Justice v. Reporters Committee for Freedom of the Press 489 U.S. 749 (1989) - referred to. 1.2 A legislation cannot be declared unconstitutional on the ground that it is 'arbitrary' inasmuch as examining as to whether H a particular Act is arbitrary or not implies a value judgment and
7 the courts do not examine the wisdom of legislative choices and, A therefore, cannot undertake this exercise. [Para 78] [84-A-B] Rajbala & Ors. v. State of Haryana & Ors. (2016) 2 SCC 445 : [2015] 12 SCR 1106; Jindal Stainless Ltd. & Anr. v. State of Haryana & Ors. (2016) 11 SCALE 1 - relied on. B 1.3 Afortiori, a law cannot be invalidated on the ground that the Legislature did not apply its mind or it was prompted by some improper motive. It is, thus, clear that in exercise of power of judicial review, Indian Courts are invested with powers to strike down primary legislation enacted by the Parliament or the State c legislatures. However, while undertaking this ~xercise of judicial review, the same is to be done at three levels. In the first stage, the Court would examine as to whether impugned provision in a legislation is compatible with the fundamental rights or the Constitutional provisions (substantive judicial review) or it falls foul of the federal distribution of powers (procedural judicial review). If it is not found to be so, no further exercise is needed as challenge would fail. On the other hand, if it is found that Legislature lacks competence as the subject legislated was not within the powers assigned in the list in VII Schedule, no further enquiry is needed and such a law is to be declared as ultravires the Constitution. However, while undertaking substantive judicial review, if it is found that the impugned provision appears to be violative of fundamental rights or other Constitutional rights, the Court reaches the second stage of review. At this second phase of enquiry, the Court is supposed to undertake the exercise as to whether the impugned provision can still be saved by reading it down so as to bring it in conformity with the Constitutional provisions. If that is not achievable then the enquiry enters the third stage. If the offending portion of the statute is severable, it is severed and the Court strikes down the impugned provision declaring the same as unconstitutional. [Paras 79, 80)(85-A-E] G 2.1 Concept of 'Limited Government' and its impact on powers of Judicial Review Undoubtedly, the Constitution of India, as an instrument of governance of the State, delineates the functions and powers of H
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A each wing of the State, namely, the Legislature, the Judiciary and the Executive. It also enshrines the principle of separation of powers which mandates that each wing of the ·state has to function within its own domain and no wing of the State is entitled to trample over the function assigned to the other wing of tlte State. This. fundamental document of governance also contains principle of federalism wherein the Union is assigned cer.taln powers and likewise powers of the State are also prescribed. In this context, the Union Legislature, i.e. the Parliament, as well a,s the State Legislatures are given specific areas in respect of which they have power to legislate. That is so stipulated in Schedule VII of c the Constitution wherein List I enumerates the subjects over which Parliament has the dominion, List II spells out those areas where the State Legislatures have the power to make laws while List III is the Concurrent List which is accessible both to the Union as well as the State Governments. The Scheme pertaining to making laws by the Parliament as well as by the Legislatures D of the State is primarily contained in Articles 245 to 254 of the Constitution. Therefore, it cannot be disputed that each wing of the State to act within the sphere delineated for it under the Constitution. It is correct that crossing these limits would render the action of the State ultra vires the Constitution. When it comes to power of taxation, undoubtedly, power to tax is treated as sovereign power of any State. [Para 82)(85-G-H; 86-A-DJ 2.2 In a democratic society governed by the Constitution, there is a strong tr~nd towards the Constitutionalisation of democratic politics, where the actions~or democratic elected F Government are judged in the light of the Constitution, In this . context, judiciary assumes the roie of protector of the Constitution and democracy, being the ultimate arbiter in all matters involving the interpretation of the Constitution. When it comes. to exercising the power of judicial review of a legislation, the scope of such a power has to be kept in mind and the power is to be G exercised within the limited sphere assigned to the judiciary to undertake the judicial review. Therefore, unless the petitioner demonstrates that the Parliament, in enacting the impugned provision, has exceeded its power prescribed in the Constitution or this provision violates any of the provision, the argument H
Footnotes
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Footnotes
11 based on an intelligible differentia, some real and substantial distinction, which distinguishes persons or things grouped together in the class from others left out of it. (2) The differentia adopted as the basis of classification must have a rational or reasonable nexus with the object sought to be achieved by the statute in question. Thus, Article 14 in its ambit and sweep involves two facets, viz., it permits reasonable classification which is founded on intelligible differentia and accommodates the practical needs of the society and the differential must have a rational relation to the objects sought to be achieved. Further, it does not allow any kind of arbitrariness and ensures fairness and equality of treatment. It is the fonjuris of our Constitution, the fountainhead of justice. Differential treatment does not per se amount to violation of Article 14 of the Constitution and it violates Article 14 only when <there is no reasonable basis and there are several tests to decide whether a classification is reasonable or not and one of the tests will be as to whether it is conducive to the functioning of modern society. [Para 96][94-F-H; 95-A-C] Sri Srinavasa Theatre & Ors. v. Government of Tamil Nadu & Ors. (1992) 2 SCC 643 : [1992] 2 SCR 164; Chiranjit Lal Chowdhuri v. Union ofIndia & Ors. [1950) SCR 869 - relied on. E 4.2 Unearthing black money or checking money laundering is to be achieved to whatever extent possible. Various measures can be taken in this behalf. If one of the measures is introduction of Aadhaar into the tax regime, it cannot be denounced only because of the reason that the purpose would not be achieved fully. Such kind of :menace, which is deep rooted, needs to be tackled by taking multiple actions and those actions may be initiated at the same time. It is the combined effect of these actions which may yield results and each individual action considered in isolation may not be sufficient. Therefore, rationality of a particular measure cannot be challenged on the ground that it has no nexus with the objective to be achieved. Of course, there is a definite objective. For this purpose alone, individual measure cannot be ridiculed. The committee headed by Chairman, CBDT on 'Measures to tackle black money in India and Abroad' has in no uncertain terms, suggested that one singular proof of H
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A identity of a person for entering into finance/business transactions etc may go a long way in curbing this foul practice. That apart, even if solitary purpose of de-duplication of PAN cards is taken into consideration, that may be sufficient to meet the second test of Article 14. It has come on i:ecord tl1at 11.35 lakhs cases of duplicate PAN or fraudulent PAN cards have already been B detected and out of this 10.52 lakh cases pertain to individual assessees. This figure, by no means, can be termed as miniscule, to harm the economy and create adverse effect on the nation. It cannot be said that there is no nexus with the objective sought to be achieved. [Paras 99, 100)(95-G-H; 96-A-F] c 4.3 Validity-of a legislative act cannot be challenged by c·reating artifidal classes by those who are objecting to the said . provision and predicating the a.rgument of discrimination on that basis. When a law is made, all those who are covered by that law ''lire supposed to' follow the same. · No doubt, it is the right of a D Citizen to approach the Court and question the constitutional · validity of a particular law enacted by the Legislature. However, merely ·because a section of persons opposes the law, would not mean that it has become a separate class by itself. Two classes, cannot be created on this basis, namely, one of those who want to be covered by the scheme, and others who do not want to be . E covered thereby. If such a proposition is accepted, every legislation would be prone to challenge on the ground of discrimination. As far as plea of discrimination is concerned, it has to be raised by showing that the impugned law creates two classes without any reasonable classification and treats them differently. [Para 102][97-A-C) 4.4 The principle of equality does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances, in the same position, as the varying needs of different classes of persons often require separate treatment. It is permissible for the State to classify persons for legitimate purposes. The Legislature is also competent to exercise its discr~tion and make classification. In the present scenario the impugned legislation has created two classes, i.e. one class of those persons who are assessees and other class of those persons who are income tax assessees. It is H
