Guest Post: The Legality of Aadhaar Seeding for Social Security Purposes

October 28, 2021 Gautam Bhatia7 Comments

[This is a guest post by Yajat Kumar.]

A Circular (“The June Circular”) issued by the Employees Provident Fund Organisation (“EPFO”) dated 1^st June, 2021 mandated the seeding of Aadhaar with the Universal Account Number (“UAN”) which is generated under The Employees Provident Fund and Miscellaneous Provisions Act, 1952 (“The EPF Act”). Whenever contributions, under the EPF Act are made in respect of the employees an Electronic Challan-Cum-Receipt (“ECR”) is generated which serves as a proof of deposit of the Provident Fund in their accounts. If the said ECR is not generated, then the employers have to suffer the consequences of non-deposit of dues in the form of damages. So, the onus, directly or indirectly, is upon the employer to make sure their employees’ UAN is seeded with Aadhaar and to further file the ECR for the UAN. The June Circular was issued in pursuance to a notification by the EPFO dated 30^th April, 2021 which put into force section 142 of the Code on Social Security,2020 (“The Code”). While the four Labour Codes are unlikely to be implemented before the next fiscal year, the reasons cited by the EPFO in implementing the section in an isolated manner were “to collect Aadhaar details for the database of beneficiaries under various social security schemes” and the “creation of social security fund for providing comprehensive social security to the unorganized sector.”

The June Circular, however, read along with section 142 of the Code, in using the term “mandatory” for seeding Aadhaar with UAN seems to go contra tothe judgement of K.S. Puttaswamy (Retd) & Anr. v. Union of India & Ors (“Aadhaar 5J”). To this end, I shall be probing the following two questions in this piece- 1) Whether Section 142 can be implemented independent of the Code, and can it inter alia form the basis of seeding of the UAN with Aadhaar? And, 2) Whether the June Circular issued by the EPFO (read along with section 142) is constitutionally valid with respect to the Aadhaar 5J judgement?.

Maintainability of Independent Application of Section 142 of CoSS, 2020

Section 142 of the Code reads as follows-

“142. (1) An employee or unorganised worker or any other person, as the case may be, for— (a) registration as member or beneficiary; or
(b) seeking benefit whether in kind, cash or medical sickness benefit or pension, gratuity or maternity benefit or any other benefit or for withdrawal of fund; or
(c) availing services of career centre; or
(d) receiving any payment or medical attendance as Insured Person himself or for his dependants,
under this Code or rules, regulations or schemes made or framed thereunder, shall establish his identity or, as the case may be, the identity of his family members or dependants through Aadhaar number and for such purpose the expression “Aadhaar” shall have the meaning as defined in clause (a) of section 2 of the Aadhaar (The Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016:
Provided that any foreigner employee shall obtain and submit Aadhaar number for establishing his identity, as soon as possible, on becoming resident within the meaning of clause (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
(2) For the purposes of sub-section (1), the Aadhaar number issued to an individual shall be in accordance with the provisions of section 3 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.”

At the very outset, a plain reading of the proviso (d) of the subsection 1 of the section, “under this Code or rules, regulations or schemes made or framed thereunder” makes it clear that the section seeks to make Aadhaar imperative to establish the identity of the concerned member and the identity of his/her family members or dependents. This is only possible, under the proviso’s pursuance, once the Code is made applicable on the whole. Also, on applying the Literal Rule of Interpretation, it is pretty much self-explanatory that the term “Under this Code” envisages the provisions of the section to operate only when the Code has been implemented and not independent of it since the section’s very existence depends upon the applicability of the Code.

Secondly, a Gazette notification dated 3^rd May, 2021 enumerates that the section has been made effective in pursuance to the provisions under sub-section 3 of section 1 of the Code read along with section 14 of The General Clauses Act, 1897 (“The GCA”). Section 1(3) of the Code provides for bringing into effect different provisions of the Code on different dates while being facilitated, with respect to Section 142, by section 14 of The GCA which, in turn, provides that if a power is conferred by a Central act or regulation, then that power can be exercised from time to time, unless there is a different intention on the part of the legislature. While this provision does seem to offer a plausible explanation for the above lacuna, but the Supreme Court (SC) in the case of Sri Nasiruddin vs State Transport Appellate Tribunal has held that section 14 of The GCA cannot have any application if a different intention, other than the one currently assumed, appears in any other part of the statute. Here, as discussed above, clause (d) of sub-section one envisages the seeding of Aadhaar to be done “under the code or rules, regulations or schemes made or framed thereunder” and not as an excluded provision which would, inextricably, have an application without other interlinked provisions such as section 113 of the Code (in this section, the term “Aadhaar” for the purpose of registration of unorganized, gig or platform workers is derived from section 142 only). This, clearly, does not appear to be the intention of the legislature.

Further, on a simple reading of Section 142, no responsibility is fixed upon the employer to seed the Aadhaar with UAN but rather upon the employees/ beneficiaries for taking benefits under the provisions of the Code, and not under the provisions of the EPF Act. Ergo, while issuing the June Circular, the EPFO has completely misread Section 142 of the Code.

If section 142 is allowed to be constructed vis-à-vis the convoluted language of the aforementioned circular, it would absolutely deflect the purpose of the code. This discrepancy not only makes this section obsolete, but also in contravention to the very objective of “extending social security to all employees and workers either in the organised or unorganised sector”. Cues, in this case regard, can be taking from the writings of Maxwell who has talked in length about the consonance between the object and the law- “When a law is non-sequitur to its intent, it is liable to be struck down” (Maxwell on Interpretation of Statutes, 11^th Edn, p. 221). One can also find a similar obiter in A. Ram Mohan vs State of Madras, “When the language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself”(para 22). Hence, if the section has to be implemented it can only come into force with the Code (much less the rules) and cannot exist in vacuum.

Checking the conduciveness of Mandatory Seeding against the tests laid down under the Aadhar 5J judgement

As argued above, the interim enforcement of section 142 sans the Code would not be maintainable in the court of law, but even if- for argument’s sake the above legal caisson is set aside, there still exists the bigger question of constitutionality of the section (read along with the June Circular) under the Aadhaar 5J judgement. Now, I will look into the validity of mandatory Aadhar seeding with respect to Employees Provident Fund and Pension Scheme. Even though the same UAN number would be used to access both of the aforementioned schemes, but it is necessary to look at both of them through a differential perspective in accordance with the tests laid down under The Aadhaar 5J Judgement.

First Point of Contention

The contours surrounding the applicability of linking of Aadhaar with EPF has seen a sea-change over the years. Initially, in K.S Puttaswamy & Anr. v. UOI & Ors, (2015), The SC had observed that “The Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this court one way or the other.” In pursuance of this, major modifications were made by the court in Aadhaar 5J. It observed-

“No doubt, the government cannot take umbrage under the aforesaid provision to enlarge the scope of subsidies, services and benefits. ‘Benefits’ should be such which are in the nature of welfare schemes for which resources are to be drawn from the Consolidated Fund of India…
We also make it clear that a benefit which is earned by an individual (for example, pension by a government employee) cannot be covered under Section 7 of the Act, as it is the right of the individual to receive such benefit” (paras 321-322)

Now, Section 7 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (“The Aadhaar Act”) provides that individuals should produce their Aadhaar card or Aadhaar enrollment number for the purpose of accessing social services, subsidies, benefits etc., the funds of which are drawn from the Consolidated Fund of India. Here, the court examined and clarified the ambit of the term ‘benefits’, along with ‘services’ under section 7 of the Aadhaar Act. It observed that the term ‘Service’ which, ordinarily includes provisions and facilities provided to an individual, should not be constructed in such a manner that a person is denied a benefit on non- production of the Aadhaar which he/she is otherwise entitled to (see para 322). So, ‘Benefits’ should include any, or all social welfare schemes whose funds are extracted from the Consolidated Fund of India (this being read ejusdem generis with ‘subsidies’).

Section 6 of The EPF Act says that the contributions payable by the employee is 12 per cent of basic wages (which is inclusive of dearness and retaining allowances). An equal contribution is remitted by the employer as well. It is essential to note that the expenditure paid thereof is not, in any way, taken from the Consolidated Fund of India or any other governmental purse and is a benefit which is rightfully earned by the employer himself. Likewise, the benefits provided under sub-clauses 1(b) and 1(c) of Section 142 such as pension, gratuity, maternity leave; and any payment or medical attendance for an insured individual or his dependents- are also not covered under the expenses withdrawn/retrieved under The Consolidated Fund. Hence, the June Circular read with section 142 of the Code for these purposes has flouted the court’s guideline concerning the implementation of the Aadhar Scheme and is squarely violative of not only the principles of natural justice, but also of articles 14, 19(1)(g), 21 and 300A of the Indian Constitution.

It is also pertinent to note that under The Atmanirbhar Bharat Rojgar Yojana (“ABRY”), the Central Government will pay the PF share of employer and employees who lost their jobs due to Covid-19 and were called back to small scale jobs in the formal sector (registered under EPFO) till 2022. While this is a commendable step, it will again, seamlessly require mandatory Aadhaar-UAN linkage. Reference here can be taken under the case of Binoy Viswam vs Union of India and Ors, where the court had to deal with a similar issue of mandatory seeding of Aadhaar with PAN number under section 139AA of the Income Tax Act,1961 for filing income tax returns. While holding up the validity of the same, it observed that since all income tax assesses constitute one class only so they are to be treated alike. The ratio of this case, however, will not be applicable here because the fact remains that a separate nexus cannot be created by the government only for some individuals under a ‘temporary’ scheme while excluding others not eligible under the aforesaid. There cannot be any differential treatment solely on the basis of extending ‘benefits’ to a class of people who will be seeding Aadhaar with their UAN solely because they are a part of a scheme which is due to tentatively expire next year. Article 14 of Indian Constitution forbids class legislation, but does not prohibit reasonable classification for the purpose of legislation. Government cannot create ‘a class-within-a class’ under the garb of denying benefits to the deserving working class. Hence, the government cannot impose Aadhaar on the beneficiaries of ABRY under the ‘consolidated fund’ argument.

Second Point of Contention

The pension which an employee receives under The Employee’s Pension Scheme, 1995 is mostly made up of contributions by the employer and the employee, but some portion (1.16 percent) is also remitted by the central government. While the amount is surely derived from the Consolidated Fund of India and falls in consonance with this line of reasoning (as contained in the judgement), Aadhaar 5J also talks about a much bigger purpose of “plugging the leakages and ensure that fruits of welfare schemes reach the targeted population, for whom such schemes are actually meant” and also highlights that the “Government seems to be sincere in its efforts to ensure that no such exclusion takes place and in those cases where an individual who is rightfully entitled to benefits under the scheme is not denied such a benefit merely because of failure of authentication.”(see para 318)

This was opined because, after all, such laws are social security measures- made primarily for the benefit of workmen. With that said, a huge chunk of workers in our country do not even have an Aadhaar Card because of which many employers are being pressured to not employ them – and this does not even consider the number of migrant workers who are unable to arrange proper documents for the purpose of seeding, or the mismatch between the Aadhaar data and UAN data of the employees which leads to mechanical rejection by the Unique Identification Authority of India’s(“UIDAI”) software (which does not even generate OTP most of the time!). This may deprive the employees from availing benefits under schemes such as ARBY and insurance linked-aid under Employees’ Deposit-Linked Insurance Scheme, 1976 (EDLI).

Consequently, when the EPF contributions of such members are deposited late, the employer will be penalized for late payment of contribution, and interest and damages will be levied. Since EPF contribution is not paid in time for such members, employer cannot get necessary tax benefit because of late payment. Imposing arbitrary deadlines and the stringency on part of the EPFO to not create any other means of depositing the dues except the UIDAI portal is, only for the sake of contributing a minute token-sized percentage (1.16%) of contribution in the pension fund, is unwarranted (especially when there not fault on part of both- the employer and the employee). It is therefore, in pursuance to the spirit of Aadhaar 5J, it is imperative on the part of the EPFO to create alternate arrangements for vitiating the hardships faced by the vulnerable workforce during these trying times.

