The Supreme Court in the case of Justice K.S. Puttaswamy and Anr. vs.

Union of India
(UOI) and Ors upheld the constitutional validity of the Aadhaar (Targeted Delivery of
Financial and other Subsidies, benefits and services) Act, 2016 (“Aadhaar Act”), its passage
as a Money Bill, and the use of compulsory Aadhaar-based identification for those State
welfare schemes, the expenditure of which was borne out of the Consolidated Fund of India.
Other provisions of the Aadhaar Act which include use of Aadhaar for availing subsidies,
restriction and disclosure was held to be valid by the Supreme court.
Court has allowed the following use of Aadhaar –
 Aadhar Act as a Money Bill
Aadhaar Act has been rightly passed as Money Bill under Article 110 of the Constitution
which aims to deliver State subsidies and benefits, the expenditure of which falls under the
Consolidated Fund of India.
 Collection of Information is not violative of Article 19
demographic and biometric information from a resident for Aadhaar Number pass three-fold
test as laid down in Puttaswamy (supra) case. Collection of data, its storage and use does not
violate fundamental Right of Privacy. The court upheld the Aadhaar Act stating that the Act
“does not create an architecture for pervasive surveillance.”
 Section 7 (Proof of Aadhaar number necessary for receipt of certain subsidies,
benefits and services, etc.)
Section 7 which made Aadhaar mandatory for availing State subsidies, benefits and services
was held to be valid.
Although the court stated that Aadhaar could not be made mandatory by CBSE, NEET, UGC
as they are neither services nor benefits by the State. Also, Aadhaar could not be made
mandatory for children under the Sarva Siksha Scheme, as elementary education is not a state
benefit but an entitlement.
 Section 29 (Restriction on sharing information)
Section 29 was upheld as it ‘sets reasonable restrictions on sharing information’.
Under this section, no core biometric information, collected or created under the Aadhaar
Act, shall be shared with anyone or used for any purpose other than generation of Aadhaar
numbers and authentication under Act.
 Section 33 (Disclosure of information in certain cases)
Section 33 of the Act which prohibited disclosure of Aadhaar information except by order of
a court was held to be constitutional.
 Aadhaar - PAN Linking
The court upheld that Aadhaar-PAN linking to be valid as it satisfies the three-fold
Puttaswamy test.
Section 139AA of Income Tax Act
Section 139AA of the Income Tax Act, 1961 was also upheld which provides for mandatory
quoting of Aadhaar/Enrolment ID of Aadhaar application form, for filing of Income Tax
Return (ITR) and for making an application for allotment of Permanent Account Number
(PAN).
 Parental Consent in cases of Child Enrolment for Aadhaar
Court held that parent’s consent is essential for enrolling a child into the Aadhaar scheme. It
specified that a child upon attaining adulthood, may choose to opt-out of the scheme.
Parental consent for providing biometric information Under Regulation 3 & demographic
information Under Regulation 4 has to be read for enrolment of children between 5 to 18
years to uphold the constitutionality of Regulations 3 & 4 of Aadhaar (Enrolment and
Update) Regulations, 2016.

The use which are not allowed –

 Section 57 (Act not to prevent use of Aadhaar number for other purposes under
law)
Section 57 which permitted use of Aadhaar by the State or any body corporate or person, in
pursuant to any contract was held to be unconstitutional and void.
 Aadhaar – Bank/SIM Linking
Court struck down Bank and SIM linking as compulsory linking does not meet the
proportionality test and it does not have legislative backing.
 Retention of Aadhaar information
Regulation 27 of Aadhaar (Authentication Regulations) 2016, which allowed retention of
data for 5 years, struck down. The court said that retention of data beyond six months is
impermissible.