13 because of the reason that the impugned provision is applicable A only to those who are filing income tax returns. Therefore, the only question would be as to whether. this classification is reasonable or not. There cannot be any dispute that there is a reasonable basis for differentiation and, therefore, equal pr~tection clause enshrined in Article 14 is not attracted. What B Article 14 prohibits is class legislation and not reasonable classification for the purpose of legislation. All income tax asesl\ees constitute one class and they are treated alike by the impugned provision. [Para 103)(97-D-F) E.P Royappa v. State of Tamil Nadu & Anr. (1974) 4 SCC 3 : [1974) 2 SCR 348 - referred to. c 5.1 Whether impugned provision is violative of Article 19(1)(g) Invocation of'provisions of Article 19(1)(g) of the Constitution by the petitioners was in the context of proviso to sub-section (2) of Section 139AA of the Act which contains the consequences of the failure to intimate the Aadhaar number to such authority in such form and manner as may be prescribed. Insofar as first limb of Section 139AA of the Act is concerned, it was within the competence of the Parliament to make a provision of this nature and further that it is not offensive of Article 14 of the Constitution. This requirement, per se, does not find foul with Article 19(1)(g) either, inasmuch as, quoting the Aadhaar number for purposes mentioned in sub-section (1) or intimating the Aadhaar number to the prescribed authority as per the requirement of sub-section (2) does not, by itself, impinge upon the right to carry on profession or trade, etc. Therefore, it is not violative of Article 19(1)(g) of the Constitution either. [Para 106, 114][98-B-C; 102-E-F] Modern Dental College and Research Centre & Ors, v. State of Madhya Pradesh (2016) 7 SCC 3S3 - referred to. S.2 Though PAN is issued under the provisions of the Act (Section 139A), its function is not limited to giving this number in the income-tax returns or for other acts to be performed under the Act, as mentioned in sub-sections (5), (SA), (SB); S(C), S(D) H
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A and 6 of Section 139A. Rule 114B of the Rules mandates quoting of this PAN in various other documents pertaining to different kinds of transactions listed therein. It is for sale and purchase of immovable property valued at Rs.5 lakhs or more; sale or purchase of motor vehicle etc., while opening deposit account with a sum exceeding Rs.50,000/- with a banking company; while making B deposit of more than Rs.50,000/- in any account with Post Office, savings bank; a contract of a value exceeding Rs.1 lakh for sale or purchase of securities as defined under the Securities Contract (Regulation) Act, 1956; while opening an account with a banking company; making an application for installation of a telephone c connection; making payment to hotels and restaurants when such payment exceeds Rs.25,000/- at any one time; while purchasing bank drafts or pay orders for an amount aggregating Rs.50,000/- or more during any one day, when payment in cash; payment in cash in connection with travel to any foreign country of an amount exceeding Rs.25,000/- at any one time; while making payment of an amount of Rs.50,000/- or more to a mutual fund for purchase of its units or for acquiri.ng shares or debentures/bonds in a company or bonds issued by the Reserve Bank of India; or when the transaction of purchase of bullion or jewellery is made by making payment in cash to a dealer above a specified amount, etc. This shows that for doing many activities of day to day nature, including in the course of business, PA,N is to be given. Thus, in the absence of PAN, it will not be possible to undertake any of the aforesaid activities though this requirement is aimed at curbing the tax evasion. Thus, if the PAN of a person is withdrawn or is nullified, it definitely amounts to placing restrictions on the right to do business as a business under Article 19(l)(g) of the Act. The question would be as to whether these restrictions are reasonable and, therefore, meet the requirement of clause (6) of Article 19. [Para 115][102-H; 103-A-F] 5.3 By making use of the technology, a method is sought to be devised, in the form of Aadhaar, whereby identity of a person is ascertained in a flawless manner without giving any leeway to any individual to resort to dubious practices of showing multiple identities or fictitious identities. That is why it is given the nomenclature 'unique identity'. It is aimed at securing H
15 advantages on different levels some of which are (i) In the first A instance, as a welfare and democratic State, it becomes the duty of any responsible Government to come out with welfare schemes for the upliftment of poverty stricken and marginalised sections of the society. This is even the.ethos oflndian Constitution which casts a duty on the State, in the form of 'Directive Principles of B State Policy', to take adequate and effective steps for betterment of such underprivileged classes. State is bound to take adequate measures to provide education, health care, employment and even cultural opportunities and social standing to these deprived and underprivileged classes. It is not that Government has not taken steps in this direction from time to time. At the same time, c however, harsh reality is that benefits of these schemes have not reached those persons for wh.om that 11re actually meant. India has achieved significant economic growth since independence. In particular, rapid economic growth has been achieved in the last 25 years, after the country adopted the policy of liberalisation D and entered the era of, what is known as, globalisation. Economic growth in the last decade has been phenomenal and for many years, the Indian economy grew at highest rate in the world. At the same time, it is also a fact that in spite of significant political and economic success which has proved to be sound and sustainable, the benefits thereof have not percolated down to E _the poor and the poorest. In fact, such .benefits are reaped primarily by rich and upper middle classes, resulting into widening the gap between the rich and the poor. Not only sustainable development is needed which takes care of integrating growth and ·development, thereby ensuring that the benefit of economic F growth is reaped by every citizen of this country, it also becomes the duty of the Government in a welfare State to come out with various welfare schemes which not only take care of immediate needs of the deprived class but also ensure that adequate opportunities are provided to such persons to enable them to make their lives better, economically as well as socially. Various G welfare schemes are, in fact, devised and floated from time to time by the Government, keeping aside substantial amount of money earmarked for spending on socially and economically backward classes. However, for various reas'ons including corruption, actual benefit does not reach those who are supposed H
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A to receive such benefits. One of the main reasons is failure to . identify these p~rsons for lack of means by which identity could be established of such genuine needy cl;tss. Resultantly, lots of ghosts and duplicate beneficiaries are able to take undue and impermissible benefits. A former Prime Minister of this country has gone to record to say that out of one rupee spent by the B Government for welfare of the downtrodden, only 15 paisa thereof actually reaches those persons for whom it is meant. It cannot be doubted that with UID/Aadhaar much of the malaise in this field can be ta_ken care of. [Para 118)[109-D-H; 110-A-B; 111-C- F) c 5.4 Menace of corruption and black money has reached alarming proportion in this country. It is eating into the economic progress which the country is otherwise achieving. Even as per the observations of the Special Investigation Team (SIT) on black morley headed by Justice M.B. Shah, one of the reasons is that D persons have the option to quote their PAN or UID or passport number or driving licence or any other proof of identity while entering into financial/business transactions. Because of this multiple methods of giving proofs of identity, there is no mechanism/system at present to collect the data available with each of the independent proofs of ID. For this reason, ~ven SIT E suggested that these databases be interconnected. To the same effect ~s the recommendation of the Committee headed by Chairman, CBDT on measures to tackle black money in India and abroad which also discusses the problem of money-laundering being done to evade taxes under the garb of shell companies by the persons who hold multiple bogus PAN numbers under different names or variations of their names. That can be possible if one uniform proof of identity, namely, UID is adopted. It may go a long way to.check and minimise the said malaise. Thirdly, Aadhaar or UID may facilitate law enforcement agencies to take care of problem of terrorism to some exten( and may also be helpful in checking and cracking the crimes. No doubt, it Js the intention of the Government to give fillip to Aadhaar movement !llld encourage the people of thi~ country to enroll themselves under the Aadhaar scheme. [Para 118)(111-G-H; 112-A-E) 5.5 Insofar as Section 139AA of the Income Tax Act, 1961 H
17 is concerned, the explanation of the respondents is that the A primary purpose of introducing this provision was to take care of the problem of multiple PAN cards obtained in fictitious names. Such multiple cards in fictitious names are obtained with the motive of indulging into money laundering, tax evasion, creation and channelising of black money. It is mentioned that in a de- B duplication exercises, H.35 lakhs cases of duplicate PANs/ fraudulent PANs have been detected. Out of these, around 10.52 lakhs pertain to individual assessees. Parliament in its wisdom thought that one PAN to one person can be ensured ,by adopting Aadhaar for allottment of PAN to individuals. As of today, that is the only method available i.e. by seeding of existing PAN with C Aadhaar. It is perceived as the best method, and the only. robust . method of de-duplication of PAN database. The respondents have claimed that linking of Aadhaarwith PAN is consistent with India's international obligations and goals. In this behalf, it is pointed out that India has signed the Inter-Governmental Agreement (IGA) D with the USA on July 9, 2015, for Improving International Tax Compliance and implementing the Foreign Account Tax Compliance Act (FATCA). India has also signed a multilateral agreement on June- 3, 2015, to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters under the Common E Reporting Scheme (CRS), formally referred to as the Standard for Automatic Exchange of Financial Account Information (AEoI). As part of India's commitment under FATCA and CRS, financial sector entities, capture the details about the customers using the PAN. In case the PAN or submitted details ar.e found to be F incorrect or fictitious, it will create major embarrassment for the country. Under Non-filers Monitoring System (NMS), Income Tax Department identifies non-filers with potential tax liabilities. Data analysis is carried out to identify non-filers about whom specific information was available in AIR, CIB data and TDS/TCS Returns. Email/SMS and letters are sent to the identified non- G filers communicating the information summary and seeking to know the submission details of Income tax return. In a large number of cases (more than 10 lac PAN every year) it is seen that the P~N holder neither submits the Tesponse and in many cases the letters are return unserved. Field verification by fields H
