Madras HC issues notice in plea against mandatory linking of Aadhaar to avail Pension, Provident Fund benefits

Madras HC issues notice in plea against mandatory linking of Aadhaar to avail Pension, Provident Fund benefits

Meera Emmanuel

The Madras High Court has issued notice in a petition challenging the mandatory linkage of Aadhaar to Universal Account Number (UAN) for availing pension and provident fund benefits.

The plea filed by a software engineer Elisha Ebenezer through advocates NS Tanvi and Rahul Unnikrishnan came up today before a Bench of Justices S Manikumar and Subramonium Prasad.

The plea has challenged a notification dated January 4, 2017 as void, defective and unconstitutional for being violative of Articles 14, 21 and 300A of the Constitution of India and further contrary to the principles laid down by the Supreme Court in KS Puttaswamy (Retired) v. Union of India (Aadhaar case).

The petition recounts that the Employment Provident Fund Organization (EPFO) had initially issued a notification mandating the linkage of Employee Provident Fund Accounts and Aadhaar. To begin with, the EPFO had required that Aadhaar be used to provide a “digital life certificate” under the Central Government’s Jeevan Praman Scheme.

To this end, a circular was issued in April 2015 directing that the Aadhaar number of employees should be recorded to ensure the implementation of this scheme for pensioners. An interim order passed in October 2015 by the Supreme Court allowed the EPFO to continue recording the Aadhaar of employees for this purpose.

However, even while the challenge to the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016 was pending, the Ministry of Labour and Employment  issued the January 2017 notification making it mandatory for members of the Employee’s Pension Scheme to furnish their Aadhaar number to even continue their membership.

This was also followed by several consequent EPFO notifications to ensure the linkage of Aadhaar with the Universal Account Number (UAN) of pension members. As per the petition,

Since every person who is a member of the Provident Fund is automatically a member of the Pension Fund, in effect, every employee enrolled with the Provident Fund was required to seed Aadhaar with their UAN.”

The petitioner has now challenged this notification noting,

“...prior to the notification, the usage of Aadhaar was limited to only those members who had begun receiving their pension and who were required to provide Life Certificates every year to continue receiving the pension which they are entitled to.

However, after the notification, all members of the Pension Scheme would have to seed their Aadhaar with their UAN just to continue their membership in the Pension Scheme. It is to be noted that there is no option provided to opt out of the Pension Scheme either in the Act or the Rules.

Therefore, if an employee is to get the benefit of their compulsory membership of the Pension Scheme, they have to link their UAN with their Aadhaar. Additionally, no provision was granted that for those members who did not wish to continue, the 8.33% contribution would be remitted back to the provident fund.”

The petition also points out that the pension fund comprises regular contributions from the employee’s salary. i.e. they are “deferred wages“. Therefore, to deprive pensioners of the amount citing non-linkage of Aadhaar would also entail a violation of the right to property under Article 300A of the Constitution.

“…The present requirement of linking UAN with Aadhaar interferes with my right to operate and deal with my Provident Fund, which has no government contribution. It also prevents me from saving for my old age or access the amounts saved till date in my pension account.”

Notably, the petitioner highlights extracts from the Supreme Court’s Aadhaar judgment, wherein it has been emphasised that Aadhaar linkage can be made mandatory only where the targeted benefit sought to be availed is in the nature of a subsidy or a government welfare scheme, involving the use of funds from the Consolidated Fund of India. In view of the same, the petitioner contends,

“…the I and II Respondent can no longer mandate compulsory linking of Aadhaar with UAN or even Aadhaar based life certificates for the receipt of pension. The Hon’ble Supreme Court has clearly held that for earned benefits, Section 7 of the Aadhaar Act would not apply. Section 7 of the Aadhaar Act is the provision that makes Aadhaar authentication mandatory.”

The petitioner goes on to argue that the such mandatory linkage for pensionary and provident fund benefits is disproportional and manifestly arbitrary.

However, even after the Supreme Court’s Aadhaar judgment, the Unique Identification Authority of India (UIDAI) informed the EPFO that it could continue recording the employees’ Aadhaar details, although no explanation was given justifying the decision, states the petition.

Additionally, it is pointed out that there is no provision for the linkage of Aadhaar to avail pension under the Aadhaar and Other Laws (Amendment) Ordinance, 2019 – recently moved by the government.

The petitioner was constrained to approach the High Court when he was unable to get a new member ID generated after he shifted employment. It is only once the member ID is generated that an employer can make deposits for an employee’s provident and pension funds. On questioning why his new member ID is not being issued, the petitioner was informed by government authorities that it was because he had not linked his Aadhaar and UAN.

In view of these grounds, the petitioner has prayed that the High Court decalare the 2017 notification as unconstitutional and contrary to the principles laid down by the Hon’ble Supreme Court verdict in KS Puttaswamy’s case.

The High Court issued notice in the matter today following an appearance by advocate Rahul Unnikrishnan on behalf of the petitioner.

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