Conclusion

The Delhi High Court(HC) in the case of Association of Industries and Institutions v Union of India has granted extension with regard to the employees whose seeding exercise is yet to begin till 30^th November, 2021 and has directed that no coercive action is to be taken against the employees with respect to employment and benefits under ABRY and against the employers with respect to sections 14B(damages) and 7Q(interest) under The EPF Act. The Delhi HC is yet to decide the validity of the June circular against the Aadhar 5J judgement. Whatever be the final judgement of the court, it is surely set to alter the contours of UIDAI verification and social security jurisprudence of India.

Money Bills and Judicial Review: Lessons from a Constitutional Crisis in 1911 [Guest Post]

November 21, 2020November 21, 2020 Gautam Bhatia1 Comment

[This is a guest post by Rahul Narayan.]

A little over a century ago, Britain was headed for a Constitutional crisis due to severe differences between the Conservative party dominated, more-or less hereditary House of Lords and the elected Liberal Party dominated House of Commons. Matters came to a head in 1909 when the Lords rejected the Finance Act passed by the Commons leading to a resignation of the government, and political turmoil and elections. By 1911 a newly minted Liberal party majority in the Commons wished to remove the power of the Lords to reject Money Bills and derail other reform legislation. Thus began discussions on what became the Parliament Act 1911.

In many ways this was a continuation of a historical process. The right to originate bills of “aid and supply” had traditionally rested with the Commons since the Magna Charta. In 1671 and 1678 the Commons had passed resolutions denying the Lords the right to amend finance bills. This was accepted by the Lords, who only insisted that no unrelated matter be “tacked” on to the bills of supply to avoid scrutiny of the Lords on such unrelated questions because such tacking would be “unparliamentary” and would tend to “the destruction of Constitutional Government”. This sentiment was accepted by Commons in 1702. Bills of aid and supply were passed as consolidated Finance Acts after the 1860s to discourage the Lords from rejecting individual components of finance bills as it was believed the Lords would hesitate in striking the entire Finance Act. The skirmishes between the Lords and Commons from 1906 to 1909 which culminated in the rejection of the Finance Act 1909 only precipitated the end of the last remaining power of the Lords re money bills- the right to reject them.

In 1910, the Lords, stuck between the Scylla of money bill reform and the Charybdis of wholescale restructuring of the Lords to remove their hereditary privileges bowed to the inevitable and agreed not to press their Constitutional privilege to reject money bills asking in return only that the ancient malpractice of “tacking” be dealt with appropriately.

The quickly agreed contours of the discussion as regards money bills were: (a) The Commons had the sole privilege to pass or reject money bills; (b) No extraneous matter would be tacked on to a money bill to avoid scrutiny of the Lords.

In England, each House is the judge of its own privileges. Thus the Commons majority rejected the suggestions made by the Conservative opposition and by the Lords that either the courts or a Joint Committee decide when a bill was a money bill. The decision was that of the Speaker alone. Eventually it was decided that the Speaker would certify the bill as a money bill if practicable after consultation with 2 members of the House of Commons, one from each side of the House.

Extensive and learned debate was carried out in the Commons between PM Asquith, Samuel and Churchill (then a liberal) on the Government side and Balfour, Anson and others for the Conservative opposition on whether the actual definition of a Money Bill conformed to the contours everyone agreed upon. Speaker after speaker expressed the fear that the broad based definition of money bills could result in extraneous matters being tagged by the Speaker as a money bill to remove scrutiny of the House of Lords on important questions. The government tried to dispel these fears in two ways. Firstly, they argued that section 1 of the Bill only formalised the existing legal position on Money Bills alone. Secondly, they said that the word “only” in draft signified that nothing extraneous could be tacked on to a money bill. On 11^th April 1911 PM Asquith stated that a law appointing 2 new high court judges would not be a money bill despite the fact that it would involve expenditure from the consolidated fund because “No human being could say that was a Bill which contained only provisions dealing with charges on the Consolidated Fund. It was for the appointment of two judges, and incidentally their salaries were a charge on the Consolidated Fund. That is a good illustration of the way in which these words will have to be construed.”

Following serious debate, the Parliament Act, 1911 was passed in August 1911 and the incipient Constitutional crisis was averted. The Parliament Act 1911 was amended in 1949. Its use by the Labour Government to pass the Hunting Act 2004 over the protest of the Lords led to a huge brouhaha and a landmark case in the House of Lords, though not on the aspect of money bills. In the House of Commons with its strong tradition of an impartial Speaker (recently demonstrated during the Brexit debates by Speaker Bercow), there has never been a partisan food fight on the certification of a Money Bill and no accusation of “tacking”.

Money Bills were adopted into the Constitution of Ireland, 1937 with a little modification- as per Article 22 thereof, the certificate of the Speaker could be disputed by the upper house and the President could set up a committee headed by a High Court judge to determine the issue.

In our Constituent Assembly, the Framers used the Constitution of Eire as a basis for the money bill clause but removed the idea of a joint committee instead giving finality to the decision of the Speaker. An amendment to remove the word “only” was negatived on 8^th June 1949 when the draft Article was approved.

What lessons can our Courts draw from the resolution of the crisis of 1911 when they examine the provisions relating to Money Bills under our Constitution in Article 110? On the issue of judicial review of the certification by the Speaker, the Courts must be conscious of the difference between the English position and ours while on the interpretation of the word “only” in Article 110(1), they must be conscious of the similarity.

Under our Constitution, judicial review of the certification of a Money Bill by the Courts ought to be permissible because:

In Indian law, judicial review has to be specifically excluded and mere finality is not enough. Judicial review is specifically excluded in the Parliament Act, 1911, unlike in Article 110.
In India, the privileges of each house are subject to the provisions of Constitution as interpreted by the Courts, unlike in England.
There is no absolute or unfettered power under the Indian Constitution.
Certification by the Speaker is not “procedural” but is a substantive determination and a mistake is not irregularity of procedure but an illegality, and there is no bar on judicial review of an illegality.

Like in Britain, under our Constitution, the definition of a Money Bill is to be strictly construed because:

The word “only” indicates that bills have to deal only with the provided heads and extraneous matter cannot be tacked on.
Money Bills are the exception to the rule of bicameral legislative action and ought not to be allowed to subsume the main rule. The Rajya Sabha is emphatically not a hereditary chamber like the Lords in 1911 and the Rajya Sabha has a vital role to play.
Traditionally our Constitutional courts have not looked upon kindly at disguising the form of legislation to hide the substance- what is sometimes referred to as a “fraud on the Constitution”.

The Aadhaar Act, inter-alia deals with eligibility for subsidies which are expenditures from the Consolidated Fund but neither creates subsidies nor directs such expenditures. Even otherwise no one would say this is a law only for this purpose. The majority judgment in the Aadhaar case, upheld the passing of the law as a money bill on the basis that the dominant purpose was subsidies, a characterisation disputed persuasively in fact and in law by Justice Chandrachud’s dissent. In Rojer Mathews case, when the Court was dealing with the amendment to the composition and rules governing Tribunal made vide the Finance Act, 2017, doubted the Aadhar judgment as regards money bills referred the issue to a larger bench both on the interpretation of the word “only” and on judicial review.

Based on his speech on April 11, 1911, PM Asquith would not think the Aadhaar Act is a Money Bill and would think that the merging of tribunals was tacked on to the Finance Act 2017 in a way that the Lords could describe as unparliamentary and what John Hatsell writing in 1785 would call “dangerous” and “unconstitutional”. As and when the Supreme Court considers the Aadhaar Review Petitions and the reference in Rojer Mathews, they should hold the same.

The Tribunals Judgment – I: A Course Correction on the Money Bill

November 14, 2019November 14, 2019 Gautam Bhatia4 Comments

[Editorial Note: Justice is an indivisible concept. We cannot, therefore, discuss contemporary Supreme Court judgments without also acknowledging the Court’s failure – at an institutional level – to do justice in the case involving sexual harassment allegations against the Chief Justice. This editorial caveat will remain in place for all future posts on this blog dealing with the Supreme Court, until there is a material change in circumstances.]

Yesterday, a Constitution Bench of the Supreme Court delivered an important judgment concerning the constitutional validity of the Finance Act of 2017. Briefly, through the Finance Act, Parliament had merged a number of Tribunals, and delegated to the government the task of framing rules for their functioning. The Finance Act had been passed as a money bill, which barred the Rajya Sabha from amending it. There were, therefore, three issues before the Court: (i) whether the Speaker of the Lok Sabha had correctly certified the Finance Act as a money bill; (ii) whether Section 184 of the Finance Act – the delegation provision – was constitutional, and if it was, whether the rules the government had framed for the Tribunals were constitutional; and (iii) miscellaneous issues around the functioning of Tribunals in the country. The last issue – strictly – is one of legal policy, and I will not discuss it here. This post will discuss the debate around the money bill, and the next post will discuss Section 184.

The debate around the money bill was framed in the background of the Supreme Court’s Aadhaar Judgment, of September 26, 2018. Recall that in the Aadhaar Case, the Speaker’s certification of the Aadhaar Act as a money bill was under challenge. There were a number of issues that the Court had to consider: first, whether the Speaker’s decision was subject to judicial review; secondly, if it was, how was the Court to interpret Article 110 of the Constitution, that set out the conditions for what constitutes a money bill?; and thirdly, was the Aadhaar Act correctly certified as a money bill?

As Suhrith Parthasarathy pointed out repeatedly in the aftermath of the Aadhaar Judgment, the majority decision returned a confused set of findings on this issue. The primary reason for this was that it mixed up the order of the questions. Instead of first deciding whether the Speaker’s certification was subject to judicial review, it went ahead and reviewed the law anyway – thus implying that it was – but later, went on to say that it wasn’t answering the question of review. On the substantive issue, it first struck down a provision of the Aadhaar Act (Section 57) that clearly couldn’t be traced back to Article 110 – and then held that the rest of the Act passed scrutiny as a money bill. The consequence of this was that it failed to provide clear standards for how the Court should interpret Article 110.

Importantly, the majority judgment in The Tribunals Case – authored by the Chief Justice – points this out clearly and unambiguously. In paragraph 122 it notes that:

Upon an extensive examination of the matter, we notice that the majority in K.S. Puttaswamy (Aadhaar-5) pronounced the nature of the impugned enactment without first delineating the scope of Article 110(1) and principles for interpretation or the repercussions of such process. It is clear to us that the majority dictum in K.S. Puttaswamy (Aadhaar-5) did not substantially discuss the effect of the word ‘only’ in Article 110(1) and offers little guidance on the repercussions of a finding when some of the provisions of an enactment passed as a “Money Bill” do not conform to Article 110(1)(a) to (g). Its interpretation of the provisions of the Aadhaar Act was arguably liberal and the Court’s satisfaction of the said provisions being incidental to Article 110(1)(a) to (f), it has been argued is not convincingly reasoned, as might not be in accord with the bicameral Parliamentary system envisaged under our constitutional scheme. Without expressing a firm and final opinion, it has to be observed that the analysis in K.S. Puttaswamy (Aadhaar-5) makes its application difficult to the present case and raises a potential conflict between the judgements of coordinate Benches.

Having taken this view, the Chief Justice then correctly refers the question to a larger bench for resolution. In doing so, however, he also makes it clear that on the point of judicial review, the law is now settled. By examining the Aadhaar Act on merits, it was a necessary implication that the question of the Speaker’s certification is subject to judicial review (and this in line with previous judgments, such as Raja Ram Pal); and contrary judgments, such as Siddiqui, now stand expressly overruled. The consequence, then, is this: the speaker’s certification of money bills is now subject to judicial review. The standards that a Court must apply – balancing respect for the Speaker’s prerogative against the importance of bicameralism and the Upper House – will be decided by a larger bench.

