India: The Supreme Court's Aadhaar Judgement And The Right To Privacy


At the end of September, the Supreme Court of India, in Justice Puttaswamy (Retd.) and Anr. v Union of India and Ors.,1 upheld the overall validity of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (the "Aadhaar Act").

The Aadhaar Act was held to be constitutional to the extent it allowed for Aadhaar number-based authentication for establishing the identity of an individual for receipt of a subsidy, benefit or service given by the Central or State Government funded from the Consolidated Fund of India.

However, the Supreme Court disallowed the use of individual Aadhaar numbers by any private entities for establishing the identity of the individual concerned for any purpose pursuant to a contract, on the basis that it was contrary to the fundamental right to privacy. The Supreme Court also ruled on a number of laws, circulars and directions, which required the mandatory linking of Aadhaar for receiving relevant services.

This alert analyses the tests adopted by the Supreme Court, specifically in relation to the right to privacy of an individual, in arriving at the conclusions mentioned above. Further, it briefly discusses the orders passed regarding existing requirements for the mandatory linking of Aadhaar numbers. Finally, the alert analyses the data protection principles recognized by the Supreme Court in this judgement, in light of the Personal Data Protection Bill, 2018 (the "Bill").


2.1 Right to Privacy

The Aadhaar Act entitles resident individuals to obtain an Aadhaar number by submitting certain biometric information and demographic information as part of the enrolment process. Subsequently, each time the identity of the individual is required to be verified by the Government or private entities, the Aadhaar number and biometric information, in some cases, was requested as part of the individual identification process, for authentication. As part of the authentication process, certain transaction details are recorded at a central database, arguably creating the framework for a surveillance state.

The Supreme Court was primarily required to assess if the provisions of the Aadhaar Act were contrary to the right to privacy, which has been established as a fundamental right by the Supreme Court in 2017. In this regard, it is relevant to note that a number of services provided by both private entities and Government, was contingent on an individual linking their Aadhaar number for authentication, which indirectly made it mandatory for most individuals to obtain an Aadhaar number. Therefore, the question was not so much whether this was an infringement on the right to privacy, but whether it was a reasonable exception to it.

The Supreme Court held that the right to privacy cannot be impinged without a just, fair and reasonable law. This required existence of a law, which serves a legitimate state aim and is proportionate to the objective sought to be achieved. The Supreme Court further clarified that the proportionality test includes the following four aspects

  1. Legitimate goal
    The measure restricting the right must have a legitimate goal.
  2. Rational connection
    It must be a suitable means of furthering the goal.
  3. Necessity
    There must not be any less but equally effective alternative.
  4. Balancing
    The measure must not have a disproportionate impact on the right holder.

The Supreme Court struck or read down certain portions of the Aadhaar Act, which did not fulfill the above proportionality test. However, aside from these provisions, the Supreme Court held that the Aadhaar Act, on the whole, as a law, serves a legitimate state aim and is proportionate, thereby being a reasonable exception to the right to privacy.

Section 7 of the Aadhaar Act, making the Aadhaar number mandatory for receiving subsidies, benefits and services from the Government (for which expenditure was drawn from Consolidated Fund of India) was therefore held to be valid.

However, the most relevant provision which was read down by the Court was Section 57 of the Aadhaar Act. This provision allowed Government entities, body corporates and individuals to use the Aadhaar number for establishing the identity of an individual for any purpose, pursuant to any law or contract.

Firstly, the Supreme Court held that the phrase 'any purpose' is not proportionate, too wide and susceptible to misuse. The Supreme Court laid down that the purpose has to be 'backed by law'.

Secondly, the possibility of collecting and using Aadhaar numbers for authentication pursuant to a contract was disallowed since this may result in individuals being forced to give their consent in the form of a contract for an unjustified purpose. The Supreme Court laid down that the contract has to be 'backed by law'.

Thirdly, private entities are not permitted to use Aadhaar numbers for the purpose of authentication, on the basis of a contract with the concerned individual, since it would enable commercial exploitation of an individual's biometric and demographic information by private entities. This effectively prevents companies from using Aadhaar based e-KYC authentication of an individual's identity, which was primarily the way in which many companies complied with the relevant know your customer (KYC) requirements.

2.2 Consequential orders

The Supreme Court was also tasked with deciding the validity of certain directions from different departments of the Government (brought in through laws or otherwise), which mandated the linking of Aadhaar numbers to benefit from certain services. This was specifically analyzed in the context of the linking of Aadhaar numbers to Permanent Account Numbers (PAN) (relevant for income tax filings), bank accounts and mobile phone numbers. The Supreme Court noted the following.

  1. The requirement to mandatorily link Aadhaar numbers to PAN was held to be valid, since it was based on a law, serving a legitimate state interest and was proportionate.
  2. The requirement to mandatorily link Aadhaar numbers to bank account numbers was held not to be valid since it did not meet the proportionality test.
  3. The requirement to mandatorily link Aadhaar numbers to mobile numbers was held not to be valid since it did not serve a legitimate state aim and was disproportionate in its encroachment on individual liberties.

2.3 Data Protection Principles

The Supreme Court categorically recognized certain data protection principles such as data minimization (restricting collection of data to data necessary for stated objects or purpose), purpose limitation (limiting the scope of purpose and using the data only for such purpose), data retention (retaining the data only for a limited period necessary for the purpose) and data security as relevant factors in determining whether the provisions of particular legislation, including the Aadhaar Act, was in conformance with an individual's right to privacy.

While the Supreme Court discussed various data privacy principles from the United States and European Union jurisdictions, it did not specify which of those principles should be adopted in the Indian context. The Supreme Court also recognized and discussed a number of provisions from the Bill, again without much clarity on which of those principles should be imported into judicial reasoning.


The most significant and immediate implication of the judgement is for those private companies or body corporates, which are reliant on Aadhaar based customer authentication mechanisms. This is specifically an issue in the context of companies in the fin-tech space that are required by sectoral regulators, such as the Reserve Bank of India, to undertake KYC compliance.

Aadhaar-based e-KYC, under the Aadhaar Act, was seen as a means to accomplish the KYC compliance in an efficient paperless manner. It is now expected that the Government or sectoral regulators will bring in alternate mechanisms, which will need to be equally effective in identification of individuals.

In this context, it should be noted that the Employee Provident Fund ("EPF") Organization had issued a circular, which required employers to link the Aadhaar numbers of all eligible employees to their respective EPF account. Given that the Supreme Court has held Section 57 of the Aadhaar Act unconstitutional, employers are no longer permitted to collect the Aadhaar numbers of employees for the purpose of linking it to their EPF accounts. Any failure by employers to comply with the Supreme Court ruling will result in employers being in contempt of court.

Finally, the judgment also discussed the Bill, which was noted as including many of the progressive data protection principles inspired by the European Union General Data Protection Regulations (the "EU GDPR").

Even though the Supreme Court recognized that there may be scope for further fine tuning of the Bill, it was observed that we are not far away from a comprehensive data protection regime, which entrenches informational and data privacy.

These observations, coupled with the extensive discussion on jurisprudence from the European Union suggests that the courts in India are likely to rely heavily on the principles adopted in EU GDPR in future cases, though there is a lack of clarity on the specific principles that would be imported.


1. Justice Puttaswamy (Retd.) and Anr. v Union of India and Ors., available at ( .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions