The Supreme Court’s Constitution Bench grilled the government’s lawyers on Aadhaar’s potential to prevent bank fraud, reports The Economic Times. During the ongoing hearings to determine the Constitutional validity of Aadhaar, the Bench countered the government’s claim that linking the unique identification number with bank accounts had helped curb black money and money laundering. The five-judge Bench headed by the Chief Justice of India further observed “The bank knows whom it is giving loan to and it is the bank officials who are hand in glove with the fraudster. Aadhaar can do little to stop it.”
Linking Aadhaar to bank accounts was mandated by the government by amending Rule 9, first notified in 2005 as (Maintenance of Records) Rules, of the Prevention of Money Laundering Act, 2002 to include furnishing Aadhaar along with PAN or Form 60 for opening new bank accounts or for financial transactions in excess of INR 50,000. Separately, linking of Aadhaar to PAN was mandated by the Finance Act, 2017, which added Section 139AA to the Income Tax Act, 1961.
However, in the Aadhaar hearings, Senior Advocate Arvind Datar argued that Rule 9 violates Article 14 of the Constitution (which guarantees the Right to Equality before the State, and Right against Discrimination). Section 139AA was partially upheld by the Supreme Court in Binoy Viswam in 2017, but per the in-court discussion between Mr. Datar and Justice A.K. Sikri (who was also one of the judges in the Binoy Viswam case), that judgment will have to be reconsidered.