In this context, Chandrachud J.’s concurring opinion repays careful study. Recall that Chandrachud J. had dissented in the Aadhaar Case, including on the point of money bill. Here, he takes the argument further. After setting out the history and origins of money bills in British parliamentary practice, and noting that as a matter of constitutional text and structure, the “finality” of the Speaker’s decision doesn’t necessarily exclude judicial review, Chandrachud J. comes to the heart of the case: the issue of bicameralism. Put very simply, “bicameralism” refers to the existence of two legislative chambers, where – depending upon the circumstances – the participation and/or concurrence of both chambers is required to pass laws. In the Indian context, “bicameralism” is a specific, structural check upon majoritarianism, as well as a guarantee of states’ representation in the federal scheme. The Rajya Sabha exists both to articulate the interests of the states in Parliament, as well as act as a check upon the Lok Sabha. Thus, as Chandrachud J. notes:

The Rajya Sabha reflects the pluralism of the nation and ensures a balance of power. It is an indispensable constitutive unit of the federal backbone of the Constitution. Potential differences between the two houses of the Parliament cannot be resolved by simply ignoring the Rajya Sabha. In a federal polity such as ours, the efficacy of a constitutional body created to subserve the purpose of a deliberate dialogue, cannot be defeated by immunising from judicial review the decision of the Speaker to certify a Bill as a Money Bill. (paragraph 65)

What Chandrachud J. is doing here is what the legendary American constitutional scholar, Charles Black, called “structural interpretation“: constitutional interpretation that flows from the structures and relationships between various constitutional provisions. Here, Chandrachud J. uses the importance of bicameralism as providing the interpretive framework within which to examine the issue of the money bill; or, in other words, any interpretation of Article 110 must be one that advances and protects bicameralism, rather than diluting or eroding it.

This interpretive framework comes into play when Chandrachud J. examines the merits of the dispute. He notes that the inclusion of a non-fiscal provision matter in a money bill is permissible only if it is “incidental” to a matter specified in Article 110. Or, in other words, the legislation must essentially relate to one of the clauses under Article 110. The Finance Act – to the extent that it dealt with the restructuring and composition of Tribunals – clearly did not fall within this category. Therefore:

We are unimpressed with the submissions of the learned Attorney General that since salaries are payable out of the Consolidated Fund, Part XIV of the Finance Act bears a nexus with sub-clauses (c) and (d) of Article 110(1) and that the other provisions are merely incidental. That the amendment has a bearing on the financial burden on the Consolidated Fund of India cannot be the sole basis of brining the amendment within the purview of Article 110(1). On a close analysis of the provisions, it is evident that what is claimed to be incidental has swallowed up the entire legislative exercise. The provisions of Part XIV of the Finance Act 2017 canvass a range of amendments which include qualifications and process for appointment terms of office and terms and conditions of service including salaries, allowances, resignation and removal which cannot be reduced to only a question of the financial burden on the Consolidated Fund of India. The effect of Part XIV is to amend and supersede the provisions contained in the parent enactments governing all aspects of the appointment and terms of service of the adjudicatory personnel of the tribunals specified in the Eighth and Ninth Schedules. This exercise cannot be construed as a legitimate recourse to the power of enacting a Money Bill. (paragraph 77)

It is crucial to note that this analysis on merits flows from the structural analysis discussed above. In paragraph 86, Chandrachud J. goes on to observe:

… the certification of a Bill as a Money Bill and the invocation of the provisions of Article 110 is an exception which has been carved out by the Constitution to the constitutional requirements accompanying the passage of ordinary legislation. In passing the Bill as a Money Bill, the immediate impact is to denude the Rajya Sabha of the legislative role which is assigned to it in the passage of legislation.

On this basis, he finds that the Speaker’s certification was incorrect, and sets it aside; the rest of the Act, however, is saved on principle of severability.

It is important to note that this is not the first occasion in recent times that structural analysis has played a role in the Court’s judgments. It was also in play in the NCT of Delhi v Union of India decision. In that case, while interpreting Article 239AA of the Constitution – that defined the relationship between Delhi and the Union of India – the Supreme Court held that principles of federalism and representative democracy constituted the interpretive framework within which textual ambiguities were to be resolved. The principle is a simple one, but has powerful consequences: when used well, it ensures that the Constitution’s fundamental principles act as waymarkers upon the often perilous road of judicial interpretation; these principles help to anchor the Court within a principled adjudicatory framework.

In that sense, Chandrachud J.’s opinion has already done the work that the majority has left to a larger bench.

And incidentally, it also makes it clear that the Aadhaar Act is unconstitutional.

Revisiting the Aadhaar Judgment

November 11, 2019 Gautam Bhatia2 Comments

It has been more than a year since the Supreme Court’s judgment in K.S. Puttaswamy v Union of India (II) [“the Aadhaar Judgment”], which was delivered on September 26, 2019. The intervening period has seen some legislative developments – for example, resurrecting the use of the Aadhaar database by private parties, which had been struck down by the Court. It has seen the promise of fresh laws (such as the Data Protection Act, which – it is rumoured – will be placed before Parliament in the winter session). It has also seen the proposed extension of the Aadhaar programme (for example, mandatory linking of voter IDs), as well as other legislative proposals involving the collection and use of personal data (facial recognition systems, DNA profiling, and so on).

It is therefore important to revisit the Aadhaar Judgment, and determine what, precisely, the Supreme Court held in that case. While the judgment is widely known for having upheld the constitutionality of the Aadhaar programme while also limiting its scope in certain important respects, it was also the first time the Supreme Court dealt with the intersection of contemporary data collection, storage, and use practices, and fundamental rights. The principles that emerge out of that discussion, therefore, have a significance that goes beyond the specific holding in that case.

Overview

To understand clearly what is at issue, let us begin with certain conceptual distinctions. The Aadhaar Judgment involved three levels of analyses: (i) an analysis of facts involving the Aadhaar programme; (ii) an analysis of applicable legal and conceptual standards; (iii) and an application of those standards to the facts (in order to determine whether and to what extent the Aadhaar programme passed constitutional muster). On this blog, in the aftermath of the judgment, a group of us analysed (i) and (iii) in some detail, and criticised the Court on both counts. The Court’s decision to uphold the Aadhaar programme, we argued, was premised on a wrong understanding of facts, and a wrong application of legal standards to those wrongly-determined facts. In this post, I intend to bracket those two questions, and complete the analysis be examining issue (ii) in some detail: i.e., the legal standards themselves.

I will argue that if we read the Aadhaar Judgment along with the nine-judge bench decision that upheld privacy as a fundamental right in K.S. Puttaswamy v Union of India (I) [“the Privacy Judgment”], certain important principles emerge (and on these principles, both the majority and Chandrachud J.’s dissenting opinion were in broad agreement). In summary, the Supreme Court held that (i) the collection, storage, and use of data in a manner that enables profiling is unconstitutional, (ii) data minimization, purpose limitation, and limited data retention are integral to any legislation or executive act involving data collection; (iii) use by private parties of the Aadhaar database is forbidden; and (iv) in testing the constitutionality of any specific measure that infringes the right to privacy/involves data collection and processing, the proportionality standard is applicable. This standard places an evidentiary burden upon the government to justify both the rationality of the measure, as well as its necessity (i.e., no alternative measures that infringe rights to a lesser degree are available).

The Role of Facts and Law

To understand the holding of the Supreme Court in the Aadhaar Judgment, it is important to begin with the main grounds of challenge. As indicated above, the Aadhaar challenge involved a set of legal claims, based upon a set of factual assertions. Relevant for our purposes here were the contentions that (i) Aadhaar enabled a surveillance State by allowing the government to track individual transactions through the authentication mechanism, (ii) Aadhaar enabled profiling by allowing the merging of data silos, (iii) the data collection was excessive and breached the right to privacy, (iv) Section 57, which private parties’ access to the database, breached the principle of purpose limitation, and also enabled commercial surveillance.

It is of vital importance to note that the Aadhaar Judgment rejected none of the petitioners’ legal claims; rather, to the extent that the Court found against the Petitioners, it did so because it disagreed with their factual arguments, while agreeing with the legal claims (and it was those findings that we criticised last year on this blog). In other words (to take one example), the Court found that the Aadhaar programme did not allow for the merging of data silos; however, it becomes clear from a reading of the judgment that had it been the case that the merging of data silos was allowed, the Court’s conclusion would also have been different.

Surveillance

So: on the first contention (surveillance), the Court found on facts that, among other factors, the legal prohibitions upon the sharing and disclosure of core biometric data, sharing of e-KYC data only with user consent, no transmission of identity information back to the Requesting Entity, and the retention of authentication logs only for a short period, precluded the possibility of State surveillance. In addition, the Court found on facts that the merging of data silos was prohibited, the data collection at the time of enrollment was minimal (fingerprints and iris), and the Authority was purpose blind. Consequently, the Court specifically held that “we are of the view that it is very difficult to create profile of a person simply on the basis of biometric and demographic information stored in CIDR.”

Data Protection and Privacy: Principles of Data Minimisation, Purpose Limitation, and Safeguards

On the issue of data protection and privacy, the Court specifically observed that “the crucial requirements, which are indicative of the principles for data protection that India adheres to, inter alia include… information collected shall be used for the purpose for which it has been collected [“purpose limitation”]… Body corporate or any person on its behalf shall, prior to the collection of information, including sensitive personal data or information, provide an option to the provider of the information to not to provide the data or information sought to be collected … Disclosure of sensitive personal data or information by body corporate to any third party shall require prior permission from the provider of such information, who has provided such information under lawful contract or otherwise, unless such disclosure has been agreed to in the contract between the body corporate and provider of information, or where the disclosure is necessary for compliance of a legal obligation.” (paragraph 166)

In this context, the Court’s discussion of case law from the European Union was particularly illuminating. The Court discussed judgments such as Marper, where the storage of DNA profiles had been struck down because of their “blanket and indiscriminate nature” (paragraph 178) (in particular, failing to distinguish between suspects and convicts); Digital Ireland, where an EU Directive that enabled profiling without any temporal or spatial limits; Tele2, where metadata collection was struck down because it violated the data protection principles referred to above (again, it was indiscriminate in nature, and affected individuals without any probable cause of suspicion). The Court concluded by noting that “it is evident from various case laws cited above, that data collection, usage and storage (including biometric data) in Europe requires adherence to the principles of consent, purpose and storage limitation, data differentiation, data exception, data minimization, substantive and procedural fairness and safeguards, transparency, data protection and security. Only by such strict observance of the above principles can the State successfully discharge the burden of proportionality while affecting the privacy rights of its citizens.” (paragraph 187) It will be noted that these are the exact principles that the Court held operated in India as well; European case-law, thus, is heavily persuasive authority on this issue.

The Court then went on to specifically analyse the provisions of the Aadhaar Act on the touchstone of these principles. It held that “data minimization” was satisfied because the information collected was minimal, and the nature of the transaction or the individual’s location was not revealed during authentication; at the same time, the Court invalidated the storage of any form of metadata other than “process metadata”, in order to meet the requirements of data minimization; it also held that “purpose limitation” was satisfied because certain definitional provisions had been read down – and – critically – Section 57, which allowed private parties to use the database under cover of any “law or contract” had been struck down (as would be done later in the judgment); on data retention, the Court restricted the time period for which the data could be stored to six months.

On both counts, the petitioners made a specific argument that there were insufficient safeguards under the framework of the Act with respect to data sharing, as – in particular – the police could gain access to the database. The Court answered this by holding that these concerns were assuaged by (a) reducing the period of data retention to six months, (b) requiring that if through a judicial order any individual’s information was to be shared, that person would have to be given a hearing (under S. 33 of the Act); in particular, and crucially, the Court noted that “there is a reasonable presumption that the said court shall take into consideration relevant law including Article 20(3) of the Constitution as well as privacy rights or other rights of that person before passing such an order.” (c) sharing of information that did not go through a judicial process (such as in cases of national security under S. 33(2)) was invalid, and a judicial member would have to be added to the decision-making authority; and that Section 57 had been struck down (paragraph 220).

Data Silos

Thirdly, on the aspect of the integration of data silos, the Aadhaar Judgment noted that in the Privacy Judgment, it had clearly been held that isolated information silos, when aggregated, could enable profiling (paragraph 232); as indicated above, the Court found that as a matter of law silos remained integrated, and were not permitted to be aggregated.

As an overall point, the Court held additionally – while addressing the privacy claim – that as part of the balancing process, the expectation of privacy in biometrics and irises was relatively low (as opposed to, for example, medical data); thus, overall, data collection remained “minimal”, and that this helped tip the balance of rights in favour of Aadhaar. (paragraphs 295 – 297, 308)

Proportionality

Fourthly, moving on to specific challenges beyond the Aadhaar Act, the Court upheld the mandatory linking of Aadhaar with PAN, but struck down linking with bank accounts and SIM cards. In each case, the Court’s rationale was founded on the question of whether the government had managed to discharge its evidentiary burden under the proportionality standard (i.e., demonstrating a legitimate State aim, a rational connection between the measure and the aim, that the measure was least restrictive with respect to fundamental rights as compared to all other alternatives, and finally, that on balance, it was proportionate). On the issue of PAN Cards, it held that the government had demonstrated with “empirical data” that as Aadhaar was a unique identifier, it could deal with the problem of bogus or duplicate PAN cards (paragraph 421, 423); on the other hand, as far as bank accounts were concerned, the Court specifically held that “that it does not meet the test of proportionality and is also violative of right to privacy of a person which extends to banking details.” (paragraph 429); importantly: “under the garb of prevention of money laundering or black money, there cannot be such a sweeping provision which targets every resident of the country as a suspicious person. Presumption of criminality is treated as disproportionate and arbitrary.”

