Naresh Kumar R.P. Vs State Of Karnataka (Karnataka High Court)
Conclusion: High Court had refused to quash a FIR registered against a 47 years old entrepreneur, allegedly involved in illegally selling aadhaar cards as issuance of Aadhaar cards by agencies who were not empowered could also lead to the distribution of cards to neighboring countries which was against the interest of national security. It was prudent for the Government of India or the State Government to have a vigil on such instances of rising cases of frauds in Aadhaar enrollment.
Held: Assessee was Chief Executive Officer of a company dealing with e-governance, skill development, finance, education consultancy, manpower consultancy, higher education and institutions and claimed to have expertise in Aadhaar enrolment. Assessee entered into a service provider agreement on 1 st April 2015 with ‘Utility’ for providing services mentioned in the contract. A FIR came to be registered against assessee for sub-letting the process of enrolment. It was the prosecution’s case that in terms of the scheme for empanelment of enrolment of agency what was permitted to the enrolment agency was to enter into an agreement with assessee and the like, only for securing manpower and not to sublet the job of issuance of Aadhaar card. The action of enrolment agency in entering into a sub-contract with assessee had led to grave threat to national security as Aadhaar cards were recklessly issued to many who were also from neighboring countries. Such instance had emerged by the acts of the agencies like the assessee. Therefore, it was for assessee to come out clean in the trial as the investigation itself was not yet commenced in the case on hand. It was held that what was permitted under the Scheme was the manpower such as enrolment operator and supervisor could be hired by the third parties by the enrolment agency. What enrolment agency (Utility Forms Private Limited) did was to the contrary, sub-contract was entered into with assessee for functions beyond what was statutorily permitted and the scheme contemplated. Therefore, it was a matter of trial that assessee should come out clean on the justification of the afore- extracted notice that was issued and the collection of money that he had made under 5 options of selling the Aadhaar kit to be sold ranging from 40,000 onwards to 1,85,000 and every Aadhaar card that was being issued by Namma Kendra, a particular fee ranging from Rs.100/- to Rs.200/- was collected. The court also considered the Office Memorandum, issued by the Government of India, drawing attention towards comprehensive guidelines issued by UIDAI, in the wake of rising cases of charging money for Aadhaar enrolment and zero tolerance should be taken by the Government. Therefore, with the facts being so glaring and the offence alleged against assessee having such ramification, as issuance of Aadhaar cards by such agencies who were not empowered could also lead to the distribution of such cards against the interest of national security. It was prudent for the Government of India or the State Government to have a vigil on such instances of rising cases of frauds in Aadhaar enrollment.
FULL TEXT OF THE JUDGMENT/ORDER of KARNATAKA HIGH COURT
The petitioner is before this Court seeking to quash the proceedings in FIR No.88/2017 registered on 6-04-2017 for offences punishable under Sections 465, 468, 469, 471, 420 120-B read with Section 34 of the IPC.
2. Brief facts leading to the filing of the present petition are as follows:
The petitioner is Chief Executive Officer of M/s Edurays India which is a company dealing with e-governance, skill development, finance, education consultancy, manpower consultancy, higher education and institutions and claims to have expertise in Aadhaar enrolment. The petitioner enters into a service provider agreement on 1st April 2015 with Utility Forms Private Limited, Mumbai (hereinafter referred to as ‘Utility’ for short) for providing services mentioned in the contract. On 30th March 2016, the contract between the petitioner and the Utility was extended for a further period of two years.
3. It is the claim of the petitioner that the 2nd respondent – Deputy Director, Unique Identification Authority of India (hereinafter referred to as the ‘UIDAI’ for short) in the Ministry of Electronics and Information Technology had addressed a permission letter for on boarding Utility as enrolment agency for UIDAI, particularly for the purpose of carrying out enrolments for Aadhaar in Karnataka. In terms of the agreement entered into between Utility and the petitioner, it is the claim of the petitioner that he was providing manpower resources to Utility such as enrolment operators and supervisors. Certain guidelines are laid down by the Circulars issued as to how UIDAI and the persons who have entered into the contract with UIDAI should function.
4. Things standing thus, on 6-04-2017 an FIR came to be registered on information dated 6-04-2016 for the various offences mentioned (supra). Accused No.1 is the petitioner. Accused No.2 is the one who entered into agreement with UIDAI and accused No.3 is the representative of Utility. The moment FIR is registered, the petitioner is before this Court calling in question the registration of FIR.
5. Heard Sri Murthy.D.Naik, learned counsel appearing for petitioner, Smt.Namitha Mahesh B.G, learned High Court Government Pleader appearing for respondent No.1 and Sri H.Shanthi Bhushan, learned Assistant Solicitor General of India appearing for respondent No.2.
