New Delhi, April 5, 2018

The Supreme Court is hearing a batch of petitions challenging the Constitutional validity of the Aadhaar Act.

The Supreme Court today said that it disagrees with the Centre that Aadhaar can help in checking bank frauds. A five-judge Constitution bench headed by CJI Dipak Misra said that Aadhaar ‘can do little to stop bank scams’ and expressed reservation to the Centre’s argument that Aadhaar is panacea for all ills in the system.

The top court noted that Aadhaar is not an effective means to discourage banking scams since there is no doubt about the identity of fraudsters. It said that banks know whom it is giving money to and that it’s the officials who are hand in glove with fraudsters. “Aadhaar can do little to stop it,” the bench also comprising Justice AK Sikri, Justice AM Khanwilkar, Justice DY Chandrachud and Justice Ashok Bhushan said.

Yesterday, the Centre had told the court that Aadhaar has enormous benefits as it has helped in curbing leakages in the system. Attorney General KK Venugopal, arguing on behalf of the Centre, said that by linking Aadhaar with bank accounts, the government has also managed to check the menace of black money and money laundering. The court was also informed that the government’s decision to link Aadhaar with PAN has helped in checking evasion of tax. The AG added that mandatory linking of Aadhaar with SIM card has aided in preventing terrorism and protecting national security.

The Centre has maintained that Aadhaar is a policy decision in the larger interest of the state.The system was put in place after expert inputs and thus scope of judicial scrutiny was limited.

The court’s observation is important because comes close on the heels of over Rs 13,000 crore scam that has rocked the state-run Punjab National Bank (PNB). In last few months, several cases of bank frauds at different banks have also come to notice. The government is facing immense criticism over its failure in stopping scams and making accused face the law.

The Supreme Court is hearing a batch of petitions challenging the Constitutional validity of the Aadhaar Act.

[The Financial Express]