The Court went on to hold that the State had not even demonstrated how mandatory linking would solve the problem of black money, and why alternative methods of KYC were insufficient; mere “ritual incantation” of black money would not suffice under the proportionality standard (paragraph 434), in a world in which maintaining a bank account had become “almost a necessity” (paragraph 435); rather, “there should have been a proper study about the methods adopted by persons who indulge in money laundering, kinds of bank accounts which such persons maintain and target those bank accounts for the purpose of Aadhaar. It has not been done.”

And the Court returned a similar finding on the issue of SIM cards, noting that “for the misuse of such SIM cards by a handful of persons, the entire population cannot be subjected to intrusion into their private lives. It also impinges upon the voluntary nature of the Aadhaar scheme. We find it to be disproportionate and unreasonable state compulsion.” (paragraph 442)

The Legal Standards

In summary, therefore, the Aadhaar judgment proceeded in this way: the Supreme Court accepted the Petitioners’ constitutional tests for adjudicating the validity of the Aadhaar programme. It found that parts of the Aadhaar programme were compliant with these tests, and parts of it were not. At some places, the Court found that compliance was possible if certain provisions were read down, or interpreted narrowly. At other places, it found that it was not possible – and those provisions were struck down. When we read this holistically, and in view of the Privacy Judgment, the following principles (as indicated above) emerge:

Profiling is unconstitutional. Consequently, aggregation of data silos that enables profiling is also unconstitutional. The “360 degree view” of citizens that certain states and police departments have proclaimed as a matter of pride, is not permitted under law.
- As a corollary, collection and storage of metadata that enables profiling is also unconstitutional.
Purpose limitation is mandatory for data collection. In other words, if law enables data collection for “x” purpose, it cannot then be stored/used for any purpose other than X.
- Two important corollaries follow from (a) and (b). First, the Aadhaar database cannot be accessed by other bodies (for example, the police). Not only would this breach both (a) and (b), it would also – in this specific case – breach the right against self-incrimination (it is for this precise reason that the Court insisted that sharing of information could only be done through a specific and individual judicial order, or an order involving a judicial member).
- Secondly, laws for data collection cannot be framed in generic or open-ended terms. They must categorically specify the purpose for which data is collected (and will be stored and used), and their constitutionality will be judged on that count.
Private parties are not authorised to access the Aadhaar database. This becomes important in light of the fact that after the judgment, an ordinance – and then a law – was passed just to allow this. This law is unconstitutional. It may be argued that there are parts of the judgment that suggest that the only part struck down in Section 57 was the part that allowed access even through a “contract.” This argument cannot succeed. The Aadhaar Judgment is clear on more than one occasion that the part involving body corporates is the one that is struck down – law or contract notwithstanding. There are three further reasons why this interpretation is correct: first, the fact that clearly the database should not be made accessible purely through a contract was not the only reason why the Court found Section 57 unconstitutional. Section 57 was also struck down because it violated purpose limitation – and the distinction between law and contract is agnostic in that regard; secondly, the Court upheld the Aadhaar Act as a money bill on the basis (inter alia) that it had already struck down Section 57 (and that the rest of the Act was substantially a money bill). Obviously, this could not have been the case if only a part of Section 57 had been struck down – the procedural flaw would have remained in that case; and thirdly, the Court struck down Section 57 because it enabled commercial surveillance – another point that is agnostic about the difference between law and contract.
Any law requiring data collection must satisfy the principle of proportionality. This principle requires the government to demonstrate the necessity of the collection, through concrete evidence. (for example, if the government wants to mandatorily link Aadhaar with Voter IDs, it must demonstrate the factual necessity for it, and also that alternative methods of “de-duplication” are insufficient). Crucially, data collection cannot be blanket – that is, if the goal is to identify a specific instance of wrong-doing or prevent crime (in policing), the State cannot achieve that by blanket and indiscriminate data collection, that fails to distinguish between those against whom there is probable cause of suspicion, and against whom there is not. In other words, data collection statutes must be specific and targeted.
- The period of data retention also speaks to the proportionality of the measure. Retaining data for an excessive period renders the measure disproportionate.
The greater the reasonable expectation of privacy in the data in question, the higher the burden of justification upon the State. In the Aadhaar Judgment, the Court held that the expectation of privacy in biometric details and iris scans was low. However, for any other species of data, (for example, DNA), the analysis will have to be undertaken afresh.

Conclusions

As we pointed out at the time of the judgment, there are some serious doubts over the Court’s analysis of facts, and application of law to the facts, throughout the course of the verdict. Those doubts remain. However, while issues of that kind are specific to the judgment – and to the constitutionality of Aadhaar – the interface between technology and fundamental rights obviously is not. It is here that the legal standards evolved by the Court in the Aadhaar Judgment are important, because is they – and not the concrete, fact-specific holding on the constitutionality of Aadhaar – that will provide the constitutional framework within which future disputes will be litigated. In this post, I have attempted to show that on that question, the Supreme Court articulated – and accepted – a rigorous and privacy-protective set of legal standards. A correct application of those standards would invalidate – or at least, throw into serious doubt – the government’s plans for open-ended data collection (under the guise of anodyne terms such as “data is the new oil), facial recognition tenders, and indiscriminate DNA profiling; most importantly, these standards provide a crucial yardstick from which to judge the adequacy of the Data Protection Act that is eventually passed by Parliament. Any such legislation – it hardly needs reminding – must comply with these standards, as they are grounded within the Constitution. In other words, the soon-to-come statutory landscape of data protection in India must adhere to the constitutional framework that has been traced out above.

The Afterlife of the Aadhaar Dissent: The Jamaican Supreme Court Strikes Down a National Biometric Identification System

April 13, 2019April 13, 2019 Gautam Bhatia1 Comment

Justice Charles Evan Hughes’ famous aphorism, that a dissent is an “appeal to the brooding spirit of the law, to the intelligence of a future day”, has passed into legend. It was famously invoked by Justice H.R. Khanna, while concluding his dissent in the Habeas Corpus case. But sometimes, a dissent is not limited to a footnote in the judicial lore of a nation, waiting for the years to pass by until the “intelligence of a future day” dawns. Sometimes, like the swallow flying south, a dissent becomes part of the global migration of ideas. It finds fertile soil far from home, there to bloom into the full richness that it has been denied in its own native environment.

Earlier this week, the Supreme Court of Jamaica struck down the Jamaican National Identification and Registration Act [“NIRA“]. The NIRA was a law that mandated the collection of biometric information from all Jamaican residents, and its storage in a centralised database. The similarities with Aadhaar are immediate and clear, and indeed, a substantial part of the judgment(s) were focused on comparisons between NIRA and the Aadhaar Act, and the Indian Supreme Court’s judgment in Puttaswamy. And what is striking about the judgments of Chief Justice Sykes and Justice Batts is that, after a detailed and painstaking engagement with Puttaswamy, both judges held that, on multiple counts – on the application of the proportionality standard, on the articulation of freedom and privacy, on the dangers of centralised databases, and on the shape and design of data protection frameworks, it was Chandrachud J.’s dissenting opinion that was persuasive, and deserved to be followed. The NIRA, accordingly, was struck down as unconstitutional.

NIRA: Similarities and Differences with Aadhaar

As the sketchy description outlined above indicates, NIRA and Aadhaar bear substantial similarities. Indeed, these similarities went beyond the collection and storage of biometric information, and extended to the design of the enactments: like Aadhaar, NIRA established a centralised database [“NCID“], a centralised authority to deal with collection and storage, contained provisions for private party access, had provisions for when data could be accessed, and so on. Furthermore, the justifications offered by the State were remarkably similar: preventing and eliminating crime, preventing corruption (FATCA was cited as well!), streamlining delivery of benefits, facilitating ease of identification, and so on.

At the same time, however, there were some substantial formal differences between NIRA and Aadhaar (why I use the word “formal” will become evident immediately hereafter, to anyone familiar with how Aadhaar actually works in practice). First, enrolment under the NIRA was legally mandatory, on pain of criminal sanctions; secondly, information collected under NIRA was substantially more than that collected under Aadhaar (it included blood samples, for example); and thirdly, third parties had formal access to the database under NIRA.

The judgment(s) of the Jamaican Supreme Court made much of these differences between NIRA and Aadhaar to argue that criminalising non-compliance was disproportionate, that the information taken did not comply with the principle of data minimalism, and that the access of third parties raised constitutional concerns of the privacy and security of the data. What is remarkable, however, is that despite finding these substantial formal differences, and despite finding that the Indian Supreme Court had read down the Aadhaar Act in significant ways (for example, by holding that in case of an authentication failure, an individual was entitled to present an alternative identification), the Jamaican judges still went on to follow, in granular detail, the judgment and reasoning of Chandrachud J.

Justice Batts and the Primacy of Choice

I begin with Batts J.’s judgment, because of its focus on one straightforward and clear principle, which was also at the heart of Chandrachud J.’s dissent: the primacy of individual choice in a constitutional democracy, and how meaningful choice is at the heart of any understanding of human freedom. The “choice”, in this case of course, involves the right of the individual to choose how to identify herself to the State, from among a range of reasonable alternatives.

After summarising the holding of the Aadhaar Majority, Batts J. cited some of the opening words of Chandrachud J.’s dissent, about how technology was reshaping the relationship between citizens of the State. He then went on to cite the core of Chandrachud J.’s reasoning in great detail, because: “his decision is sufficiently important, and so reflective of my own views, that I will outline the details.” (para 337) In particular, Batts J. cited Chandrachud J.’s views on private party usage, the failure of the State to demonstrate that less intrusive means would not work, the merging of data silos, the doctrine of unconstitutional conditions (paragraph 339), and the general presumption of criminality that entailed nationwide biometric collection (paragraph 340). In closing, he noted that:

In words, which I respectfully wish to adopt as my own, the learned Judge [i.e., Chandrachud J.] summarised the overall constitutional failings of the Aadhaar scheme thus … ‘the technology deployed in the Aadhaar scheme reduces different constitutional identities into a single identity of a 12-digit number and infringes the right of an individual to identify herself or himself through a chosen means. Aadhaar is about identification and is an instrument which facilitates a proof of identity. It must not be allowed to obliterate constitutional identity.'” (paragraph 341)

On this basis, Batts J. therefore held that:

The [NIRA] Act proposes to compel persons to divulge information personal to them. It is the right to choose, whether or not to share personal information, which individual liberty in a free and democratic state jealously guards. The mandatory nature of the requirement as well as the breadth of its scope, and the absence of a right to opt out, are not justified or justifiable in a free and democratic society. If it is intended to prevent corruption or fraud, then it is premised on the assumption that all Jamaicans are involved with corruption and fraud. The danger of abuse by the state or its agencies, and the removal of personal choice, outweigh any conceivable benefit to be had by the community or state. (paragraph 349)

This, it will be noted, is squarely applicable to Aadhaar, which has long been mandatory for all practical effects and purposes.

The Chief Justice, Proportionality, and the Surveillance State

The judgment of the Chief Justice was substantially longer (around 250 pages to Batts J.’s 50), and covered more ground. The Chief Justice began with a detailed analysis of the standard of constitutional review under the Jamaican Charter. His discussion is fascinating in its own right, but for our purposes here, the Chief Justice accepted that the relevant standard was that of proportionality, as articulated by the Canadian Supreme Court in Oakes, and of course, the Indian Supreme Court in Puttaswamy. Crucially, however, the Learned Chief Justice noted that:

I am of the view that this approach provides a proper conceptual framework within which to examine NIRA in order to see whether the provisions in that statute meet the standards indicated by the majority in Puttaswamy (September 26, 2018). I must also say that in the application of the standard I prefer the reasoning of Dr Chandrachud J to that of the majority. (paragraph 151)

(For the multiple errors that the Majority made in applying the proportionality standard, see here).