6. The learned counsel appearing for the petitioner contends that the petitioner functions strictly in terms of what was agreed between the Utility and himself. He would contend that there is no substance in the allegations made particularly for the offence punishable under Section 420 of IPC and would further contend that the kits which have been alleged to have been supplied for free were never supplied for free and would submit that the entire proceedings initiated against the petitioner is opposed to process of law.
7. On the other hand, Sri.H.Shanthi Bhushan, learned Assistant Solicitor General would vehemently refute the submissions of the learned counsel for the petitioner and submit that there is no substance in the contention. The allegation against the petitioner is not only of cheating under Section 420 of IPC but also under Sections 465, 468, 469, 471 and 120B of IPC. In terms of the scheme for empanelment of enrolment of agency what was permitted to the enrolment agency was to enter into an agreement with the petitioner and the like, only for securing manpower and not to sublet the job of issuance of Aadhaar card.
8. The action of enrolment agency in entering into a sub-contract with the petitioner has led to grave threat to national security as Aadhaar cards are recklessly issued to many who are also from neighboring countries. Such instance have emerged by the acts of the agencies like the petitioner. Therefore, the learned counsel would contend that it is for the petitioner to come out clean in the trial as the investigation itself is not yet commenced in the case on hand.
9. Learned High Court Government Pleader Smt. Namitha Mahesh B.G., appearing for the State, would also refute the submissions with equal vehemence and brings to light the illegal activities of the petitioner and contends that it is a matter of trial, as investigation is yet to commence in the case.
10. I have given my anxious consideration to the submission made by the respective learned counsel for the parties and perused the material on record.
11. Before embarking upon the journey of consideration of the issue in the lis, I deem it appropriate to notice certain statutory provisions under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
“2. Definitions.—In this Act, unless the context otherwise requires,—
(e) “Authority” means the Unique Identification Authority of India established under sub-section
(1) of Section 11;
(g) “biometric information” means photograph, finger print, Iris scan, or such other biological attributes of an individual as may be specified by regulations;
(k) “demographic information” includes information relating to the name, date of birth, address and other relevant information of an individual, as may be specified by regulations for the purpose of issuing an Aadhaar number, but shall not include race, religion, caste, tribe, ethnicity, language, records of entitlement, income or medical history;
(l) “enrolling agency” means an agency appointed by the Authority or a Registrar, as the case may be, for collecting demographic and biometric information of individuals under this Act;
(m) “enrolment” means the process, as may be specified by regulations, to collect demographic and biometric information from individuals by the enrolling agencies for the purpose of issuing Aadhaar numbers to such individuals under this Act;
(q) “prescribed” means prescribed by rules made by the Central Government under this Act;
Section 2(e) defines Authority to mean the Unique Identification Authority of India. Section 2(g) defines biometric information to be a photograph, a fingerprint, iris scan or such other biological attributes of an individual. Section 2(k) defines demographic information to be the date of birth, address and other relevant material of an individual. Enrolling Agency is defined under Section 2(l) to be the authority or a Registrar as the case would be, for collecting what is obtaining in Sub-section (g) and (k) of Section 2, biometric and demographic information. Enrolment is defined under Section 2(m) to be a process for collection of what is obtaining in Sections 2(g) and 2(k) for the purpose of issuance of Aadhaar numbers to individuals. Section 2(q) deals with prescription and would be as prescribed under the Rules made by the Central Government.
“23. Powers and functions of Authority. –
(1) The Authority shall develop the policy, procedure and systems for issuing Aadhaar numbers to individuals and perform authentication thereof under this Act.
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3) The Authority may,—
(a) enter into Memorandum of Understanding or agreement, as the case may be, with the Central Government or State Governments or Union territories or other agencies for the purpose of performing any of the functions in relation to collecting, storing, securing or processing of information or delivery of Aadhaar numbers to individuals or performing authentication;
(b) by notification, appoint such number of Registrars, engage and authorise such agencies to collect, store, secure, process information or do authentication or perform such other functions in relation thereto, as may be necessary for the purposes of this Act.
(4) The Authority may engage such consultants, advisors and other persons as may be required for efficient discharge of its functions under this Act on such allowances or remuneration and terms and conditions as may be specified by contract.”
39. Penalty for tampering with data in Central Identities Data Repository. – Whoever, not being authorised by the Authority, uses or tampers with the data in the Central Identities Data Repository or in any removable storage medium with the intent of modifying information relating to Aadhaar number holder or discovering any information thereof, shall be punishable with imprisonment for a term which may extend to ten years and shall also be liable to a fine which may extend to ten thousand rupees.