18 SUPREME COURT REPORTS [2017) 7 S.C.R.
A formations have found that in a large number of cases, the PAN holder is untraceable. In many cases, the PAN holder mentions that the transaction does not relate to them. There is a need to strengthen PAN by linking it with Aadhaar/biometric information to prevent use of wrong PAN for high value transactions.(Paras 119, 12111112-G-H; 113-A-B; 115-E-H; 116-A-CJ B 5.6 The impugned provision is aimed at seeding Aadhaar with PAN. One of the main objectives is to de-duplicate PAN cards and to bring a situation where one person is not having more than one PAN card or a person is not able to get PAN cards in assumed/fictitious names. In such··a scenario, if those persons c who violate Section 139AA of the Act without any consequence, the provision shall be rendered toothless. It is the prerogative of the Legislature to make penal provisions for violation of any law made by it. In the instant case, requirement of giving Aadhaar . enrolment number to the designated authority or stating this D number in the income tax returns is directly connected with the . issue of duplicate/fake PANs. Therefore, it cannot be denied that there has to be some provision stating the consequen·ces for not complying with the requirements of Section 139AA of the Act, more particularly when these requirements are found as not violative of Articles 14 and 19. If Aadhar number is not given, . E the said exercise may not be possible. Sub-section (1) of Section 139AA stipulates that those who are not PAN holders, while applying for PAN, they are required to give Aadhaar number. At the same time, as far as existing PAN holders are concerned, since the impugned provisions are yet to be considered on the F touchstone of Article 21 of the Constitution, including on the debate around Right to Privacy and human dignity, etc. as limbs of Article 21, till the said aspect of Article 21 is decided by the Constitution Bench a partial stay of the said proviso is necessary. Those who have already enrolled themselves under Aadhaar scheme would comply with the requirement of sub-sectiol\ (2) of G Section 139AA of the Act. Those who still want to enrol are free to do so. However, those assessees who are not Aadhaar card holders and do not comp!y with the provision of Section 139(2), ,,_. · their PAN cards be not treated as invalid for the time being. It is only to facilitate other transactions which are mentioned in Rule H
19
114B of the Rules. This is held so because of very severe consequences that entail in not adhering to the requirement of sub-section (2) of Section 139AA of the Act. A person who is holder of PAN and if his PAN is invalidated, he is bound to suffer immensely in his day to day dealings, which situation should be avoided till the Constitution Bench authoritatively determines the argument of Article 21 of the Constitution. Since this course of action is adopted, in the interregnum, it would be permissible for the Parliament to consider as to whether there is a need to tone down the effect of the ·said proviso by limiting the consequences. However, at the same time, proviso to Section 139AA(2) cannot be read retrospectively. If failure to intimate the Aadhaar number renders PAN void ab initio with the deeming provision that the PAN allotted would be invalid as if the person had not applied for allotment of PAN would have rippling effect of unsettling settled rights of the parties. It has the effect of undoing all the acts done by a person on the basis of such a PAN. It may have even the effect of incurring other penal consequences under the Act for earlier period on the ground that there was no PAN registration by a particular assessee. The rights which are already accrued to a person in law cannot be taken away. Therefore, this provision needs to be read down by making it clear that it would operate prospectively.[Paras 122, 124, 125, 126][116-D-F; 119- E B, C-H; 120-A-C) · 6. The impugned provision has passed the mu:;ter of Articles 14 and 19(1)(g) of the Constitution. However, more stringent test as to whether this statutory provision violates Article 21 or not is yet to be qualified. Therefore, constitutional F validity of this provision is upheld subject to the outcome of batch of petitions referred to the Constitution Bench where the said issue is to be examined. It is also necessary to highlight that a large section of citizens feel concerned about possible data leak, even when many of those support linkage of PAN with Aadhaar. · This is a concern which needs to be addressed . ,by the G Government. It is important that the said apprehensions are assuaged by taking proper measures so that confidence is instilled among the public at large that there is no chance of unauthorised leakage of data whether it is done by tightening the operations of H
20 SUPREME COURT REPORTS [2017] 7 S.C.R.
A the contractors who are given the job of enrollment, they being private persons or by prescribing severe penalties to those who are found guilty of leaking the details, is the outlook of the Government.· However, measures in this behalf are absolutely essential and it would be in the fitness of things that proper B scheme in this behalf is devised at the earliest.[Para 127)(120- H; 121-A-D) MP. Sharma & Ors. v. Satish Chandra & Ors. AIR 1954 SC 300 : [1954) SCR 1077; Kharak Singh v. State of UP. & Ors. AIR 1963 SC 1295 : i196:iJ SCR 332; Ram Jawaya Kapoor v. State of Punjab [1955) 2 SCR c 225; Madan Mohan Pathak v, Union of India AIR 1978 SC 803 : [1978] 3 SCR 334; Bakhtawar Trust v. MD. Narayan (2003) 5 SCC 298 : [2003] 1 Suppl. SCR 1; R.K. Dalmia v. Justice S.R. Tendolkar [1959) SCR 279; National Legal Services Authority v. Union of India & D Ors. (2014) 5 SCC 438; Sunil Batra & Am: v. Delhi Administration & Ors. (1978) 4 SCC 494 : [1979) 1 SCR 392; Aruna Ramachandra Shdnbaug v. Union of India & Ors. (2011) 4 SCC 454 : [2011] 4 SCR 1057; Nagpur Improvement Trust & Am: v. Vithal Rao & Ors. (1973) 1 SCC 500 : [1973] 3 SCR 39; Subramanian E Swamy V, Director, Central Bureau of Investigation & . Am: (2014) 8 SCC 682 : (2014] 6 SCR 873; M Nagaraj & Ors. v. Union of India & Ors. (2006) 8 SCC 212 : [2006] 7 Suppl. SCR 336; Gobind v. State of Madhya Pradesh (1975) 2 SCC 148 : [1975] 3 SCR 946; Anuj F Garg v. Hotel Association of India (2008) 3 SCC 1 : [2007] 12 SCR 991; Dayawati v. lnderjit [1966] 3 SCR 275; Sharda v. Dharmpal (2003) 4 SCC 493 : [2003] 3 SCR 106; K.T. Plantation Private Limited & Am: v. State of Karnataka [2011) 13 SCR 636 : (2011) 9 SCC 1; State of Madhya Pradesh v. Rakesh Kohli & Am: G (2012) 6 SCC 312 : (2012] 6 SCR 661; Secretary to Government of Madras & Am: v. P.R. Sriramulu & Am: (1996) 1 sec 345 : [1995) 5 Suppl. SCR 551; GC. Kdnungo v. State of Orissa (1995) 5 SCC 96 : [1995] _! Suppl. SCR 510; Mohd. Hanif Quareshi & Ors. v. H
21
State of Bihar AIR 1958 SC 731 : [1959] SCR 629; A Synthetics and Chemicals Ltd. & Ors. v. State of UP. & Ors. (1990) 1 SCC 109 : [19891 1 Suppl. SCR 623; Goa Foundation & Am: v. State of Goa & Am: (2016) 6 SCC 602 : [2016] 1 SCR 1025; PUCL v. Union of India (2011) 14 SCC 331; State of Kera/a & others v. B President, Parents Teachers Association, SNVUP and Others (2013) 2 SCC 705 : [2013] 4 SCR 66; Peoples Union for Civil Liberties (PDS Matter) v. Union of India & Ors. (2013) 14 SCC 368; Peoples Union for Civil Liberties v. Union of India & Ors. 2010 (5) SCC 318; Lokniti Foundation v. Unio.n of India & Ors. 2017 (7) c SC.C 155; R. Rajagopal & Am: v. State of Tamil Nadu & Ors. (1994) 6 SCC 632 : [1994] 4 Suppl. SCR 353 - referred to. Roe v. Wade 410 U.S. 113 (1973) - referred to. Case Law Reference D [1954] SCR 1077 referred to Para 9 [1964] SCR 332 referred to Para9 [1955] 2 SCR 225 referred to Para 21 [1978] 3 SCR 334 referred to Para 22 E [2003) 1 Suppl. SCR ·1· referred to Para 22 [1959] SCR 279 referred to Para 28 (2016) 1 sec ~53 referred to Para 30 [1967] 2 SCR 454 relied on Para 35 (2014) 5 sec 438 referred to Para 37 F [1979) 1 SCR 392 referred to Para 37 [20111 4 SCR 1057 referred to Para 37 [1973] 3. SCR 39 referred to Para40 . !
