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Legal challenges to Aadhaar: Money bill, early enrolments and exclusions

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Much literature on Aadhaar has focused on whether it’s voluntary or mandatory. As a legal matter, this issue is only relevant for the exclusion challenge.

The following months are likely to radically alter the relationship between citizens and the state. The Supreme Court will soon deliver its verdict on Aadhaar. As India readies itself for the verdict, it is worth exploring the specific legal issues involved.

Keeping in mind Aadhaar’s basic framework – its focus on authentication, its seeding with other databases, its federated database and one-way linking – and the Supreme Court’s Puttaswamy decision upholding the right to privacy, let us consider the first legal challenge: categorising the Aadhaar Bill, 2016, as a money bill.

A money bill?

Under the Constitution, bills need the support of both houses of Parliament to become laws. A rare exception is the ‘money bills’ provided for in Articles 109 and 110. Such bills need do not require the approval of the Rajya Sabha.

In the Aadhaar case, the petitioners argued that the bill, with its wide-ranging provisions and applicability to public and private services, could not be considered a money bill. The state’s answer was two-fold. First, it argued that the Lok Sabha Speaker was the final judge of this question as per Article 110(3). This answer, however, seems hard to sustain given the long-held view that courts can engage in some basic form of review to prevent illegality or the colourable exercise of power.

The state’s second response was that the provisions of the bill that do not pertain to the Consolidated Fund of India are merely incidental. But even a bare reading of the bill reveals that such provisions are central to the scheme. The bill hardly seems like a money bill because Article 110 limits the definition to “only” specific cases. A different reading, where all other provisions are seen as “incidental”, would make the point of such a strict definition meaningless. It would result in a situation where all that is required to be a money bill is that some provision pertain to the Consolidated Fund. Any bill could easily satisfy this, thereby calling into question the existence of the Rajya Sabha.

One way to save the law without striking it down entirely might be to sever it. That is, to only allow those provisions addressed toward schemes drawing from the Consolidated Fund. As Arvind Datar argued, the law can either be a money bill or not. It would, thus, either have to fall entirely or exclude provisions such as those involving private actors.

The second challenge

A second challenge involved pre-2016 enrolments undertaken before the Aadhaar Act was passed. The challenge here was straightforward: executive power cannot impact legal rights without statutory force. Here, the state’s answer was that Section 59 of the Act validates pre-2016 enrolments. But the issue is whether Section 59 is valid.

Indian law is considerably tolerant of retroactive legislation (the major exception is criminal law). But the retroactivity that it tolerates is interpretive. For example, in taxation law, where retroactivity has often invited controversy (like in the Vodafone case), retroactive action changes the interpretation of the law. For example, a court may hold that a potato is a vegetable and the executive may later retroactively declare that potatoes are fruits, and therefore subject to different tax liability.

In the Aadhaar case, however, the retroactivity is not in interpreting a legal instrument differently. Rather, it is in imagining a factual scenario which did not exist, namely that pre-2016 enrolments had statutory support. This is a far trickier case to support.

However, the trouble with striking down pre-2016 enrolments is that the Supreme Court blessed such enrolments when they were being undertaken. In an interim order in September 2013, the court refrained from stopping enrolments, instead holding that no person should suffer for not having an Aadhaar card. It reaffirmed this stand in March 2015, and passed an interim order in August 2015 confining Aadhaar to the PDS and LPG schemes. This was judicially expanded in October 2015 to cover various other schemes, but with the clarification that the scheme was voluntary.

The distinction between choice and insistence broke down completely when the court subsequently upheld the mandatory linking of Aadhaar with PAN numbers. It now supported Aadhaar’s usefulness in tackling tax evasion. It will thus be hard for the court, after it allowed the state to frenetically expand enrolments and increase linking, to now strike down pre-2016 enrolments.

The question of exclusion

A third challenge related to exclusions. The claim was that because of the biometric identifiers and infrastructure available, several persons are excluded from the programme. Given that the programme mediates the relationship between citizens and the state, arbitrary exclusion would violate the Article 14 (equal protection) guarantee at two levels: because of exclusions from Aadhaar, and exclusions from the benefits that Aadhaar provides.

The state’s overall answer was that it has increasingly provided exception handling mechanisms for individuals with partial/no biometrics and for locations where enrolment facilities are unavailable.

Legally, the state’s answer does carry merit. The notifications issued do address potential exclusions which could arise, and provide alternatives to limit such exclusions. There may be policy questions regarding exclusions, but the law does not seem to suffer from the vice of arbitrary exclusions.

Much literature on Aadhaar has focused on whether the scheme is voluntary or mandatory. As a legal matter, this issue is only relevant for the exclusion challenge. It has no bearing on other legal issues. Whether the scheme is voluntary or mandatory does not, for example, change whether it is a money bill. Similarly, it also does not change challenges relating to rights, because one cannot voluntary surrender rights (one cannot, say, enter into a contract for slavery) or challenges based on excessive delegation by Parliament (because this challenge is based on whether it is Parliament or the UIDAI that is framing policy, and not on what the policy is).

This is the first piece in a four-part series covering the legal challenge to Aadhaar. The second and third part can be read here and here

Madhav Khosla, co-editor of the Oxford Handbook of the Indian Constitution, is a junior fellow at the Harvard Society of Fellows. His Twitter handle is @M_Khosla. Ananth Padmanabhan is a former fellow at Carnegie India. His Twitter handle is @ananth1148.

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