This, the Chief Justice held, was because:

… I am of the view that the strict application of Oakes is the best way to preserve fundamental rights and freedoms. The majority [i.e., in Puttaswamy] appeared to have taken a more relaxed view. The strict Oakes test makes a more granular scrutiny possible by saying that the court must take account of any deleterious effect of the measure being relied on to meet the objective. Thus the greater the severity of the effect the more important the objective must be, furthermore the measure chosen needs to be shown to be the least harmful means of achieving the objective. (paragraph 177)

With these words, the Chief Justice got to the heart of the deficient legal analysis in the Aadhaar Majority. As I have noted previously, the Aadhaar Majority treated the “least restrictive alternative” element of the proportionality standard in an utterly cavalier fashion, refusing to consider relevant facts, and presenting no analysis of the legal burdens involved. For the Chief Justice, on the other hand (and also for Chandrachud J.), it was a critical element of the test, with the burden lying upon the State (especially because relevant information lay with the State). And, in particular:

In the event that the court is of the view that there is a tie then the claimant must prevail for the reason that in constitutional litigation the attitude of the court must be that the right or freedom prevails unless the violation is clearly justified. This approach ensures that the guarantee given by the Charter is maintained. (paragraph 203)

In this context, the Chief Justice went on to find that the State had provided no evidence that mandatory enrolment with criminal sanctions was the least intrusive way of achieving its goal (the Chief Justice distinguished this from Indian Supreme Court proceedings, where the evidence was litigated in some detail). Noting that there was no real evidence about the scale of the existing problems that necessitated this measure, the Chief Justice therefore held that it failed the test of proportionality. (paragraph 228)

After this, the Chief Justice turned to the nature of biometric systems. Here, he began his analysis with the following observation:

For that [i.e., the analysis of biometric systems] I rely on the judgment of Dr Dhananajaya Chandrachud J in Puttaswamy (delivered September 26, 2018). From reading the judgments in this case Dr Chandrachud J, in my respectful view, demonstrated a greater sensitivity to the issues of privacy and freedom that is not as evident in the judgments of the majority or the other judges who delivered concurring judgments. His Lordship had a clear-eyed view of the dangers of a state or anyone having control over one’s personal information and generally I preferred his approach to the issue over that of the other judges. (paragraph 230)

This, of course, is a very polite and respectful way of saying to the Aadhaar Majority, “you just didn’t get it, did you?” And what was it that the Aadhaar Majority didn’t get? Citing paragraphs 120 to 126 of Chandrachud J.’s dissent, the Chief Justice then observed that:

… his Lordship’s major point was that it is one thing to collect biometric data in the context of a criminal investigation and prosecution but quite another to have extensive biometric data collection outside of that context. The reason is that generally there is extensive and detailed provision regarding the collection and use of biometric information in the criminal law context. So far, in the context of general collection of biometric data outside of the criminal law context, it is likely to result in violations of fundamental rights unless there are very strict and rigorous safeguards because once there is a breach of the database the information taken is unlikely to be recovered in full. (paragraph 234)

Even more importantly, the Chief Justice then cited paragraphs 128 to 131 of Chandrachud J.’s judgment, dealing with identification systems, to observe that:

This passage is highlighting the risk of the combined effect of technology with control over data. Unlike the majority in Puttaswamy (September 26, 2018) who seemed to have taken a rather benign view of this aspect of the matter Dr Chandrachud J destroyed the notion that merely because similar or identical information is already in the possession of the state that in and of itself makes taking of such information again legitimate. His Lordship clearly understood the implication of collecting biographical information, combining it with biometric then automating the process with supporting algorithms. Add to that the possibility of profiling. This scenario translates into great power over the lives of persons especially when that data and technology are in the hands of the state and powerful private actors as in Google, Amazon and the like. Of course, with the latter, the engagement is consensual or at the very least the person can opt out after sometime. What NIRA is proposing is control over vast amounts of data, no opt out and linking the data held in different silos by a unique identification number, thereby reducing anonymity even further and increasing the possibility of profiling and generating new information about the data subject. (paragraph 237)

What the Chief Justice understood – and what Chandrachud J. had understood in his dissent – was, of course, the existential peril posed to freedom and privacy that stemmed from merging silos of information, and the ways in which that could be used to generate entirely new sets of information, as well as facilitate profiling. As the Chief Justice observed, devastatingly, “respectfully, the majority in Puttaswamy (September 26, 2018) did not seem to have a full understanding of this and its implications in the say that has been demonstrated by Dr Chandrachud J.” (paragraph 238) On the basis of this bedrock of analysis, then, the Chief Justice went on to hold that NIRA unjustifiably and disproportionately impacted privacy. And in the course of his analysis, he also echoed Batts J., noting – crucially for our purposes – that “the most remarkable thing is that no submission was made to indicate how, for example, a voluntary scheme would prevent the state from providing reliable, safe and secure identification to its citizens or ordinary residents who wish to be part of the scheme.”

Lastly, the Chief Justice also found that Chandrachud J.’s dissenting opinion better articulated the shape and design of a data protection authority that could pass constitutional muster:

I adopt the following paragraph from his Lordship’s judgment at paragraph 236 and apply with such modifications are necessary for application to NIRA. His Lordship stated: An independent and autonomous authority is needed to monitor the compliance of the provisions of any statute, which infringes the privacy of an individual. (paragraph 247(88)).

The absence of any such authority was, therefore, another reason to hold the statute unconstitutional.

Conclusion

The Chief Justice set out his conclusions from paragraphs 245 to 254, striking down substantial portions of the Act, and then holding that they could not be severed – and therefore, the statute as a whole had to fail. Like the judgment of Batts J., the Chief Justice’s judgment is a fascinating study in its own right – in particular, in its assessment of the specific details of the NIRA system, in how it deals with the probabilistic character of biometric identification, the articulations of standards and burdens, the discussion of proportionality and the rebuttal of the State’s arguments that the Court must stay out of policy domains, and – very interestingly – in its disagreement with Bhushan J.’s concurring opinion on Aadhaar, on whether “national security” could be a ground to divulge personal information. Refreshingly, the Chief Justice held that the use of such terms was nothing more than a “Trojan Horse”, which would make the entire point of protecting fundamental rights illusory.

As the above discussion illustrates, however, for us, the most fascinating aspect of this judgment is the in-depth dialogue it undertakes with both the Majority and the Dissent in Aadhaar, on their own terms – and the rigorous and detailed reasons it gives for choosing to follow the Dissent over the Majority.

To end with Hughes again. His full quote reads:

A dissent in a court of last resort is an appeal to the brooding spirit of law, to the intelligence of a future day when a later decision may possibly correct the error into which the dissenting justice believes the court to have been betrayed.

But there are some occasions in history when the betrayal into error is recognised not within, but without. Sometimes, we need friends and colleagues in other parts of the world to hold up the mirror that we are unwilling or unable to look into. Perhaps it is the fate of the Aadhaar Dissent to travel around the world, a light in dark places, long before it is recognised by the brooding spirit of law in its homeland, and the error is corrected at last.

One can but hope.

(Disclaimer: The author was involved on the side of the Petitioners in the Aadhaar challenge.)

The Aadhaar Judgment: A Round-Up

October 5, 2018 Gautam Bhatia3 Comments

Here is a round-up of the ICLP blog’s coverage of the Aadhaar judgment. The arrangement of the posts tracks our suggested order of reading them. After that, some other critiques of the judgment have been provided as well. Filter, as always, for bias.

This page is meant to serve as a resource going forward. The Aadhaar judgment is not the end, but merely the first round in an increasingly crucial debate on the intersection between technology and the Constitution. Our aim is to work towards a legal and constitutional provision where technology is harnessed to expand human freedom, and not constrain it in service of the State (or of private corporations). As a great man once said, “it always seems impossible – until it is done.”

Overview

Factual analysis (A four-part series by Anand Venkat)

Legal Analysis

The Aadhaar Judgment and the Constitution – I: Doctrinal Inconsistencies and a Constitutionalism of Convenience.
The Aadhaar Judgment and the Constitution – II: On Proportionality (by Mariyam Kamil).
The Aadhaar Judgment and the Constitution – III: On the Money Bill (by Suhrith Parthasarathy).

Impact

The Aadhaar Judgment: Telecom Operators and the Legal Standing of Chandrachud J.’s “Dissenting” Opinion (by Prasanna S.).

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In addition, here are links to pieces elsewhere, on related topics.

Overview

Methods of Interpretation. (Apar Gupta)
Aadhaar Verdict No Reason to Celebrate for the Government (Prasanna S.)
Aadhaar valid, but restricted, and still a problem (Vrinda Bhandari).
Aadhaar verdict: SC Majority Judgments Lacks Consistency in Logic and Reasoning, and Turns Constitutional Analysis on its Head (Malavika Prasad).
Aadhaar verdict: Dissenting Judge D.Y. Chandrachud Feels Money Bill Tag may be Misused to Escape Rajya Sabha Scrutiny. (Malavika Prasad).

Money Bill

The Perils of Taking the Money Bill Route (Prasanna S.)

Section 57 (use by private parties)

Section 57: Why Aadhaar can’t be used as authentication by private companies (Prasanna S.)
In Striking Down Section 57, SC has Curtailed the Function Creep and Financial Future of Aadhaar (Vrinda Bhandari and Rahul Narayan).

Impact

Aadhaar Judgment Sets a Legislative Agenda (Apar Gupta).

The Aadhaar Judgment and Reality – IV: On Data (Guest Post)

October 5, 2018 Gautam Bhatia4 Comments

(This is the fourth and concluding part of Anand Venkat’s guest post series interrogating the factual foundations of the Aadhaar judgment. It is also the concluding essay in this blog’s coverage of the Aadhaar judgment (for now). We will be putting up a round-up shortly).

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In this final part on the analysis of the Aadhaar judgement, we touch upon how the Majority judgement handled the arguments on data security in relation to the Aadhaar data, and contrast it with the minority opinion of Chandrachud J.

Data leaks

Are data leaks harmful for the people involved? The SC did not want to consider this question at all, and punted it to the currently pending case in Delhi HC (Page 250, footnote):

A challenge to the Aadhaar project for violation of IT Act and Rules has been filed in the Delhi High Court in the matter of Shamnad Basheer v UIDAI and Ors. Therefore, we are not dealing with this aspect, nor does it arise for consideration in these proceedings.

Data minimization

It was argued extensively before the court that the data collected during Aadhaar enrolment includes not just demographic data and biometrics, but also additional information, such as religion and caste, which was explicitly forbidden by the Aadhaar Act; and furthermore, this additional information was sent to the various State Resident Data Hubs (SRDHs).

However the Majority did not engage with the evidence, and instead merely cited the Aadhaar Act. It neither declared the collection of additional information in variance with the Aadhaar Act as illegal, nor did it want to deal with the information stored in SRDHs, obtained during enrollment (Page 274, Para 193).

Section 2(k) specifically provides that Regulations cannot include race, religion, caste, tribe, ethnicity, language, records of entitlement, income or medical history. Thus, sensitive information specifically stand [sic] excluded.

It also concluded that as per the powerpoint presentation by the UIDAI CEO, which is not part of the affidavit, that location information was not collected (page 541):

We have recorded in detail the powerpoint presentation that was given by Dr. Ajay Bhushan Pandey, CEO of the Authority, which brings out the following salient features: (i) During the enrolment process, minimal biometric data in the form of iris and fingerprints is collected. The Authority does not collect purpose, location or details of transaction.

By doing so, it chose to ignore the affidavits filed by Manindra Agarwal on UIDAI’s behalf, that breach of verification logs will result in the leakage of location data. The minority opinion however, explicitly refers to the affidavit and declares that: (page 886).

The report indicates that it is possible through the Aadhaar database to track the location of an individual. The Aadhaar database is different from other databases such as PAN Card or driving license. The Aadhaar database is universal and contains the biometrics of an individual. The threshold to scrutinize the effects of this database is therefore much higher as compared to that of other databases.