[2014) 6 SCR 873 referred to ·· Para 41 . G .[2006] 7 Suppl. SCR "336 referred to Para44 ·[1975) 3 SCR 946 referred to Para 46 [2007] 12 SCR 991 referred to Para 46 [1966] 3 SCR 275 referred to Para 48 H
22 SUPREME COURT REPORTS . [2017] 7 S.C.R.
A [2003) 3 SCR 106 referred to Para 50 [2011) 13 SCR 636 referred to Para 52 [2012] 6 SCR 661 referred to Para 53 [1995) 5 Suppl. SCR 551 referred to Para 54 B [1995) 1 Suppl. SCR 510 referred to Para 54 [1959] SCR 629 referred to, Para 54 [1989) 1 Suppl. SCR 623 referred to Para 55 [2016] 1 SCR 1025 referred to Para 56 c (2011) 14 sec 331 referred to Para 61 [2013) 4 SCR 66 referred to Para 62 (2013) 14 sec 368 referred to Para 64 (2010) 5 sec 318 referred to Para 65 D (2011) 1 sec 155 referred to Para 66 [1994) 4 Suppl. SCR 353 referred to Para 71 [2008] 17 SCR 120 relied on Para 74 [2008) 4 SCR 1 relied on Para 76 E [1996] 3 SCR 721 relied on Para 77 (2015) 12 SCR 1106 relied on Para 78 (2016) 11 SCALE 1 relied on Para 82 F [1971) 3 SCR 607 relied on Para 92 [1992) 2 SCR 164 relied on Para 94 (1950) SCR 869 relied on Para 94 [1974) 2 SCR 348 referred to Para 104 G CIVIL ORIGINAL'JURISDICTION: Writ Petition (C) No. 247 of2017. Under Article 32 of the Constitution oflndia WITH
H W. P. (C) Nos. 277 and 304 of 2017.
23
Atmaram N. S. Nadkarni, ASG, Salman Khurshid, Arvind P. Datar, A Shyam Divan, Sr. Advs, Sriram P., Vishnu Shankar M. S., Mukund P., Vishnu Jain, Govind Manoharan, Ms. Sneha Ravi Iyer, Ms. Athira G Nair, Ms. Sanchita, Pratap Venugopal, Ms. Surekha Raman, Udayaditya Banerjee, Prasanna S., Ms. Niharika , Ms. Kanika Kalaiyarasan, Ms. Samiksha G, Apar Gupta, M/s. K. J. John & Co., Anando Mukherjee, B Nipun, Saxena, Ms. DivyaAnand, Kumar Shivam, Dr. Arghya Senguptl'i, Saurabh Kirpal, Zoheb Hossain, Ritesh Kumar, Abhinav Mukherji, Ms. Ranjeeta Rohatgi, Mrs. Anil Katiyar, Santosh Rebello, Jai Dehadrai, Ms. Sneha Tendulkar, Ms. Nivedita Nair, Anil Gulati, Ms. Ritwika Sharma, Ms. Adeeba N., Advs. for the appearing parties.
Judgment
The Judgment of the Court was delivered by c A. K. SIKRI, J. I. In these three writ petitions filed by the petitioners, who claim themselves to be pubic spirited persons, challenge is laid to the constitutional validity of Section 139AA of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'), which provision has been inserted by the amendment to the said Act vide'FinanceAct, 2017. D Section 139AA of the Act reads as under: "Quoting of Aadhaar number. -(1) Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number- E (i) in the application form for allotment of permanent account number; (ii) in the return of income: Provided that where the person does not possess the Aadhaar Number, the Enrolment ID ofAadhaar application form issued to F him at the time of enrolment shall be quoted in the application for permanent account number or, as the case may be, in the return of income furnished by him. (2) Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such . G
authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette:
24 SUPREME COURT REPORTS [2017]7 S.C.R.
A Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be deemed to be invalid and the other provisions of this Act shall apply, as if the person had not applied for allotment of permanent account number. B (3) The provisions of this section shall not apply to such person or class or classes of persons or any State or part of any State, as may be notified by the Central Government in this behalf, in the Official Gazette. Explanation. - For the purposes of this section, the expressions - ·C (i) "Aadhaar number'', "Enrolment" and "resident" shall have the same meanings respectively assigned to them in clauses (a), (m) and (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, Bi;nefits and Services) Act, 2016 (18 of 2016); D (ii) "Enrolment ID" means a 28 digit Enrolment Identification Number issued to a resident at the time of enrolment."
22. Even a cursory look at the aforesaid provision makes it clear that in the application forms for allotment of Permanent Account Number (for short, 'PAN') as well as in the income-tax returns, the assessee is E obliged to quote Aadhaar number. This is necessitated on any such applications for PAN or return of income on or after July 01, 2017, which means from that date quoting ofAadhaar number for the aforesaid purposes becomes essential. Proviso to sub-section (1) gives relaxation from quoting Aadhaar number to those persons who do not possess Aadhaar number but have already applied for issuance of Aadhaar card. F In their cases, the Enrolment ID of Aadhaar application form is to be quoted. It would mean that those who would not be possessing Aadhaar card as on-JulyOI, 2017 may have to necessarily apply for enrolment of A.adhaar before July 01, 2017.
33. The effect of this provision, thus, is that every person who desires to obtain PAN card or who is an assessee has to necessarily enrol for Aadhaar. It makes obtaining of Aadhaat card compulsory for those persons who are income-tax assessees. Proviso to sub-section (2) of Section 139AA of the Act stipulates the consequences of failure '·.
BINOY VISWAM v. UNION OF INDIA & ORS. 25 [A. K. SIKRI, J.]
to intimate the Aadhaar number. In those cases, PAN allotted to such persons would become invalid not only from July 01, 2017, but from its inception as the deeming provision in this proviso mentions that PAN would be invalid as ifthe person had not applied for allotment of PAN, i.e. from the very beginning. Sub-section (3), however, gives discretion to the Central Government to exempt such person or class or classes of persons or any State or part of any State from the requirement of quoting Aadhaar number in the application form for PAN or 'in the return of income. The challenge is to this compulsive nature of provision inasmuch as with the introduction of the aforesaid provision, no discretion is left with the income-tax assessees insofar as enrolment under the Aadhaar C (Targeting Delivery of Financial and Other Sub~idies, Benefits and Services) Act, 2016 (hereinafter referred to as the 'Aadhaar Act') is concerned. According to the petitioners, though Aadhaar Act prescribes that enrolment u11der the said Act is voluntary and gives choice to a person to enrol or not to enrol himself and obtain Aadhaar card, this D compulsive element thrusted in Section'l39AA of the Act makes the said provision unconstitutional. The basis on which the petitioners so contend would be taken note of at the appropriate stage. Purpose of these introductory remarks was ta highlight the issue involved in these writ petitions at the threshold. · E
44. Before we take note of the arguments advanced by the petitioners and the rebuttal.thereof by the respondents, it would be in the fitness of things to take stock of historical facts pertaining to the Aadhaar scheme and what Aadhaar enrolment amounts to. Aadhaar Scheme and its administrative and statutory F framework
55. Respondent No. I, Union of India, through the Planning Commission, issued Notification dated January 28, 2009, constituting the Unique Identification Authority of India (for short, 'UIDAI') for the purpose of implementing of Unique Identity (UID) scheme wherein a G UID database was to be collected from the residents ofindia. Pursuant to the said Notification, the Government ofindia appointed Shri Nandan Nilekhani, an entrepreneur, as tlie Chairman of the UIDAI on July 02,
2009. According to this scheme, every citizen ofindia is entitled to enrol herself/himself with it and get a unique, randomnly selected 12 digit H
26 SUPREME COURT REPORTS [2017] 7 S.C.R.
A number. For such enrolment, every person so intending would have to provide his/her personal information along with biometric details such a fingerprints and iris scan for future identification. Accordingly, it is intended to create a centralized database under the UIDAI with all the above information. The scheme was launched in September 2010 in the rural areas of Maharashtra and thereafter extended all over India. One B of the objects of the entire project was non-duplication and elimination of fake identity cards.
66. On December 03, 2010, the National Identification Authority· oflndia Bill, 2010 was introduced {n the Rajya Sabha. On December 13, 2011, the Standing Committee Report was submitted to the Parliament c stating that both the Bill and project should be re-considered. The Parliamentary Standing Committee on Finance rejected the Bill of2010 as there was opposition to the passing of the aforesaid Bill by the Parliament. Be that as it may, the said Bill of 2010 did not get through. The result was that as on that date, Aadhaar Scheme was not having D any statutory backing but was launched and contifmed to operate in exercise of executive power of the Government. It may also be mentioned that the Government appointed private enrollers and these private collection/enrolment centres run by private parties continued to enrol the citizens under the UID scheme.