40. Penalty for unauthorized use by requesting entity or offline verification seeking entity. – Whoever,-
(a) being a requesting entity, uses the identity information of an individual in contravention of sub-section (2) of section 8, or
(b) being an offline verification – seeking entity, information of an individual in contravention of sub- section (2) of Section 8-A shall be punishable with imprisonment which may extend to three years or with a fine which may extend to ten thousand rupees or, in the case of a company, with a fine which may extend to one lakh rupees or with both.”
Section 23 of the Act deals with powers and functions of the Authority and the Authority is empowered to develop the policy, procedure and systems for issuing Aadhaar numbers. Sub- Section (3) of Section 23 of the Act, permits the Authority to enter into memorandum of understanding or agreement in furtherance of functions of delivery of Aadhaar numbers.
12. The Government has notified regulations namely, Aadhaar (Enrolment and Update) Regulations, 2016. Chapter V deals with appointment of Registrars, Enrolling agencies and other service providers. Regulation 21 deals with appointment of Registrars. 21(7) mandates that the Registrars shall not permit subcontracting of enrolment functions by enrolling agencies to third parties. The Registrars are only permitted field level man power to be hired through third parties, provided the Enrolling agencies would furnish all details. Section 21(7), (8) and (9) read as follows:
“21. Appointment of Registrars. – (1) Registrars shall be appointed by the Authority, through MOUs or agreements, [or terms of appointment/engagement] for enrolment and update of residents across the country, and could include entities which interact with residents in the usual course of implementation of their programmes. The eligible entities for appointment as registrars are State/ UT Governments, Central ministries and departments / agencies under them, Public Sector companies of Central / State Governments, [Scheduled banks] and regulated entities including National Securities Depository Limited, UTI Infrastructure Technology and Services Ltd, Special Purpose Vehicles (SPV) created by Central or State Government including CSC e-Governance services India Ltd. Upon appointment, a Registrar code shall be assigned to each Registrar.
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(7) Registrars shall not permit subcontracting of enrolment functions by enrolling agencies to third parties. Registrars may permit field level manpower to be hired through third parties provided the enrolling agencies furnishes details of the entities from which such manpower is sought to be hired.
(8) Registrars shall at all times abide by the Code of Conduct as specified in Schedule V of these regulations.
(9) Registrars shall adhere to the processes, policies and guidelines, checklists, forms and templates issued by the Authority from time to time and shall also ensure compliance by the enrolling agencies of such procedures, etc.”
In furtherance of the aforesaid Act and the Regulations, the Government of India introduced a Scheme for empanelment of enrolment agencies and in furtherance of undertaking demographic and biometric data collection for UID enrolment. The scheme was notified by the Unique Identification Authority (UIDAI). Applications were called from eligible and interested candidates for empanelment. For this purpose, one Utility Forms Private Limited was empanelled as an enrolment agency in terms of the Scheme. The enrolment agency for the purpose for which it is empanelled was entitled to procure field level manpower. The scheme for empanelment of enrolment agencies reads as follows:
“Though this scheme, UIDAI intends to empanel a mix of organizations to enroll residents from the entire spectrum of the Indian population and to ensure that the enrolment activities are rolled out in the remotest villages of India and to the marginalized section of society. This RFE invites applications from organizations for empanelment to undertake enrolment work.
The RFE is open to all eligible organizations (including Govt./Semi-Govt/Private/NGOs/Not-Profit/Microfinance Institutions), which are (1) registered and operating in India for the last three years and (ii) having an average annual turnover/grants-in-aid of at least INR 50 lac in case of NGOs/Not-for-Profit OR a Net Worth of at least INR 50 lac in case of Commercial Organizations/ PSUs/Govt. companies/Autonomous bodies, in each of the last three (3) financial years (2013-14, 2014-15 and 2015-16).
Sub-Contracting of Enrolment Work is not allowed for private/commercial Organizations/PSUs/Govt. Companies/Autonomous bodies. However, field level manpower such as enrolment operators and supervisors can be hired through third parties. E.As will be required to provide details of the companies from which they are going to hire this manpower to their Registrars before commencing enrolment operations. Government Organizations may choose to franchise enrolment work to CSCs/Local Government bodies.”
(Emphasis added)
In terms of what was permitted under the Scheme was the manpower such as enrolment operator and supervisor could be hired by the third parties by the enrolment agency. What enrolment agency did was to the contrary, sub-contract was entered into with the petitioner for functions beyond what was statutorily permitted and the scheme contemplated.
13. Utility Forms Private Limited was the one that was empanelled as the enrolment agency. Utility Forms enters into an agreement with the petitioner. The petitioner after entering into an agreement opens up ‘Namma Kendra’ for the purpose of enrolment of Aadhaar and issues a notice of option titled as ‘Namma Kendra’ options. The options notified on 01.10.2016, by the petitioner reads as follows:
