Supreme Court Upholds Aadhaar Act While Balancing Privacy and Welfare

Background and Legislative Context

The case of JUSTICE K.S. Puttaswamy (Retd.) v. Union of India arose from challenges to the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. Petitioners argued that Aadhaar's mandatory enrolment for welfare benefits under Section 7 infringed upon the fundamental right to privacy as recognized in the landmark Puttaswamy judgment (2017). Concerns were raised about the creation of a surveillance state, misuse of biometric data, and exclusion of beneficiaries.

The Act was also challenged procedurally, with petitioners asserting that its passage as a Money Bill under Article 110 circumvented scrutiny by the Rajya Sabha, undermining bicameralism. The Supreme Court was tasked with balancing concerns over privacy, autonomy, and dignity against the legitimate state aim of ensuring targeted delivery of welfare benefits.

Key Legal Questions Addressed

• Does Aadhaar violate the fundamental right to privacy? The court applied the three-fold test from Puttaswamy (2017): legality, legitimate aim, and proportionality.

• Is Aadhaar's mandatory enrolment under Section 7 constitutional? Petitioners argued that it effectively made Aadhaar compulsory for accessing welfare benefits, violating autonomy.

• Does the Act's passage as a Money Bill under Article 110 meet constitutional requirements? The court examined whether the Act's provisions, particularly Section 7, justified its classification as a Money Bill.

• Does Aadhaar's architecture lead to a surveillance state? Concerns about data misuse, storage, and tracking were central to this issue.

Privacy and Proportionality: The Court's Analysis

The majority held that Aadhaar passed the three-fold test for privacy under Puttaswamy (2017). The Aadhaar Act was deemed to have a legitimate state aim: ensuring targeted delivery of subsidies, benefits, and services funded by the Consolidated Fund of India. The court emphasized that minimal biometric data—iris scans, fingerprints, and photographs—was collected, and that the system was designed to be purpose-blind, prohibiting the merging of data silos.

On proportionality, the court noted that Aadhaar's architecture restricted data sharing and storage. For instance, Section 29 prohibits the sharing of core biometric data, and Section 32(3) bars the collection of authentication purposes. The court found these safeguards adequate to prevent misuse. However, Section 57, which allowed private entities to use Aadhaar for authentication under contracts, was read down as unconstitutional due to its potential for commercial exploitation of biometric data.

Mandatory Enrolment and Exclusion Concerns

While enrolment under Aadhaar is voluntary, Section 7 effectively makes it compulsory for individuals seeking welfare benefits. The court acknowledged that this creates a tension between autonomy and access to welfare. However, it ruled that exclusion due to authentication failures did not render Section 7 unconstitutional, citing the 99.76% accuracy of biometric authentication and the larger purpose of inclusion.

The judgment clarified that denial of benefits due to authentication failures must be addressed administratively rather than invalidating the Act. For children, the court held that Aadhaar enrolment cannot be mandatory for school admissions under Article 21A, and alternative forms of identification must be accepted for welfare schemes.

Procedural and Evidentiary Rulings

The court upheld the constitutionality of Section 33, which allows disclosure of Aadhaar data in the interest of national security, subject to approval by an officer higher than Joint Secretary and preferably a Judicial Officer. It struck down provisions permitting disclosure without adequate safeguards.

The court also recommended amendments to Section 47, which currently limits the initiation of complaints to the UIDAI or its authorized officers. It suggested allowing individuals whose rights are violated to file complaints directly, enhancing accountability.

Implications for Advocates and Open Questions

For practitioners, the judgment underscores the need to scrutinize the proportionality of state measures affecting privacy. Advocates handling exclusion cases must focus on administrative remedies rather than constitutional challenges to Section 7.

Open questions remain regarding the efficacy of safeguards against data misuse, particularly in light of the court's decision to read down Section 57. The judgment also leaves unresolved the broader issue of whether Aadhaar's architecture sufficiently prevents the risks of surveillance, despite its purpose-blind design.

Source judgment: Read the full judgment · Bench: Dipak Misra, R D Y Chandrachud, Ashok Bhushan