77. Writ Petition (Civil) No. 494 of2012, under Article 32 of the Constitution of India, was preferred by Justice K.S. Puttuswamy, a former Judge of the Karnataka High Court before this Court, challenging the UID scheme stating therein that the same does not have any statutory basis and it violated the 'Right to Privacy', which is a facet of Article 21 of the Constitution. This Court decided to consider the plea raised in the said writ petition and issued notice. Vide order dated September 23, 2013, the Court also passed the following directions: "In the meanwhile, no person should suffer for not getting·the Aadhaar card in spite of the fact that some authority had issued a circular making it mandatory and when any person applies to get the Aadhaar Card voluntarily, it may be checked whether that person is entitled for it under the law and it should not be given to any illegal immigrant." In the meanwhile, various writ petitions were filed by public spirited citizens and organisations challenging the validity of the Aadhaar scheme H
BINOY VISWAM v. UNION OF INDIA & ORS. 27 [A. K. SIKRI, J.]
and this Court has tagged all those petitions along with Writ Petition A (Civil) No. 494 of2012.
88. In the meantime, in some proceedings before the Bombay High Court, the said High Court passed orders requiring UIDAI to provide biometric information to CBI for investigation purposes with respect to a criminal trial. This order was challenged by UIDAI by filing Special B Leave Petition (Criminal) No. 2524 of2014, in which orders dated March 24, 2014 were passed by this Court restraining the UIDAI from . transferring any biometric information t-0 any agency without the written consent of the concerned individual. The said order is in the following terms: c ."In the meanwhile, the present petitioner is restrained from transferring any biometric information of any person who has been allotted the Aadhaar number to any other agency without his consent in writing. More so, no person shall be deprived of any service for want of D Aadhaar number in case he/she is otherwise eligible/entitled. All the authorities are direeted to modify their forms/circulars/likes so ·as to not compulsorily require the Aadhaar number in order to meet the requirement of the interim order passed by this Court forthwith." E
99. Thereafter, the aforesaid writ petitions and special leave petitions were taken up together. Matter was heard at length by a three Judges Bench of this Court and detailed arguments were advanced by various counsel appearing for the petitioners as well as the Attorney General for India who appeared on behalf of the Union oflndia. As stated above, one of the main grounds of attack on Aadhaar Card scheme was that F the very collection of biometric data is violative of the 'Right to Privacy', which, in turn, violated not only Article 21 of the Constitution oflndia but otherArticles embodying the fundamental rights guaranteed under Part III of the Constitution. This argument was sought to be rebutted by the respondents with the submission that in view of eight Judges' Bench G judgment of this Court in M.P. Sharma & Ors. v. Satish Chandra & Ors. 1 and that of six Judges' Bench in Kharak Singh v. State of U.P. & Ors.:, the legal position regarding the existence of fundamental Right. to 1 AIR 1954 SC 300 2 AIR 1963 SC 1295 H
28 SUPREME COURT REPORTS [2017] 7 S.C.R.
A Privacy is doubtful. At the same time, it was also accepted that subsequently smaller Benches of two or three Judges of this Court had given the judgments recognising the Right to Privacy as part of Article 21 of the Constitution. On that basis, respondents submitted that the matters were required to be heard by a Larger Bench to debate important questions like: B (i) Whether there is any Right to Privacy guaranteed under the Constitution; and (ii) If such a Right exists, What is the source and what are the contours of such a Right as there is no express provi§fon in the c Constitution adumbrating the Right to Privacy.
1010. Though, this suggestion of the respondents were opposed by the counsel for the petitioners, the said Bench still deemed it proper ~o refer the matter to the Larger Bench and the reasons for taking this course of action are mentioned in paras 12 and 13 of the order dated D August 11, 2015 which reads as under: "12. We are of the opinion that the cases on hand raise far reaching questions of importance involving_ interpretation of the Constitution, What is at stake is the amplitude of the fundamental rights including that precious and inalienable right under Article
E 21. If the observations made in MP. Sharma (supra) and Kharak Singh (supra) are' to be read literally and accepted as the law of this country, the (undamental rights guaranteed under the Constitution oflndia and more particularly right to liberty under Article 21 would be- denuded of vigour and vitality. At the same time, we are also of the opinion that the institutional integrity and F judicial discipline require that pronouncement made by larger Benches of this Court cannot be ignored by the smaller Benches without appropriately explaining the reasons for not following the pronouncements made by such larger Benches. With due respect to all the learned Judges who rendered the subsequent judgments G - where right to privacy is asserted or referred to their Lordships concern for the liberty of human beings, we are of the humble opinion that there appears to be certain amount of apparent unresolved contradiction in the law declared by this Court.
13. Therefore, in our opinion to give a quietus to the kind of controversy raised in this batch of cases once for all, it is better H
BINOY VISWAM v. UNION OF INDIA & ORS. 29 [A. K. SIKRI, J.]
that ratio decidendi of MP. Sharma (supra) and Kharak Singh A (supra) is scrutinized and the jurisprudential correctness of the subsequent decisions of this Court where the right to privacy is either asserted or referred be examined and authoritatively decided by a Bench of appropriate strength. · (emphasis supplied)" B
1111. While referring the matter as aforesaid, by another order of the even date, the Bench expressed that it would be desirable tl;J.at the matter be heard at the earliest. On the same day, yet another order was passed by the Bench in those petitions giving certain interim directions which would prevail till thematter is finally decided by the Larger Bench. c We would like to reproduce this order. containing the said interim arrangement in toto: "I N T E R I M 0 R D E R After the matter was referred for decision by a larger Bench, the learned counsel for the petitioners prayed for further interim D orders. The last interim or.der in force is the order of this Court dated 23 .9.2013 which reads as follows:- "All the matters require to be heard finally. List all matters for final hearing after the Constitution Bench is over.. E In the meanwhile, no person should suffer for not getting the Aadhaar card inspite of the fact that some authority had issued a circular making it mandatory and when any person applies to get the Aadhaar card voluntarily, it may be checked whether that . person is entitled for it under the law and it should not be given to any illegal immigrant." F It was submitted by Shri Shyam Divan, learned counsel for the petitioners that the petitioners having pointed out a serious breach of privacy in their submissions, preceding the reference, this Court may grant an injunction restraining the authorities from proceeding further in the matter of obtaining biometrics etc. for an Aadhaar G card. Shri Shyam Divan submitted that the biometric information _ of an individual can be circulated to other authorities or corporate bodies which, in turn can be used by them for commercial exploitation and, therefore, must be stopped.
30 SUPREME COURT REPORTS [2017] 7 S.C.R.
A The learned Attorney General pointed out, on the other hand, that this Court has at no point of time, even while making the inter!m order dated 23.9.2013 granted an injunction restraining the Unique Identification Authority oflndia from going ahead and obtaining biometric or other information from a citizen for the purpose of a Unique Identification Number, better known as B "Aadhaar card". It was further submitted that the respondents have gone ahead with the project and have issued Aadhaar cards to about 90% of the population. Also that a large amount of money has been spent by the Union Government on this project for issuing Aadhaar cards and that in the circumstances, none of the well- c known consideration for grant of injunction are in favour of the petitioners. The learned Attorney General stated that the respondents do not share any personal information of an Aadhaar card holder through biometrics or otherwise with any other person or authority. D This statement allays the apprehension for now, that there is a widespread breach of privacy of those to whom an Aadhaar card has been issued. It was further contended on behalf of the petitioners that there still is breach of privacy. This is a matter which need not be gone into further at this stage. ·
E The learned Attorney General has further submitted that the Aadhaar card is of great benefit since it ensures an effective implementation of several social benefit schemes of the Government like MGNREGA, the distribution of food, ration and kerosene through PDS system and grant of subsidies in the distribution of LPG It was, therefore, submitted that restraining the respondents from issuing further Aadhaar cards or fully utilising the existing Aadhaar cards for the social schemes of the Government should be allowed. The learned Attorney General further stated that the respondent Union of India would ensure that Aadhaar cards would only be issued on a consensual basis after informing the public at large about the fact that the preparation of Aadhaar card involving the parting of biometric information of the individual, which shall however not be used for any purpose other than a social benefit schemes. H
BINOY VISWAM v. UNION OF INDIA & ORS: 31 [A. K. SIKRI, J.]