And once all the contradictions were resolved by selectively ignoring the factual claims made by the petitioners (and also supported by affidavits filed in support of UIDAI), the Majority then proceeded to declare that (page 274, para 194):

We find that Section 32 (3) of the Aadhaar Act specifically prohibits the authority from collecting, storing or maintaining, either directly or indirectly any information about the purpose of authentication. The proviso to Regulation 26 of Authentication Regulations is also to the same effect. Thus, the principle of data minimization is largely followed.

Data classification

An important question in cyberspace is how to classify personal data as sensitive or non-sensitive. It must be noted a priori that this classification depends upon the context. For instance, my true name might reveal my religion, which could be used to harm me in a conflict zone, but would be entirely harmless elsewhere. Similarly, fingerprint and facial scans, freely obtainable through photography, could be harmless if shared without associated identity information, but could be deadly for public anonymity in authoritarian regimes.

Once again, the Majority is oblivious to this basic distinction, when it proclaims that (page 273, para 193):

Demographic information, both mandatory and optional, and photographs does [sic] not raise a reasonable expectation of privacy.

On the other hand, Chandrachud J.’s minority judgement correctly notes that (page 778, para 148):

Section 29(1) of the Aadhaar Act expressly states that ‘core biometric information can never be shared with anyone for any reason whatsoever or be used for any purpose other than generation of Aadhaar numbers and authentication under this Act’. However, this provision which seemingly protects an individual’s core biometric information from being shared is contradicted by Section 29(4)253 of the Act, the proviso to which grants UIDAI the power to publish, display or post core biometric information of an individual for purposes specified by the regulations. The language of this section is overbroad and which could lead to transgressions and abuse of power. Moreover, sub-sections 29(1) and (2), in effect, create distinction between two classes of information (core biometric information and identity information), which are integral to individual identity. Identity information requires equal protection as provided to core biometric information.

Encryption

While the UIDAI made the claim that all biometric data is encrypted, the Majority went further and made the astonishing claim that the encrypted data was also sent to the CIDR immediately. The offline enrolment client, however, does not do that, in order to facilitate enrollments done in places where internet connectivity is non-existent.

Furthermore, the UIDAI also claimed that the entire Aadhaar enrolment eco-system is foolproof, because within few seconds of the biometrics having been collected by the enrolling agency, the said information would transmitted the Authorities/CIDR (in an encrypted form), and go beyond of the reach of the enrolling agency.

Chandrachud J.’s minority judgement, however notes correctly that encryption was not even mandated in the initial stages (page 772)

In the ‘Aadhaar Handbook for Registrars 2013’ (“2013 Handbook”), it was stated that “UIDAI has defined security guidelines for the storage of biometric data”. While it is indicated in the handbook that guidelines for storage were defined by UIDAI, it is evident that this took place only after 2010 before which the registrars were functioning without guidelines mandating how the biometric data was to be kept secure.

Hacking and Hope

During the course of the hearing, the counsel for the petitioners, Mr. Divan, pointed out various attacks on the CIDR. And one of them was the UP Aadhaar hack case, which was not only part of the oral record, but related FIRs around these attacks were part of the written submissions by Mr. Grover as well. This is how the Court responded:

It may, however, be mentioned that of late certain reports have appeared in newspapers to the effect that some people could hack the website of CIDR, though it is emphatically denied by the UIDAI. Since there are only newspapers reports to this effect which appeared after the conclusion of hearing in these cases and, therefore, parties could not be heard on this aspect, we leave this aspect of the matter at that with a hope that CIDR would find out the ways and means to curb any such tendency.

It is possible to argue that the above paragraph refers not to the petitioners’ submissions, but to a later HuffPost article on data breaches. However it does not change the reality that the Majority did not engage with materials provided by the petitioners through affidavits, written submissions and also police first investigation reports filed by the police themselves.

Conclusion

How do you analyze the impact of a technological regime on the Constitution? That was the heart of the question in the Aadhaar challenge. There are always unknown positives and unknown negatives when a new technology is rolled out. The court was asked to make a comparative analysis between the two, and come up with a decision.

The typical process used is a cost-benefit analysis (which, under constitutional review, is further refined and made more rigorous by taking into account rights violations, as part of the proportionality standard). However until today, the State has not even engaged in such a exercise, for it would instantly show that the costs far outweigh the benefits, on all – economic, technological and data security – angles. Instead, the State denied the very existence of costs, and stated and the benefits were immense, without a shred of evidence.

The Majority opinion, however has done something even more astonishing. It has refused to engage with factual claims on these aspects made by the Petitioners, and then went to declare that Aadhaar is unhackable and foolproof, based on the submissions of the State. By doing so, it also set the template for future litigations. All the state has to do, henceforth, when it rolls out technological regimes that are untested and have huge implications to the population, is to ensure that it

Rolls them out at scale.
Uses any means necessary to ensure the roll out.
Ignores any previous court orders barring it from the roll out.
Denies all harmful effects of the technology on the ground.
Makes up evidence about the benefits.
And also makes a powerpoint presentation to the court, when challenged on these aspects.

The Majority opinion on Aadhaar showed that this strategy might well succeed. However, the dissenting opinion by Chandrachud J indicates that there might yet be hope for a future Court to have an intelligent factual debate about the intersection of technology, freedom and state.

In the interim, people can continue to die, crucified on “the unproven plea of exclusion of some”, submitted as evidence or in affidavits. After all, the dead don’t speak, and even if they do, the court won’t listen.

The Aadhaar Judgment: Telecom Operators and the legal standing of Chandrachud J.’s “dissenting” opinion

October 3, 2018October 3, 2018 Gautam Bhatia2 Comments

(A stand-alone essay in our ongoing series on the Aadhaar judgment, this is a guest post by Prasanna S.).

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Justice DY Chandrachud’s celebrated judgment in the Aadhaar case has been described as, broadly speaking, a ‘dissent’. Just before he pronounced the judgment, he had himself announced in open court that it was a partial dissent. However, there is nothing in the judgment to indicate he had read the other two judgments or if any of the other two had read his judgment. There is neither an expression of dissent nor concurrence in the judgments. The extent of disagreement between the ‘Majority’ opinion led by Justice Sikri and the ‘Minority’ opinion of Justice Chandrachud’s is to be analysed and understood. The opinion of Justice Bhushan who broadly concurred with Justice Sikri (barring on the issue of Bank Account-Aadhaar linking) is, for simplicity, not discussed here.

A selection of key issues and the indication of broad agreement/disagreements in the judgments is as follows.

Concurrent findings of the Majority and the Minority:

The decision of the Speaker on the certification of a Bill as a Money Bill is not immune from judicial review. (I understand that the Majority has equivocated on whether this needs to be decided at all in this case. Be that as it may.)
Use of Aadhaar by private parties is unconstitutional (Section 57).
The PMLA Rule that provided for mandatory Aadhaar-Bank Account linking is unconstitutional.
The DoT circular that mandated Mobile-Aadhaar linking is unconstitutional.

Divergence between the Majority and the Minority:

The Minority held that the entire Aadhaar Act and the Aadhaar project are unconstitutional. The Majority upheld the Act.
Section 59 of the Act that purported to save the Aadhaar scheme prior to the passage of the Aadhaar Act was struck down as unconstitutional by the Minority. It was upheld by the Majority.
Section 57 as a whole was struck down by the Minority. On the other hand, Section 57 was read down only partially by the Majority.

The focus of this article is the issue of the decision on the Mobile-Aadhaar linking under the 23.03.2016 DoT circular. As seen above, both the Majority and the Minority quashed the circular as unconstitutional. The Minority however went on to direct that the Union of India and TRAI should immediately direct the telecom operators to delete Aadhaar and biometric data of subscribers within two weeks (Para 285, internal page 394 of the Minority judgment). This article argues that such a direction, although present only in the Minority opinion, is binding law and the Union of India and TRAI are required to comply with it, unlike what some seem to think. The author did a brief twitter thread on the issue. This article attempts to somewhat exposit it.

Reading separate opinions

When there are separate opinions delivered by the Supreme Court, the exercise extracting the ratio or the ‘law declared’ by the Court is not always straightforward. Sometimes, there is a summary of the judgment signed as the ‘View of the Court’ (or ‘View by the Majority’), which may be of help – as was the case in Puttaswamy(I) (the privacy judgment). Such a summary arrived at by the bench interpreting their own judgments without hearing all the parties as to the reading of each of the judgments has at times created controversy (such as in Kesavananda Bharati).

It is a common practice to analyse the opinions on an issue-by-issue basis and find the bench strength that has supported a particular view in regard to each issue, as this blog did for Puttaswamy(I) on the question of limitations of the fundamental right to privacy. (Incidentally, the author of that post Gautam Bhatia has concluded that the law of the land as to the test of constitutionality for a law impacting the right to privacy is to be found in Justice Kaul’s opinion, which was a separate concurring opinion which was written only for himself, and clearly in the ‘minority.’) This approach of trying to extract or mine ratio from minority opinions (which may be, broadly speaking, ‘concurring’, ‘dissenting’, or partly ‘concurring’) is not plucked out of thin air. It has not only been part of the common law legal tradition (on the principle that there is a presumption that each of the judgments has been read by everyone on the bench and a lack of dissent on any of the points in the judgment should be taken as a concurrence on that point), but also anchored in the text of India’s constitution.

Distinction between a ‘judgment’ and ‘law declared’ – Can a ‘dissenting judgment’ be a source of law?

The law on this mining exercise is governed by Articles 141 and 145(5) of the Constitution.

Article 141 of the Constitution says,

The law declared by the Supreme Court shall be binding on all courts within the territory of India.

Article 145(5) of the Constitution says,

No judgment and no such opinion shall be delivered by the Supreme Court save with the concurrence of a majority of the Judges present at the hearing of the case, but nothing in this clause shall be deemed to prevent a Judge who does not concur from delivering a dissenting judgment or opinion.

One of the earliest cases that decided the question of whether the judgment in Article 145(5) means the same as ‘law declared’ under Article 141 was Mahendra Thakar v. S.P. Pande AIR 1964 Bombay 170. Therein, a division bench of the Bombay High Court held that:

“There does not appear to be any warrant for reading the provision of Article 145(5) into the provisions of Article 141, and we do not think that the “law declared” can be approximated to the judgment delivered by the Supreme Court. On the other hand, having regard to the provisions of Article 145(5) that a Judge who does not concur may also deliver a judgment, it is clear that the law declared may as well be in a dissenting judgment as in a majority judgment. The argument, therefore, that the three Judges whose decision resulted in the allowing of the appeal in Purshottam’s case did not form a majority of those holding that Article 14 applied to the second proviso to Section 34(3) does not make that the law declared.”

Prem Prakash Gupta v. Union Of India AIR 1977 All 482 held that:

The majority opinion did not express any opinion on this issue but the minority opinion, as expressed by Mahajan J., did examine this issue and answered it in the negative. In my view, in a situation where the majority of the Judges of the Supreme Court expressly chose not to examine a particular issue and decided the suit on certain other grounds, then the expression by the minority on such an issue can be said to have a binding force on the courts in India. In this view of the matter, I think the observations made by Mahajan J., are binding on me.

A similar approach has been followed in or has been laid down in a number of other High Court decisions, including the 2009 decision in Narinder Batra v. Union of India, where the current Union minister for finance, Arun Jaitley argued and won on that proposition.

It must be said that the aforementioned high court judgments have neither been overturned nor reaffirmed by the Supreme Court. There have been atleast two instances where the question has been argued. However, in both those instances, the supreme court did not venture an opinion on that as it was found that the majority judgments cited in the cases had in fact disagreed with the reasoning given by the minority opinion sought to be relied upon by the counsel.

Do directions contained in an opinion not expressly endorsed by the majority have the binding force of ‘law’?

However, in Ashok Kumar Gupta v. State of Uttar Pradesh (1997) 5 SCC 201, the Supreme Court dealt with the question of whether a direction by a plurality of judges led by Justice Jeevan Reddy in the Mandal Case (Indra Sawhney v Union of India) is binding given that the plurality was one-judge short of the majority of the judges in the bench. The Court relied on Sawant J’s separate opinion, concurring on that relevant conclusion and held that the direction by Justice Jeevan Reddy had binding force.

Both these propositions on binding law and binding directions also appeal to common sense. If there is a judicial opinion by a judge or set of judges sitting in the highest constitutional court of the land, it should normally be binding unless strong and compelling reasons exist to suggest otherwise – namely either a clear expression of disagreement with that opinion by a majority of judges of that bench, or a later supreme court decision of a larger bench having overruled it or disagreed with that opinion.

