'Bank Cannot Delay Or Refuse To Open Account Over Demand For Aadhar Card': Bombay High Court Orders ₹50K Compensation

The Bombay High Court has held that a bank could not have insisted on Aadhaar as a mandatory requirement for opening a bank account after the Supreme Court's verdict in Justice K.S. Puttaswamy v. Union of India (2018), and awarded ₹50,000 in compensation to a company whose account was delayed due to the bank persisting on its demand of Aadhar Card.

The Division Bench of Justices M.S. Sonak and Jitendra Jain was hearing a writ petition filed by Microfibers Pvt. Ltd., which had approached the Court in 2018 after Yes Bank Ltd. declined to open a bank account without an Aadhaar card. The petitioner contended that the requirement was unlawful and in violation of interim orders of the Supreme Court that were in effect at the time.

The Court noted that although the petitioner applied for an account in January 2018, the bank refused to open it, citing non-presentation of Aadhaar by the petitioner. After the Supreme Court's judgment on 26 September 2018, which struck down the requirement of Aadhaar for opening bank accounts, the bank agreed that it would open the account without insisting on Aadhaar. Though the account was eventually opened, the same was done by the bank only in January 2019, which resulted in a loss of rent to the petitioner.

The Court observed that from September 2018 to January 2019, there was no justification for the bank to delay the opening of the account.

“The orders prima facie suggest that at the relevant time, Bank accounts were to be opened only if a party could produce proof of having applied for an Aadhaar Card. However, Justice Puttaswamy's case was finally disposed of by the Hon'ble Supreme Court on 26th September 2018. The Hon'ble Supreme Court struck down the requirement of providing an Aadhar Card for opening a Bank account. Therefore, from 26th September 2018 onwards, there was no impediment to the Respondent-Bank opening the Bank account without insisting on the Aadhaar Card,” the Court stated.

Although the petitioner claimed ₹10 lakhs in damages, the Court found the claim exaggerated. However, since the bank did not file any reply on the issue of compensation despite being granted time, and given the peculiar facts, including the age of the surviving 84-year-old director and the non-business nature of the petitioner, the Court awarded ₹50,000 as compensation.

Case Title: Microfibers Pvt. Ltd. v. Yes Bank Ltd. & Ors. [Writ Petition No. 1706 of 2018]

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