Having considered the matter, we are ofthe view that the balance of interest would be best served, till the matter is finally decided by a larger Bench if the U11ion of India or the UIDA proceed in the following manner:- !. The Union oflndia shall give wide publicity in the electronic and print media including radio and television networks that it is not mandatory for a citizen to obtain an Aadhaar card;
2. The production of an Aadhaar card will not be condition for obtaining any benefits otherwise due to a citizen;
3. The Unique Identification Number or the Aadhaar card will not be used by the respondents for any purpose other than the PDS C Scheme and in particular for the purpose of distribution of foodgrains, etc. and cooking fuel, such as kerosene. The Aadhaar card may also be used for the purpose of the LPG Distribution Scheme;
4. The information about an individual obtained by the Unique D Identification Authority of India while issuing an Aadhaar card shall not be used for any other purpose, save as above, except as may be directed by a Court for the purpose of criminal investigation. Ordered accordingly." E
1212. In nutshell, the direction is that obtaining anAadhaar Card is not mandatory and the benefits due to a citizen under any scheme are not to be denied in the absence ofAadhaar Card. Further, unique identification number or the Aadhaar Card was to be used only for the PDS Scheme and, in particular, for the purpose of distribution of food grains etc. and cooking fuels suc.h as Kerosene and LPG Distribution F Scheme, with clear mandate that it will not be used by the respondents for any other purpose. Even the information about the individual collected while issuing an Aadhaar Card was not to be used for any other. purpose, except when it is directed by the Court for the purpose of criminal investigation. Thus, making of Aadhaar Card was not to be made G mandatory and it was to be used only for PDS Scheme and LPG Distribution Scheme. Thereafter, certain applications for mo.dification of the aforesaid order dated August 11, 2015 was filed before this Court by the Union oflndia and a five Judges Bench of this Court was pleased to pass the following order: H
32 SUPREME COURT REPORTS [2017] 7 S.C.R.
A "3. After hearing the learned Attorney General for India and other learned senior counsels, we are of the view that in paragraph 3 of the Order dated August 11, 2015, if we add, apart from the other two Schemes, namely, PDS .Scheme and the LPG Distribution Scheme, the Schemes like The Mahatma Gandhi National Rural Employment Guarantee Scheme 12 (MGNREGS), B National Social Assistance Progi:aipme (Old Age Pensions, Widow Pensions, Disability Pensions) Prime Minister's Jan Dhan Yojana (PMJDY) and Employees' Provident Fuq4 Organisation (EPFO) for .the present, it would not dilute earlier order passed by this Court. Therefore, we now include the aforesaid ~chemes apart c from the other two Schemes that this Court has permitted in its earlier order dated August~ 1, 2015.
4. We impress upon the Union oflndia that it shall strictly follow . all the earlier orders passed by this Court commencing from September 23, 2013.
D 5. We will also make it clear that the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court qne way or the other." Thus, Aadhaar is permitted for some more schemes as well.
1313. The petitioner herein, laying stress on' the above orders, plead that from a perusal of the various interim orders passed by this Court it is· amply clear that the Court has reiterated the position that although there is no interim.order against the colle~on of information from the citizens for the purpose of enrolment for Aadhaar, the scheme is purely voluntary and the same is not to be made mandatory by the Government. F
1414. While matters stood thus, the Government oflndia brought in a legislation to govern the Aadhaar Scheme with the enactment of the Aadhaar (Targeted Delivery of Financial and other subsidies, benefits and services) Act, 2016.(hereinafter referred to as the 'Aadhaar.Act').
1515. Introduction to the said Act gives the reasons forp.assing that Act and Statement of Objects and Reasons mention the objectives sought to be achieved with the enactment of Aadhaar Act. Introduction reads asunder: "The Unique Identification Authority oflndia was established by a resolution of the Government of India in 2009. It was meant H
BINOY VISWAM·v. UNION OF INDIA & ORS. 33 [A. K. SIKRI, J.] 0
primarily to lay down policies and to implement the Unique A Identification Scheme, by which residents of India were to be provided unique identity number. This number would serve as proof of identity and could be used for identification ofbeneficiaries for transfer of benefits, subsidies, services and other purposes. Later on, it was felt that the process of enrolment, authentication, B security, confidentiality and use of Aadhaar related information be made statutory so as to facilitate the use of Aadhaar·number for delivery of various benefits, subsidies and services, the expenditures of which were incurred from or receipts therefrom formed part of the Consolidated Fund oflndia. c. The Aadhaar (Targeted Delivery ofF inancial and Other Subsidies, Benefits and Services) Bill, 2016 inter alia, provides for establishment ofUnique Identification Authority of India, issuance of Aadhaar number to individuals, maintenance and updating of information in the Central Identities Data Repository, issues pertaining to security, privacy and confidentiality of information as well as offences and penalties for contravention of relevant statutory provisions."
1616. In the Statement of Objects and Reasons, it is inter alia mentioned that though number of social benefits schemes have been floated by the Governrnent, the failure to establish identity of an individual has proved to be a major hindrance for successful implementation of those programmes as it was becoming difficult to ensure that subsidies, benefits and services reach the unintended beneficiaries in the absence of a credible system to authenticate identity of beneficiaries. Statement of Objects and Reasons also discloses that over a period of time, the use of Aadhaar Number has been increased manifold and, therefore, it is also necessary to take measures relating to ensuring security of the information provided by the individuals while enrolling for Aadhaar Card. Having these parameters in mind, para 5 of the Statement of Objects and Reasons enumerates the objectives which Aadhaar Act seeks to achieve. It reads as under: G
""5. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 inter alia, seeks to provide for - (a) issue of Aadhaar numbers to individuals on providing his H
34 SUPREME COURT REPORTS [2017] 7 S.C.R.
A demographic and biometric information to the Unique Identification Authority oflndia; (b) requiring Aadhaar numbers for identifying an individual for delivery of benefits, subsidies, i(nd services the expenditure is incurred from or the receipt therefrom forms part of the B Consolidated Fund oflndia; (c) authentication of the Aadhaar number of an Aadhaar number holder in relation to his demographic and biometric information; (d) establishment of the Unique Identification Authority oflndia consisting of. a Chairperson, two Members and a Member- c Secretary to perform functions in pursuance of the objectives above; (e) maintenance and updating the information of individuals in the Central Identities Date Repository in such manner as may be specified by regulations; 0 D · (f) measures pertaining to security, privacy and confidentiality of information in possession or control of the Authority including information stored in the .Central Identities Date Repository; and (g) offences and penalties for contravention of relevant statutory . E provisions."
1717. Some of the provisions of this Act, which have bearing on the matter that is being dealt with herein, may be taken note of. Sections 2(a), 2(c), 2(d), 2(e), 2(g), 2(h), 2(k), 2(1), 2(m), 2(n), Section 3, Section 7, Section 28, Section 29 and Section 30 reads as under: F "2(a) "Aadhaar number" means an identification number issued to an individual under sub-section (3) of section 3; xxx xxx xxx 2(c) "authentica.tion" means the pr.ocess by which the Aadhaar G number alongwith demographic .information or biometric information of an individual is submitted to the Central Identities . Data Repository for its verification and such Repository verifies the correctness, or the lack thereof, on the basis of information available with it;
BINOY VISWAM v. UNION OF INDIA & ORS. 35 [A. K. SIKRI, J.]
2(d) "authentication record" means the record. of the time of A authentication and identity of the requesting entity and the response provided by the Authority thereto; 2(e) "Authority" means the Unique Identification Authority of India established under sub-section ( 1) of section 11; xxx xxx xxx B
2(g) "biometric information" means photograph, finger print, Iris scan, or such other biological attributes of an individual as may be specified by regulations; 2(h) "Central Identities Data Repository" means a centralised c database in one or more locations containing all Aadhaar numbers issued to Aadhaar number holders along with the corresponding demographic information and biometric information of such individuals and other information related thereto; xxx xxx xxx D 2(k) "demographic information" includes information relating to the name, date of birth, address and other relevant information of an individual, as may be specified by regulations for the purpose of issuing an Aadhaar number, but shall not include race, religion, caste, tribe, ethnicity, language, records of entitlement, income or E medical history; · 2(1) "enrolling agency" means an agency appointed by the Authority or a Registrar, as the case may be, for collecting demographic and biometric information of individuals under this Act; F 2(m) ''.enrolment" means the process, as may be specified by regulations, to collect demographic and biometric information from individuals by the enrolling agencies for the purpose of issuing Aadhaar . . numbers to such individuals under this Act; 2(n) "identity information" in respect ofan individual, includes his G Aadhaar number, his biometric information and his demographic information; .
3. Aadhaar number. - (1) Every resident shall be entitled to obtain an Aadhaar number by submitting his demographic H
36 SUPREME COURT REPORTS [2017] 7 S.C.R.
A information and biometric information by undergoing the process of enrolment: Provided that the Central Government may, from time to time, notify such. other category of individuals who may be entitled to obtain an Aadhaar number. B (2) The enrolling agency shall, at the time of enrolment, inform the individual undergoing enrolment of the following details in such manner as may be specified by regulations, namely: _(a-) the manner_ in which the information shall be used; '
c · (b) the nature of recipients with whom· the information is intended to be shared during authentication; and (c) the existence of a right to access information, the procedure for making requests for such access, and details of the person or department in-charge to whom such requests can be D made. (3) On receipt of the demographic.information and biometric information under sub~section (l ), the Authority shall, after verifying the information, in such manner as may be specified by regulations, issue an Aadhaar number to such individual. E xxx xxx xxx
7. Proof of Aadhaar number necessary for receipt of certain subseidies, benefits ·and services, etc. - The Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition F for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund oflndia, require that sui;h individual undergo authentication, or furnish proof of possession of Aadhaar number or in the case of an individual to whom no Aadhaar µumber has been assigned, such individual makes an application for enrolment: G Provided that if an Aadhaar number is not assigned to an individual, the individual shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service. xxx xxx xxx H
BINOY VISWAM v. UNION OF INDIA & ORS. 37 [A. K. SIKRI, J.]
