The majority verdict delivered on Wednesday agreed with the government’s main argument that the Aadhaar Act was passed as as a Money Bill to identify the correct beneficiary and ensure “targeted delivery of subsidies, benefits and services”.
The majority view of Chief Justice Dipak Misra, Justices A K Sikri and A M Khanwilkar also observed that the Act meets the concept of “good governance and constitutional trust”.
The court said that the Union government was “right” in its submission that benefit or service “ought to be understood in the context of targeted delivery to poorer and weaker sections of society”. “The respondents (government of India) are right in their submission that the expression subsidy, benefit or service ought to be understood in the context of targeted delivery to poorer and weaker sections of society. Its connotation ought not to be determined in the abstract. For as an abstraction one can visualise a subsidy being extended by Parliament to the King; by Government to the Corporations or Banks; etc. The nature of subsidy or benefit would not be the same when extended to the poor and downtrodden for producing those conditions without which they cannot live a life with dignity,” Justice Sikri said.
It also agreed with Attorney General of India K K Venugopal’s argument that Section 7 of Aadhaar Act is the “core provision” which satisfies the conditions regarding Money Bill (Article 110) under the Constitution.
“That is the main function behind the Aadhaar Act and for this purpose, enrolment for Aadhaar number is prescribed in Chapter II which covers Sections 3 to 6. Residents are, thus, held entitled to obtain Aadhaar number. We may record here that such an enrolment is of voluntary nature. However, it becomes compulsory for those who seek to receive any subsidy, benefit or service under the welfare scheme of the government expenditure whereof is to be met from the Consolidated Fund of India,” the majority judgment said.
“It follows that authentication under Section 7 would be required as a condition for receipt of a subsidy, benefit or service only when such a subsidy, benefit or service is taken care of by Consolidated Fund of India. Therefore, Section 7 is the core provision of the Aadhaar Act and this provision satisfies the conditions of Article 110 of the Constitution,” it said.
The court, however, did not agree with the amended rule of Prevention of Money Laundering Act (PMLA) that mandated linking Aadhaar to bank accounts.
The court pointed to Additional Solicitor General Tushar Mehta’s arguments that amending the PMLA rule “serves a legitimate State aim” as it was done to curb money laundering and black money and that the rule “was not arbitrary and satisfied proportionality test”. Disagreeing with the argument, the court said, “Nobody would keep black money in the bank account. We accept the possibility of opening an account in an assumed name and keeping black money therein which can be laundered as well. However, the persons doing such an Act, if at all, would be very few. More importantly, those having bank accounts with modest balance and routine transactions can be safely ruled out. Therefore, the provision in the present form does not meet the test of proportionality.”