Landmark Judegement

landmark judgement

You don't have to anymore link your Aadhaar number with your mobile phone number or bank account number.

HIGHLIGHTS

  • 5-judge bench in SC deems PMLA Rule about bank accounts unconstitutional
  • Judges strike down DoT directive that sought phone number-mobile linking
  • Banks, phone companies can't insist on Aadhaar number

A five-judge bench of Supreme Court on Wednesday ruled that government provisions asking people to link mobile numbers and bank accounts to Aadhaar number are unconstitutional. The bench said that the Prevention of Money Laundering Act (PMLA) Rules as well as the notification issued by Department of Telecommunications (DoT) in this regard were unconstitutional and hence need not be followed.

In other words, this means that you don't have to anymore link your Aadhaar number with your mobile phone number or bank account number. It also means that banks and mobile phone companies can't anymore insist on Aadhaar number to verify your details while giving you a new connection or a new bank account.

The overall verdict of the court was to uphold the legality of Aadhaar. The court said that Aadhaar is valid and is constitutional, although many of its provisions have problems. A lot of these have been struck down. One that is particularly important is the Section 57, which allowed private companies -- for example like courier companies or Paytm etc -- to use Aadhaar as a tool for authentication. This too has been struck down with the court saying that private companies cannot use Aadhaar number for any verification purposes.

For little over a year now, there is a debate raging about the linking of mobile phone numbers and bank accounts to Aadhaar number. Even after the Supreme Court earlier said in its interim order that Aadhaar couldn't be mandatory for bank accounts and mobile numbers, the companies continued to demand it from their customers. Now, with the final order from the Supreme Court calling the linking illegal they will have to stop it.

At the same time, do note that the Supreme Court has upheld the linking of Aadhaar with Income Tax records as well as with the PAN card. So in a way, your bank account will be linked to Aadhaar but there won't be any daily harassment from the banks about it.

The government in 2017 had come out with directives that told banks and mobile phone companies to seek Aadhaar number from their customers. The finance ministry had amended the PMLA Rules, which aim to curb money laundering, to make Aadhaar mandatory for new and existing bank accounts. The DoT, meanwhile, had ordered a re-verfication of all mobile phone numbers in the country through Aadhaar number, saying that this was needed because of the national security concerns.

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