Conclusion

In the instant case, on the telecom circular issue, both the Majority and the Minority judgments in the Aadhaar case had agreed on both the conclusion and the reasons for its unconstitutionality. The Majority expressed no opinion on the deletion of the data, but the Minority directed such deletion. It must be presumed that the Majority impliedly concurred with that direction. The directions contained in the Minority opinion of Justice Chandrachud’s to the Union of India and TRAI relating to the deletion of telecom subscriber Aadhaar data is binding and has the force of law.

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(Credit: The author is thankful for the inputs provided by Goutham Shivshankar.)

(Disclosure: The author assisted the petitioners in the Aadhaar case before the Supreme Court)

The Aadhaar Judgment and Reality – III: On Surveillance (Guest Post)

October 2, 2018 Gautam Bhatia2 Comments

(This is the third and penultimate essay in Anand Venkat’s four-part series examining the factual foundations of the Aadhaar judgment.)

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In our attempt to further decode the factual errors in the Aadhaar judgement, it is worth asking an important question: why is genuine engagement with contradictory facts very hard? Charlie Munger wrote about 24 causes of misjudgement in 1995 and, not surprisingly, simple psychological denial comes up as number 2 in that list.

In this post, we will argue that simple denial alone can’t explain the Majority’s inability to deal with aspects of the petitioners’ challenge. Technological illiteracy is a factor as well.

Surveillance

What is surveillance? If a policewoman tags along a person, at all times, then it fits the definition of surveillance, because she knows all about the person. Now what if, instead of a policewoman, a recording device is always present? That too fits the definition. So surveillance is not simply someone knowing about a person, but having the capability to know all about her, and actively using that capability.

How is it possible for someone to have the capability to know all about a person ? The answer is “Body Tagging”. If every activity that the person ever does in her life can be reliably attached to her body, a detailed profile can be built about the person, which enables surveillance. Put simply, profiling is surveillance.

Body tagging a person’s life across multiple activities can be easily done, if the “body” is given a unique number, and the unique number is attached to every activity. Thus, if a technological means called “Aadhaar” can produce perfect “unique numbers” that are attached to a body, as the Majority judgement states in paragraph 55 – “when it comes to obtaining Aadhaar card, there is no possibility of obtaining duplicate card” – then mass surveillance is a logical corollary, if it is attached to other databases.

Surveillance: The absence of factual engagement

The Majority, however, chooses not to engage with the petitioners’ submissions about how the body tagging of persons, across multiple databases, is surveillance. It was brought to the court’s notice that many states have built “State Resident Data Hubs [“SRDHs”], which have body tagged sensitive personal details of their residents, available in multiple silos, and have merged them into one “golden” record. For instance, the state of Andhra has gone further than most and built star-trek dashboards, that display the intimate personal details of 43 million of the state’s 50 million residents: GPS coordinates of their homes, the medicines they use, the food rations they eat, what they say about the Chief Minister on their social media accounts, real-time feeds of thousands of security cameras (with some cameras inside people’s homes – voluntarily, of course), their castes and sub-castes, their religion, their student scholarships and old-age pensions, their movement in every state ambulance, and of course — their Aadhaar numbers.

The Majority avoids engaging with the argument because if it did, it would result in arriving at the same conclusion that Chandrachud J arrives at, in his dissenting opinion, that the technological design of the project actually subverts the Aadhaar Act – actually enabling profiling through surveillance – and hence cannot stand:

When Aadhaar is seeded into every database, it becomes a bridge across discreet data silos, which allows anyone with access to this information to reconstruct a profile of an individual’s life. It must be noted while Section 2(k) of the Aadhaar Act excludes storage of individual information related to race, religion, caste, tribe, ethnicity, language, income or medical history into CIDR, the mandatory linking of Aadhaar with various schemes allows the same result in effect. For instance, when an individual from a particular caste engaged in manual scavenging is rescued and in order to take benefit of rehabilitation schemes, she/he has to link the Aadhaar number with the scheme, the effect is that a profile as that of a person engaged in manual scavenging is created in the scheme database. The stigma of being a manual scavenger gets permanently fixed to her/his identity. What the Aadhaar Act seeks to exclude specifically is done in effect by the mandatory linking of Aadhaar numbers with different databases, under cover of the delivery of benefits and services. (Chandrachud J., dissenting, paragraph 274)

Surveillance: Internal contradictions

Instead of focussing on body tagging across various databases, the Majority instead focuses only on the surveillance potential of the “Metadata” stored in the CIDR. This leads to logically contradictory observations.

For instance, if Facebook and Google, can know the places where one has shopped and also know the movies that one watched, they already have “data.” But the Majority then went on to make the very bizarre claim that in Para 160 that “data” can turn into “meta-data”! “All this data is there with the companies in respect of its users which may even turn into metadata.”

In the very same paragraph, it makes the further astonishing claim that OTPs are sensitive personal information in the same manner as biometrics:

Every transaction on a digital platform is linked with some form of sensitive personal information. It can be an individual’s user name, password, account number, PAN number, biometric details, e-mail ID, debit/credit card number, CVV number and transaction OTP etc.

The Majority’s inability to understand technology also becomes clear from its discussion on “Authentication log retention”, in paragraph 260.

We do not find any reason for archiving the authentication transaction data for a period of five years. Retention of this data for a period of six months is more than sufficient after which it needs to be deleted except when such authentication transaction data are required to be maintained by a Court or in connection with any pending dispute. Regulations 26 and 27 shall, therefore, be amended accordingly. (paragraph 260)

Let us deconstruct the ruling here carefully. The judgement says that

Authentication transaction data needs to be deleted after six months.
But not if there is any pending dispute or ordered by a court.

By doing so, it restricts the time frame, in which a dispute could arise to “only six months”. This has ramifications for biometric fraud disputes such as Gujarat biometric data trade, where biometrics of legislators was sold en-masse for 7 lakh rupees and the Airtel LPG routing scam, as these scams went on for months before detection. But the Majority, through its ignorance of technology, ensures instead that it would not be possible for law enforcement to investigate such cases, through limiting the retention of metadata.

And here’s the contradiction: after all, if surveillance is indeed impossible and far fetched as was stated in para 197 (“… therefore, the threat to real-time surveillance and profiling may be far-fetched...”), why would long term retention of authentication logs would be an issue at all? The reading-down is both inexplicable and logically incoherent.

Addendum: Direct Benefit Transfer

There are three important pillars in Direct Benefit Transfer (DBT).

The Aadhaar number
Mobile
Bank Account

In the earlier rollout of DBT, the various schemes’ databases merely collected the bank account numbers or the post office savings bank account numbers of the beneficiaries. There was simply no need for either Aadhaar numbers or mobile numbers. However, once mandatory biometric authentication was introduced as a pre-condition for DBT, the situation changed drastically.

Biometric authentications are always fallible and the Majority’s refusal to engage with that simple technological fact, does not change the reality. Hence the only recourse is OTP authentication via the linked mobile phone. However, UIDAI does not verify the phone, during enrolment, which makes OTPs ineffective. The only “technological hack” then available for UIDAI to avoid biometric exclusion is Mobile linking.

Ever since National Payment Corporation of India (NPCI) introduced the Aadhaar mapper, which links bank accounts to Aadhaar numbers, central and state departments no longer collect beneficiary bank accounts, and instead use the NPCI Mapper to do Direct Benefit Transfers. Hence, for DBT via NPCI to work, seeding Aadhaar numbers into bank accounts was essential.

The court does not engage with the technological aspect of this ecosystem, when it rules that both Mobile and Bank linking are unconstitutional, and strikes them down. So in effect, without perhaps intending to, it has also brought the current Aadhaar-based DBT ecosystem, where NPCI and banks are important players, to a grinding halt. Further, it has only worsened the exclusion problem caused by fallible biometric authentication, by removing the OTP option.

Conclusion

The factual and logical contradictions outlined so far, lead one to conclude that the Majority has not understood that technological progress is making the law irrelevant. As Lawrence Lessig pointed out:

Every age has its potential regulator, its threat to liberty. Our founders feared a newly empowered federal government; the Constitution is written against that fear. John Stuart Mill worried about the regulation by social norms in nineteenth-century England; his book On Liberty is written against that regulation. Many of the progressives in the twentieth century worried about the injustices of the market. The reforms of the market, and the safety nets that surround it, were erected in response.

When faced with a civil liberties case, that is second longest in the history of the court, the least that the Majority could have done was to engage with the facts and the new emerging technological domain of cyberspace, and how it could make constitutional rights irrelevant. As Lawrence Lessig again points out:

Cyberspace will change from a place that protects anonymity, free speech, and individual control, to a place that makes anonymity harder, speech less free, and individual control the province of individual experts only.

By obstinately refusing to engage with the factual and technological aspects of the Aadhaar project, and how the architecture of the project nullifies the very Aadhaar Act that it upheld, the Majority has only demonstrated its own ignorance of technology, and has probably accelerated the Supreme Court’s own irrelevance, as Lessig had proclaimed so boldly.

The Aadhaar Judgment and the Constitution – III: On the Money Bill (Guest Post)

October 1, 2018 Gautam Bhatia3 Comments

(In this, the concluding essay in our series analysing the legal foundations of the Aadhaar judgment, Suhrith Parthasarathy examines the issue of the money bill.)

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The Supreme Court’s judgment in the Aadhaar case is troubling at many different levels. As Gautam Bhatia’s post highlights, the majority’s opinion, authored by Justice AK Sikri, on behalf of himself, Chief Justice Dipak Misra and Justice AM Khanwilkar, is riddled with doctrinal inconsistencies and fails to so much as a maintain a sense of internal logic. This makes criticism of the judgment an especially demanding task. Not only are the court’s chosen standards of review questionable, its application of those flawed choices is often equally unsatisfactory. These fallacies are, perhaps, best exemplified by the majority’s approach to the questions concerning the enactment of the Aadhaar Act as a money bill. The court’s decision in this regard is productive of consequences that are likely to have a deep bearing on India’s democracy.

The Background

When the Aadhaar scheme was originally introduced in 2009, the government thought it unnecessary to enact a suitable legislation. In what represented a blatantly illegal move, it thought an executive notification would suffice for the purpose. Eventually, when the draft of a statute was presented in December 2010, to purportedly validate the scheme, it was introduced in the Rajya Sabha as an ordinary bill. This meant that the bill, like most other laws in India, required the assent of both houses of Parliament to turn into law. As it happened, the draft bill was sent to a Parliamentary Standing Committee even before it could secure the Upper House’s clearance. After substantial concerns were raised by the committee, the government, now under a different dispensation, withdrew the bill from consideration in March 2016, and introduced, in its place, a new draft legislation, titled the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Bill, 2016. But this time the draft statute was introduced in the Lok Sabha with an added certificate from the speaker of the House classifying the proposed legislation as a money bill. This meant that all that the bill needed to turn into law was the Lok Sabha’s affirmation, which the bill secured within days of its introduction. And with that, the Aadhaar Act came to be enacted.

A number of the petitions challenging the Aadhaar programme in the Supreme Court explicitly questioned the introduction and enactment of the law as a money bill. The petitioners in these cases argued that the court possessed the power to judicially review the speaker’s decision, and, what’s more, his decision to certify the law as a money bill was patently unconstitutional.

Money Bills and the Constitutional Framework

Now, generally, under India’s Constitution, for a bill to be enacted into law it requires approval by both the Lok Sabha and the Rajya Sabha. The only exception to this rule is contained in Article 110(1), which defines a “money bill” in the following terms:

(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely

(a) the imposition, abolition, remission, alteration or regulation of any tax;

(b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;

(c) the custody of the consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;

(d) the appropriation of moneys out of the consolidated Fund of India;

(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;

(f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or

(g) any matter incidental to any of the matters specified in sub clause (a) to (f). (Emphasis Supplied)

Critically, Article 110(3) adds that in cases where a dispute arises over whether a bill is a money bill or not, the Lok Sabha Speaker’s decision on the issue shall be considered final. It was this provision that the government placed particular emphasis on in its defence. The Union of India argued that the speaker’s decision was altogether immune from judicial review. In any event, according to it, the categorisation made in this case was in conformity with clause 1 of Article 110.