28. Security and confidentiality of information - (1) The A Authority shall ensure the security 9f identity information and authentication records ofindividuals. (2) Subject to the provisions of this Act, the Authority shall ensure confidentiality of identity information and authentication records ofindividuals. B (3) The Authority shall take all necessary measures t.o ensure that the information in the possession or control of the Authority, including information stored in the Central Identities Data Repository, is se3ured and protected f!gainst access, use or disclosure not permitted under this Act or regulations made · c thereunder, and against accidental or intentional destruction, loss . or damage. (4) Without prejudice to sub-sections (1) and (2), the Authority shall- (a) adopt and implement appropriate technical and organisational D· security measures; (b) ensure that the agencies, consultants, advisors or other persons appointed or engaged for performing any function of the Authority under this Act, have in place appropriate technical and organisational security measures for the information; and · (c) ensure that the agreements or arrangements entered into with such agencies, consultants, advisors or other persons, ·impose obligations equivalent to those imposed on the Authority under this Act, and require such agencies, consultants, advisors and other persons to act oply on instructions from the Authority. (5) Notwithstanding anything contained in any other law for the time being in force, and save as otherwise provided in this Act, the Authorit)'' or any of its officers or other employees or any agency that maintains the Central Identities Data Repository shall not, whether during his service or thereafter, reveal any information stored in the Central Identities Data Repository or authentication record to anyone:
38 SUPREME COURT REPORTS [2017) 7 S.C.R.
A Provided that an Aadhaar number holder may request the Authority to provide access to his identity information excluding his core biometric information in such manner as may be specified by regulations.
29. Restriction on sharing information.-(!) No core.biometric B inforrl1:ation, collected or created under this Act, shall be~ (a) shared with an)'one for any reason whatsoever; or (b) used for any purpose other than generation of Aadhaar numbers and authentication under this Act.
c (2) The identity information, other than core biometric information, collected or created under this Act may be shared only in accordance with the provisions of this Act and in such manner as may be specified by regulations. (3) No identity information available with a requesting <)ntity shall be- ( a) used for any purpose, other than that specifie4 to the· individual at the time of submitting any identity information for authentication; or (b) disclosed further, except with the prior consent of the individual to whoni such information relates. (4) No Aadhaar number or core biometric information collected or created under this Act in respect of an Aadhaar number holder shall be published, displayed or posted publicly, exc~pt for the purposes as may be specified by regulations.
F 30. Biometric information deemed to be sensitive personal information.-The biometric information collected and stored in electronic form, in accordance with this Act and regulations made 0
thereunder,. shall be deemed to be "electronic record" and "sensitive personal data or information'', and the provisions G contained in the Information Technology Act, 2000 (21 of 2000) and t~e rules made thereunder shall apply to sut;h information, in .addition to, and to the extent not in derogation of the provisions of this Act. Explanation.- For the purposes of this section, the expressions-- H
BINOY VISWAM v. UNION OF INDIA & ORS. 39 . [A. K. SIKRI, J.]
(a) "electronic form" shall have the same meaning as assigned A to it in clause (r) of sub-section (I) of section 2 of the Information Technology Act, 2000 (21 of2000); (b) "electronic record" shall have the same meaning as assigned to it in clause (t) of sub-section (I) of section 2 of the Informatipn Technology Act, 2000 (21 of2000); B · "sensitive personal data or information" shail have the same meaning as assigned to it in clause (iii) of the Explanation to section 43A of the Information Technology Act, 2000 (21 of2000)." That apart, Chapter VII which comprises Sections 34 to 47, mentions various offences and prescribes penalties therefor. c
1818. Even the Constitutional validity of the aforesaid Act is challenged in this Court in Writ Petition (C) No. 797 of2016, which has also been tagged along with Writ Petition (C) No. 494 of2012, the lead matter in the batch of matters which has been referred to the Constitution Bench. D
1919. At this juncture, by Finance Act, 2017, Income Tax Act is amended with introduction of Section l 39AA which provision has already been reproduced. It would be necessary to mention at this stage that since challenge to the very concept of Aadhaar i.e. unique identification number is predicated primarily on Right to Privacy, when instant writ petitions were initially listed before us, we suggested that these matters be also tagged along with Writ Petition (C) No. 494 of2012 and other matters which have been referred to the Constitution Bench. Pertinently, in the counter affidavit filed on behalf of the Union of India also, plea has been taken that the matters be tagged along with those pending writ petitions and be decided by a larger Bench. On this suggestion, reaction of the learned counsel for the petiti.oners was that petitioners would not be pitching their case on the 'Right to Privacy' and would be questioning the validity of Section 139 AA of the Act primarily on Articles 14 and 19 of the Constitution. On this basis, their submission was that this Bench should proceed to adjudicate the matter. Therefore, we make it clear at the outset that we are not touching upon the privacy issue while determining the question of validity of the impugned provision of the Act.
40 SUPREME COURT REPORTS [2017] 7 S.C.R.
A The Arguments · 20. Mr. Datar, learned senio~ counsel who ~pened the attack on behalf of the petitioners, started by stating the historical fact pertaining to introduction of Aadhaar Scheme, leading to the passing of Aadhaar Act and thereafter the impugned provision and referring to the various B orders passed bythis Court from time to time (which have already been reproduced above). After this narration, his first submission was that this Court had, time and again, emphasised by various interim orders that obtaining anAadhaar Card would be a voluntarily act on behalf of a citizen and it would not be made mandatory till the pendency of the petitions which stand referred to the Constitution Bench now. He further c submitted that even Sedion 3 oftheAadhaar Act spells out that enrollment of Aadhaar is voluntarily and consensual and not compulsory or by way of executive action. He also drew our attention to the proviso to Section 7 oflhe Aadhaar Act as per which a person is not 'to be deprived of subsidies as per the various schemes of the Governrn!lnt as the said proviso clearly mentions that if an Aadhaar Number is not assigned to an individual, he shall be offered alternate and viable means of identification for delivery of subsidy, benefit or service. According to him, there was a total reversal of the aforesaid approach for assessees under the Income Tax Act and those who wanted to apply for issuance of PAN Card inasmuch as not only it was made compulsory for.them to get Aadhaar enrollment number, but serious consequences were also provided for not adhering to this requirement. In their cases, PAN issued to these asses sees had to become invalid, that too from the retrospective effect i.e. from.the date when.it is issued. :Having regard to the aforesaid, the legal submission of. Mr. Datar . was thatc Section 139AA was · F unconstitutional and without legislative competence inasmuch as this:' provision was enacted contrary to the binding nature of the judgments/ directions of this Court which was categorical that Aadhaar had to remain voluntary. Questioning the legislative competence of the legislature to enact this particular law; argument of Mr. Datar was that there were certain implied limitations of such a legislative competence and one of G these limitations was that legislature was. debarred from enacting a law contrary to the binding nature of decisions of this Court. His submission in this behalf was that though it was within the competence of the legislature to remove the basis of the Supreme Court decision, at the same time, iegislature could not go against the decision which was la;v H
BINOY VISWAM v. UNION OF INDIA & ORS. 41 [A. K. SIKRT, J.]
of the land under Article 141 of the Constitution. He argued that, in the A instant case, legislature could not be construed as removing the basis of the various. orders of this Court relating to Aadhaar Scheme itself but the impugned provision was inserted in the statute book violating the binding nature of those orders.
