The Bombay High Court held that a bank cannot insist on an Aadhaar card for opening an account after the Supreme Court’s verdict in Puttaswamy, and accordingly awarded ₹50,000 as compensation to the petitioner.
The Division Bench of the Bombay High Court, comprising Justice M.S. Sonak and Justice Jitendra Jain, while adjudicating a writ petition, recently held once the Supreme Court, in Justice K.S. Puttaswamy (Retd.) and Another v. Union of India and Others, REEDLAW 2018 SC 09001, held that Aadhaar could not be mandated for opening a bank account, any continued insistence on Aadhaar thereafter is unjustified, and a bank’s failure to act accordingly—resulting in proven hardship—warrants compensatory relief under Article 226 jurisdiction.
The Bombay High Court adjudicated a writ petition concerning the Respondent-Bank’s refusal to open a bank account in the name of the Petitioner on the ground that an Aadhaar Card was not furnished. The Petitioner, having premises in Mumbai and facing difficulty in renting it due to the lack of a functioning bank account, approached the Bank in January 2018. The Bank insisted on submission of an Aadhaar Card, citing it as a mandatory requirement, despite the existence of interim orders of the Hon’ble Supreme Court in Justice K.S. Puttaswamy (Retd.) and Another v. Union of India and Others, REEDLAW 2018 SC 09001, which had already questioned such compulsion. After repeated representations yielded no result, the Petitioner filed the writ petition in June 2018.
During the pendency of the petition, the coordinate bench of the Court recorded a statement made by the Bank in November 2018 that, following the final judgment of the Supreme Court on 26th September 2018 in the Justice K.S. Puttaswamy (Retd.) and Another v. Union of India and Others, REEDLAW 2018 SC 09001 case, the requirement of Aadhaar had been withdrawn and the Petitioner’s account would be opened without insisting on it. The Court accordingly directed the Petitioner to approach the Bank and allowed the Bank to file a reply only on the issue of damages. The account was eventually opened in January 2019. However, the Bank failed to file any reply on the prayer for compensation despite being granted time.
The Petitioner claimed damages of ₹10 lakhs on account of loss of rental income, asserting that due to the delay in account opening, the property could not be rented. The Court noted that while the Bank’s refusal from January to September 2018 may have had some justification in light of prevailing legal uncertainty, its refusal to act even after the Supreme Court’s final judgment in September 2018 was unjustified. The Petitioner had been deprived of potential rental income for at least three to four months after that date, and no explanation or reply was furnished by the Bank to counter this claim.
Taking into account the unique facts and the humanitarian considerations involving the surviving 84-year-old director and her dependent daughter, the Court refrained from directing the Petitioner to avail alternative remedies and invoked its writ jurisdiction. It held that while the claim of ₹10 lakhs was excessive, the Petitioner was entitled to some compensation for the delay caused after September 2018. Accordingly, the Court directed the Bank to pay ₹50,000 to the Petitioner within eight weeks from the date of service of the order. The writ petition was disposed of with no order as to costs.