The Majority Approach: Judicial Review

In deciding the case, common logic ought to have dictated that the court considered the question of whether the Aadhaar Act was a validly enacted legislation first. After all, if the court were to find that it had the power to review the speaker’s decision and if it found that the decision made in this case was unconstitutional, the entire legislation would have been rendered null and void, effectively making every other argument advanced in the case moot. Yet, the court chose a different path. For reasons best known to the majority, it chose to frame the question concerning the validity of the Aadhaar Bill’s categorisation as the sixth issue for consideration. Bizarrely, issues that preceded this included questions over whether the Aadhaar Act created a surveillance state, whether the Act violated the right to privacy, and whether children could be brought within the sweep of the programme. Thus, the majority chose to decide what ought to have been a preliminary question only once it gave its imprimatur to the general architecture of the Aadhaar programme. This approach, it must be said, runs counter to the most fundamental principles of judicial decision-making.

Making matters worse, the court’s ultimate approach in deciding the issue was just as illogical. Quite opposed to addressing, at the outset, the government’s objection that the speaker’s certification was beyond judicial review, the court first chose to consider whether the bill, in fact, met the requirements of Article 110(1). Once it did this, and once it found that the bill fell within the categories prescribed in Article 110(1), the court altogether brushed aside the question of whether a speaker’s decision is judicially reviewable or not. Now, it’s difficult to understand whether we can presume from the fact that the court conducted an examination on the provisions of the bill to conclude that it was a money bill that the majority did believe the speaker’s decision to be reviewable. The majority offers no clear and precise answer for this.

But, given that the government’s argument wasn’t entirely meritless, in that it was backed by at least one decision of a 3-judge bench of the Supreme Court, in Mohd. Saeed Siddiqui v. State of UP (2014), in the present post we shall endeavour to consider the issue by first answering the question of whether a speaker’s decision under Article 110 is judicially reviewable or not.

In Siddiqui, the question before the court concerned a categorisation made under Article 199 of the Constitution, which defines a money bill for the purposes of state legislatures. The provision is in pari materia with Article 110, and, as such, any decision made interpreting Article 199 ought to apply directly to Article 110 too. There, the Supreme Court had ruled that a Speaker’s decision to classify a draft statute as a money bill was not judicially reviewable, even if the classification was incorrect, since the speaker’s mistake constituted nothing more than a mere procedural irregularity. The court arrived at its decision, as Justice DY Chandrachud’s dissenting opinion in the Aadhaar case correctly points out, on a misunderstanding of a constitution bench judgment in Mangalore Ganesh Beedi Works vs. State of Mysore (1963).

In Mangalore Ganesh Beedi Works, the court had found that the Indian Coinage (Amendment) Act, which introduced a new system of coinage, was not a taxing measure. The petitioners had argued that through the substitution of 2 naya paisas in place of 3 pies as tax, there was a change in the tax imposed by the Mysore Sales Tax Act, which could only have been done by passing a Money Bill under Articles 198, 199 and 207 of the Constitution. Since no money bill had been introduced, the Act itself, the petitioners argued was illegal and invalid. It was in those circumstances, having found that a substitution of coinage did not result in an enhancement of tax, that the court ruled that Article 199 was simply not attracted. The further observation made by the court that the “the validity of an Act cannot be challenged on the ground that it offends Articles 197 to 199 and the procedure laid down in Article 202” ought to therefore be viewed in light of the ratio decidendi of the judgment.

Yet, in Siddiqui the court proceeded on the grossly mistaken premise that the decision in Mangalore Ganesh Beedi Works was somehow an authority for the proposition that a speaker’s decision to categorise a draft law as a money bill was beyond judicial review. Once again, as Justice Chandrachud’s dissenting opinion in the Aadhaar case points out, there is a consistent thread that emerges from the court’s judgments in (a) In re Special Reference No. of 1964, (b) Ramdas Athawale v. Union of India, and (c) Raja Ram Pal v. Hon’ble Speaker, Lok Sabha, which makes it clear that the validity of proceedings in Parliament or a State Legislature can be subject to the rigours of judicial review on the ground that there is a constitutional violation. Considering the trend of these judgments, and considering the grave consequences that emanate out of a certification of a draft law as a money bill the majority in the Aadhaar case ought to have at the least tested the continuing applicability of the court’s verdict in Siddiqui. For, as Justice Chandrachud writes:

Barring judicial review of the Lok Sabha Speaker’s decision would render a certification of a Bill as a Money Bill immune from scrutiny, even where the Bill does not, objectively speaking, deal only with the provisions set out in Article 110(1).[Paragraph 83]

What’s more, as Justice Chandrachud adds:

The existence of and the role of the Rajya Sabha, as an institution of federal bicameralism in the Indian Parliament, constitutes a part of the basic structure of the Constitution. The decision of the Speaker of the Lok Sabha to certify a Bill as a Money Bill has a direct impact on the role of the Rajya Sabha, since the latter has a limited role in the passing of a Money Bill. A decision of the Speaker of the Lok Sabha to declare an ordinary Bill to be a Money Bill limits the role of the Rajya Sabha. The power of the Speaker cannot be exercised arbitrarily in violation of constitutional norms and values, as it damages the essence of federal bicameralism, which is a part of the basic structure of the Constitution. Judicial review of the Speaker’s decision, on whether a Bill is a Money Bill, is therefore necessary to protect the basic structure of the Constitution. [Paragraph 339(d)]

Interestingly, Justice Bhushan in his separate opinion agrees with Justice Chandrachud that Siddiqui requires explicit overruling. It is unfortunate that despite the length of its opinion the majority has singularly failed to engage with this central point of contention.

The Aadhaar Act as a Money Bill

What the majority does do, though, (and here Justice Bhushan agrees with it) is to hold, erroneously, that the speaker’s certification of the Aadhaar Bill as a money bill was in conformity with Article 110(1).

The government had argued that since Section 7 of the Aadhaar Act, “which was the heart and soul” of the legislation concerned subsidies, benefits and services, for which the expenditure was to be incurred from the Consolidated Fund of India, the requirements of Article 110(1) were met. It was sufficient, according to the government, if a law, in pith and substance, met the tests laid down in Article 110(1). In other words, so long as a draft legislation broadly concerned itself with one of the elements contained in clauses (a) to (f) of Article 110(1), the speaker was well within his rights to categorise the law as a money bill.

To start with, it needs to be noted that the doctrine of “pith and substance” is applied to adjudicate legislative competence, and has no role to play in examining whether or not the requirements of Article 110 are satisfied. But in any event, without expressing any specific opinion on the argument predicated on the doctrine of pith and substance, the majority in the Aadhaar case agrees with the government to the extent that Section 7 conforms to Article 110(1)(e) (“expenditure charged to the consolidated fund”), that all other provisions of the Act are only incidental to Section 7, and, therefore, fall within the meaning of Article 110(1)(g) (“incidental matters”). As Justice Chandrachud points out in his dissenting judgment this is an extraordinarily fallacious ruling. The majority altogether overlooks the fact that for a bill to be certified as a money bill under Article 110 it must contain “only provisions” that deal with every or any one of the matters contained in Article 110(1). Therefore, a bill, which contains a single item beyond the scope of the subjects enlisted in clauses (a) to (g) of Article 110(1) cannot be introduced as a money bill. Here, as Justice Chandrachud’s meticulous reading of each and every provision of the Aadhaar Act shows us there are a host of clauses that deal with items well beyond the scope of clauses (a) to (g) of Article 110(1). He holds:

The substantive provisions of the Act are, however, not confined to the object specified in the Preamble. Indeed, they travel far beyond the boundaries of a money bill under Article 110(1). The enrolment on the basis of demographic and biometric information, generation of Aadhaar number, obtaining consent of individuals before collecting their individual information, creation of a statutory authority to implement and supervise the process, protection of information collected during the process, disclosure of information in certain circumstances, creation of offences and penalties for disclosure or loss of information, and the use of the Aadhaar number for any purpose lie outside the ambit of Article 110. These themes are also not incidental to any of the matters covered by sub-clauses (a) to (f) of Article 110(1). The provisions of Section 57 which allow the use of an Aadhaar number by bodies corporate or private parties for any purpose do not fall within the ambit of Article 110. The legal framework of the Aadhaar Act creates substantive obligations and liabilities which have the capability of impacting on the fundamental rights of residents. [Paragraph 107].

The majority’s finding, such as it were, can be found in paragraphs 408 to 411 of its judgment, where it holds, inter alia, that since Aadhaar-based authentication is mandated by Section 7 of the Act for the receipt of a subsidy, benefit or service, and since such subsidies, benefits and services accrue out of the Consolidated Fund of India, Section 7 has to be seen as the “core provision of the Aadhaar Act and this provision satisfies the conditions of Article 110 of the Constitution.” Having held thus, in paragraph 411, the majority says:

To facilitate this, UIDAI is established as Authority under the Act which performs various functions including that of a regulator needing funds for staff salary and it’s own expenses. Respondents have rights remarked that the Authority is the performer in chief, the predominant dramatis personae. It appoints Registrars, enrollers, REs and ASAs; it lays down device and software specifications, and develops softwares too; it enrols; it de-duplicates; it establishes CIDR and manages it; it authenticates; it inspects; it prosecutes; it imposes disincentives; etc. And all this it does based on funds obtained by appropriations from Consolidated Fund of India (Section 24).

It’s difficult to understand the majority’s precise point here. But if its intent is to suggest that virtually any governmental activity would fulfil the condition laid down in Article 110(e), given that most government functions would be funded out of the Consolidated Fund of India it can only be a ruling that is predicated on a flagrant misunderstanding of the Constitution. The entire idea behind Article 110(e) is that the law must contain “only provisions” that involve “the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure.” In other words, under clause (e), a money bill must deal with the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India.

As Justice Chandrachud, once again, correctly holds, not even Section 7 of the Aadhaar Act fulfils this requirement. As he writes in paragraph 110 of the dissent:

What Section 7 does is to enact a provision allowing for Aadhaar to be made mandatory, in the case of services, benefits or subsidies which are charged to the Consolidated Fund. Section 7 does not declare them to be a charge on the Consolidated Fund. It provides that in the case of services, benefits or subsidies which are already charged to the Consolidated Fund, Aadhaar can be made mandatory to avail of them. Section 7, in other words, is a provision for imposing a requirement of authentication and not declaring any expenditure to be a charge on the Consolidated Fund of India. Hence, even Section 7 is not within the ambit of Article 110(1)(e).

The majority’s troubling holding on the money bill issue doesn’t end here. It also holds that by virtue of it striking down Section 57 of the Act, it was unnecessary for it to consider whether the provision was merely incidental to the other provisions, specifically to Section 7. This finding is yet another instance of the judgment’s incoherence. The Aadhaar Act was enacted as a package. Section 57 was very much a part of the bill which was presented for the Lok Sabha’s consideration. So, if Section 57 wasn’t merely incidental to Section 7 (and it would have involved a huge stretch even of the majority’s logic to hold that it was), the draft legislation simply could not have been categorised as a money bill.

In other words, the majority effectively inverts basic judicial reasoning. Instead of considering the Aadhaar Act as a whole, and testing whether it qualifies as a money bill, the majority first examines provisions of the Act for substantive compliance with the Constitution, strikes down Section 57 as unconstitutional, and then turns around and says, “hey, now that Section 57 is gone, the remainder of the Act is a money bill after all.” As explained above, this is simply absurd.

Conclusion

Ultimately, the court’s ruling here creates a dangerous precedent. Now, virtually any legislation can be pushed through as a money bill, by ensuring that the law contains an “element” of one or the other of the clauses contained in Article 110. If the judgment is allowed to stand on this point its impact could be far-reaching. It will give government a carte blanche to enact all manners of laws by-passing the Rajya Sabha altogether.

The majority’s judgment in the Aadhaar case, therefore, requires immediate overruling. It will be interesting to see when the government next amends the Aadhaar Act (as it’s surely likely to do) if it will introduce the draft amendment as a money bill. Any such effort must serve as an opportunity for the court to reverse the majority’s findings here, and to restore, in Justice Chandrachud’s words, “the delicate balance of bicameralism” which lies at the heart of India’s parliamentary democracy.

Constitutional Law and Philosophy

Issues in Contemporary Constitutional Law, with a Special Focus on India and Kenya

Tag: aadhaar

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