2121. Dilating on the aforesaid submissions, Mr. Datar argued that the earlier orders of this Court dated August 23, 2015 of the main writ petition specifically permitted Aadhaar to be used only for LPG and PDS. By an order dated October 15, 2015, at the request of the Union oflndia, it was permitted to be extended to three other schemes, namely, MNREGA, Jan Dhan Yojana· etc. The Constitution Bench made it exp,licifly clear that the Aadhaar scheme could not be used for any other c purpose. According to him,.the Parliament did not in any manner remove the basis of these decisions .. The Aadhaar scheme, as enacted under the Aadhaar Act, continued to retain its voluntary character (as demonstrated by Section 3 of that Act) that existed when Aadhaar was operating under executive instructions. Nonetheless, even if it is argued that the above orders were passed when Aadhaar was based on executive instructions, decisions of this Court continue to be binding as they are made in exercise of the judicial power. According to Mr. Datar, any judgment ofa court, whether interim or final, whether rendered in the context ofa legislation, delegated legislation (rules/notifications) or even executive action will continue to be binding. In view of the judgment of this Court in Ram Jawaya Kapoor v. State ofPunjab3 , which held that executive and legislative powers are co-extensive under the Constitutional ·scheme, .unless the basis of the judgment is- removed by a subsequent enactment, it cannot be a.rgued that a decision based on executive instruction is less binding than other judgments/orders of the Supreme F Court, or that the judgment/order loses force ifthe executive instruction is replaced.by law. ·
2222. He also referred to thetlecision in the case of Madan Mohan Pati1ak v. Union of India 4, wherein the direction of the Calcutta High Court to pay bonus to Class-III.and Class-IV employees was sought to . G • be nullified by a statutbcy amendment. This was held to be impermiss!ble by the seven Judges'Bench. He also relied upon Bakhtawar Trust v. M.D. Narayan 5, wherein, after citing the case-laws on this point; the '(1955) 2 SCR 225 0 .. 4 AIR 1978 SC 803 '(2003) 5 sec 298 H
42 SUPREME COURT REPORTS [2011i 1 s.c.R.
A Court reiterated the principle as follows: ""25~ The decisions referred to above, manifestly show that it is open to the legislature to alter the law retrospectively, provided the alteration is made in such a manner that it would no more be possible for the Court to arrive at the same verdict. In other B words, the very premise of the earlier judgment should be uprooted, thereby resulting in a fundamental change of the circumstances upon which it was founded. xxx xxx xxx
27. Here, the question before us is, whether the impugned Act c has passed the test of constitutionality by serving to remove the very basis upon which the decision of the High Court in the writ petition was based. This question gives rise to further two questions - first. what was the basis of the earlier decision; and second. what. if any. may be said to be the removal of that basis? D · (emphasis supplied)" ·
2323. Based on the above principles, Mr. Datar's fervent plea was that: (i) The basis of the earlier 0rder of the Supreme Court is that Aadhaar will be made a voluntary scheme, it is a consensual E scheme, and that it is to be expressly limited to six specific purposes; and (ii) No attempt whatsoever has been made to remove the basis of these earlier orders. This alone renders Section l 39AA unconstitutional. F
2424. Arguing that basis of the orders of this Court was not removed, plea of Mr. Datar was that the basis of the said orders was that serious . constitutional concerns had been raised about the Aadhaar scheme, and that therefore, pending final decision on its validity by the Supreme Court, it ought to remain voluntary. Consequently, in order to remove the basis G of these orders, the Parliament would have to pass a law overturning the voluntar)' character of Aadhaar itself. Notably, a/though Parliament did have a chance to do so, it elected not to. The Aadhaar Act came into force on March 25, 2016. This was after the order of this Court. Significantly, however, the Parliament continued to maintain Aadhaar as · H
BINOY VISWAM v. UNION OF INDIA & ORS. 43 [A. K. SIKRI, J.]
a voluntary scheme vide Section 3 of the said Act Mr. Datar submitted A that if Parliament so desired, it could have removed the basis of this Court's order by: (i) Amending Section 3 so that Aadhaar is made compulsory for every resident oflndia; or (ii) Introducing either a proviso or adding a sub-section in Section B 3 to the following effect: "Notwithstanding anything contained in stib-section (1), the Central Government may notify specific purposes for which obtaining Aadhaar numbers may be made mandatory in public interest." C
2525. However, Parliament elected hot to do so as there is no non- obstante clause. Instead of making enrollment for Aadhaar itself mandatory, it' made Aadhaar mandatory for filing income-tax returns, even as enrollment itself remained voluntary under Section 3 of the Aadhaar Act. He, thus, submitted that far from.taking away the basis of the earlier Supreme Court orders. The Aadhaar Act strengthened and endorsed those orders, while Section 139AA impermissibly attempted to overturn them without taking away their basis. Indeed, Parliament did not even sof ar as include a non-obstante claus.e in Section 139AA, which would have made it dear that Section would override contrary laws - clearly indicating once again that Section 13AA waa not taking away the basis of the Court's orders. The emphasis of Mr. Datar is that unless suitable/appropriate amendments are made to the Aadhaar Act, the orders of the Court cannot be overruled by the newly inserted Section 139AA. F
2626. On the aforesaid edifice, the argument built and developed by Mr. Datar is that although the power of Parliament to pass laws with respect to List-I and List-III is plenary, it is subject to two implied limitations: (i) Parliament or any State legislature cannot pass any law that G overrules a judgment; before any law is passed which may result in nullifying a decision, it is mandatory to remove the basis of the decision. Once the basis on which the earlier decision/order/judgment is delivered is removed, Parliament can then pass a law prospectively or retrospectively and with H
44 SUPREME COURT REl;'ORTS [2017] 7 S.C.R.
A or without a validation clause. (ii) Implied limitation not to pass contrary laws: The doctrine of harmonious construction applies when there is an accidental collision or conflict between two enactments and the Supreme Court has repeatedly read down one provision to give effect to B other. Thus, both the provisions have to be given effect to. But ifthe collision or conflict is such that one provision cannot co-exist with another, then the latter provision must be struck down. In the present case, obtaining an Aadhaar number · continues to be voluntary and explii;;itly declared to be so. Once the Aadhaar Card is voluntary, it cannot be made mandatory c by the ·impugned Section 139AA of the Act. As long as the Aadhaar enactment holds the field, there is an implied limitation on the power of Parliament not to pass a contrary law.
2727. He also advanced two examples of such an implied limitation:
D (i) If Parliament, by a statute, makes medical service in rural areas an attractive option for doctors with incentives like preference for post-graduate admissions, higher pay/allowances, or even lower tax, such a scheme is voluntary and only those doctors who want those benefits may opt for it. While suc,h a statute exists, it will not be permissible for Parliament to simultaneously E amend the Medical C~uncil Act, 1956 and state that absence of rural service will be a ground to invalidate the doctor's certific;ate of practice. Thus, what is statutorily voluntary under one Parliamentary Act cannot be made statutorily compulsory under another Parliamentary Act at the-same time. F (ii) Second example given by Mr. Datar was that making Aadhaar compulsory only for individuals with severe consequences of cancellation of PAN cards and a deeming provision that they had never applied for PAN is discriminatory when such a provision is not made mandatory for other assessees. G 28:Mr. Datar's next plea of violation of Article 14 was based by him on the application of the twin-test of classification viz. there should be a reasonable classification and that this classification should have rational nexus with the objective sought to be achieved as held in R.K. Dalmia v. Justice S.R. Tendolkar6. Mr. Datar conceded that first test 6 (1959)_SCR 279 H
BINOY VISWAM v. UNION OF INDIA & ORS .. 45 [A. K. SJKRI, J.] .
was met as individual assessees form a separate class and, to this extent, there is a rational differentiation between individuals and other categories ofassessees ..·The main brunt of his argument was on th.e second limb of the twin~test of classification which according to him is not satisfied because there is no rational nexus with the object sought to be achieved.
2929. Thifd argument of Mr. Datar was that the affected persons by Section 139AA are individuals who are professionals like lawyers, doctors, architects etc: and lakhs of businessmen having small or micro .. enterprises. By imposing a draconian penalty of cancelling their PAN cards and deeming that they had nev~r applied for them, there is a direct infringement to Article 19(1 )(g). The consequences of not having a PAN card results iri a virtual "civil death" and it will be impossible to carry out ariy business or professional activity under Rule l I 4B of the Income Tax Rules, 1962 (hereinafter referred to as the 'Rules'), it will not. be possible to operate bank accounts with transactions above Rs.50,0001-, use creUit/debit'cards, purchase motor-vehicles, purchase property etc. D
3030. Elaborating this point, it was submitted by him that once it is shown that the right under Article I, 9( I )(g) has been infringed, the burden shifts to the State to show that the restriction is reasonable, and in the interests of the public, under Article 19(6) of the Constitution. He referred to Modern Dental College and Research Centre & Ors. v. State of E Madhya Prades/i 7, wherein this Court held that the correct test to apply " 'in the context of Article 19(6) was the test of proportionality: " ... a limitation of a.constitutional right will be constitutionally permissible if: (i) it is designated for a proper purpose; (ii) the measures undertaken to effectuate such a limitation are rationally connected to the fulfilment of that purpose; (iii) the measures undertaken are necessary in that there are no alternative measures that may similarly achieve that same purpose with a lesser degree of limitation; and finally (iv) there needs to be a proper relation ('proportionality strict sensu' or 'balancing') between the importance of achieving the proper purpose and the social importance of preventing the limitation on the constitutional right." 3 i. Mr. Datar also submitted that even if the State succeeds in showing a proper purpose and a rational connection with the purpose, 1 (2016) 1 sec 353 H
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