Day 14: 6 Mar ’18

Senior Advocate Arvind Datar counsel for petitioners arguing.

  • Arvind Datar to continue the case for the Petitioners.
    • Says that the Court should extend the deadline for linking to avoid a fait accompli.
  • Shyam Divan says that the SC’s interim order also says that the arrangement is to last till the conclusion of the case.
  • Chief Justice of India says they will take a call on that when the Attorney General arrives.
  • Arvind Datar says that his main challenge is on Rule 9 of the PMLA (bank linking).
    • Says that he has a few core propositions.
    • Aadhaar could not have been a money bill.
    • Rule 9 violates Article 14. And in the alternative, if the Aadhaar project is upheld, it can’t go beyond subsidies.
    •  The Aadhaar/PAN judgment should be revisited in light of the privacy judgment.
    • All state action before the Act cannot be saved.
    • There has been a continuous and flagrant violation of this Court’s orders, which should not be condoned.
    • Starts his first argument, which is effectively the challenge to bank linking (PMLA Rule 9).
    • Says that there is a Master Direction, that provides for customer identification procedures.
    • The Master Circular covers all issues with respect to bank accounts. The impugned rules give contradictory directions (Aadhaar linking).
  • Justice Sikri says that the rule will prevail over the directions.
  • Arvind Datar: There is no hierarchy, because the master circular has a statutory flavour. They stand on the same footing.
  • Justice Sikri: That’s right.
  • Arvind Datar says that under the master circular, there exist provisions for due diligence both at the time of opening the account and subsequently. Suspicious transactions are red flagged and investigated.
    • Points out various existing safeguards in the master circular, such as the RBI’s sanction list.
    • Points to the provision of the master circular that does not require multiple proofs of ID. The customer can submit one of six possible IDs. He says that this conflicts with the Rules, which only allows Aadhaar.
  • Justice Chandrachud points out that state cooperative banks may not fall within the Aadhaar requirements, because that’s a state subject.
  • Arvind Datar points to the due diligence requirements under the circular, which specify the kinds of suspicious situations under which monitoring of accounts can be done.
    • Says that the Circular completely covers the field. The Circular says that you can open an account with one of six IDs.
  • Justice Chandrachud says that in looking at the master circular we will need to construe the RBI’s powers. Doesn’t the RBI have to be a party?
  • Arvind Datar says that RBI is already a party.
  • Some argument about which petition the RBI is a party in.
  • Arguments continue.
  • Arvind Datar says that the core question is that if the Master Circular gives you a choice of six IDs, can Aadhaar then be made the only mandatory ID under separate rules.
    • Says that, as an aside, there is no question of using Aadhaar to establish the identity of a company.
    • Reads out the impugned rules.
  • Bench rises for lunch.
  • Chidambaram is slated to argue the money bill point at 2 30 and Datar to continue tomorrow. Cheers.