The Aadhar Card: New Companies Act Filing requirements and Data Security issues in India.

Aadhaar to become compulsory for regulatory filings under the Companies Act    


In a significant development to Indian Company Law compliance, the Corporate Affairs Ministry has asked

individual stakeholders, including DIN (Director Identification Number) holders/ Directors/ Key Managerial Personnel to obtain Aadhaar at the earliest for integration of their details with MCA21, the portal through which filings required under the Companies Act are submitted to the Ministry.  The New Indian Express reported that this would help determine the authenticity of individuals and the 8-9 lakh registered companies which did not file annual returns.

Recently, the Government of India, introduced an amendment to the Income Tax Act, making it mandatory for individuals to quote Aadhaar / Enrolment ID of Aadhaar application form, for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1 July 2017.

Does it affect Non-Resident Indian (NRI) and Foreign Directors? 

According  Aadhaar Act 2016, only a resident individual is entitled to obtain Aadhaar and therefore Non-Resident Indians (NRI) are not required to obtain Aadhaar cards as they are not eligible under Section 3(1) of the Act. The Gulf News reported that CEO of Unique Identification Authority of India (UIDAI), Dr. Pandey had clarified that the relevant government departments are responsible for providing exemption to the NRIs on Aadhaar requirement.



Indian citizens’ data and digital security

With 1.2 billion Aadhaar card holders, Aadhaar has become one of the largest biometric identification projects in the world. However, concerns have been raised over violation of privacy, identity theft and the possibility of intrusive Government surveillance of residents.

Expansion of services and schemes linked with Aadhaar, raises the possibility of misuse of the Aadhaar information and, at the same time, law limits the scope of the victim to file a complaint and an investigation is possible only on Unique Identification Authority of India (UIDAI) order. The Aadhaar Scheme has 582 banks, brokerages and government departments listed as registered users with access to the data of Aadhaar and no privacy laws protect Indians against the publication of such confidential data.The Economic Times reported, that a government department in April 2017, uploaded the details of a welfare scheme disbursement on the internet, in compliance with transparency norms set by the Right to Information Act, 2005 and citizen’s privacy concerns took a backseat. With increased digitization, citizens are exposed to a greater risk of data theft and it goes beyond the issue of Aadhaar.

A study published by Bengaluru-based Centre for Internet and Society (CIS) on May 1 found that data of over 130 million Aadhaar card holders has been leaked from four government portals. Unaccountability due to lack of Indian laws which provide a stringent data privacy and data protection laws to maintain confidentiality, security and  integrity of data as well as strict laws to punish offenders are glaring loopholes in the existing system.   Following Demonetization, the digital footprint has increased and private sector has increased its spending on security and data protection measures, which has not been the case for government agencies. 

Recently, the Times of India reported that the UIDAI CEO had said, “To say that Aadhaar has been breached, privacy is endangered is incorrect, misleading and even irresponsible,” while arguing that the display of Aadhaar-linked information on websites of government agencies had not led to leakage of biometric information.

According to a 2012 report by the Standing Committee on Finance on this issue, the Government of United Kingdom had repealed its Identity Cards Act, 2006 in 2010, which was very similar to Aadhaar, citing a range of reasons, including high cost, unsafe, untested and unreliable technology, and the changing relationship between the state and the citizen, etc. However in India, there are no signs of any move against Aadhaar these critical issues remain unaddressed. 


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Weekly Indian Law & Legal Sector Updates 29th April 2017

Our weekly round up on Indian legal developments and the law.


Poor English results in SC setting aside Himachal HC order

Indian lawyers updates

The Tribune reported that an order of Himachal Pradesh High Court was set aside by the Indian Supreme Court as it was incomprehensible. The order of the High Court was remanded back to it for re-drafting. The message to Indian lawyers and the judiciary: keep it simple. 

Read the full article on The Tribune



The right to privacy & Aadhar Card issue needs to be settled by court: Attorney-General

Livemint reported that India’s Attorney General’s (A-G) comments on the legal issues of Aadhaar card. The A-G addressed the importance of Aadhaar in  social welfare schemes, the right to privacy, the criticism of Aadhaar and collection of biometrics and  the role of the Unique Identification Authority of India.

Read more about the interview   on Livemint



Indian Goods & Service Tax reform “an act of courage”: IMF chief

India Today reports that the IMF Chief Christine Lagarde appreciated the Indian Government’s GST reform aimed at the creation of a uniform market by substituting the local levies with a federal tax regime. The political will of the present government in bringing the Indian bankruptcy law and demonetization was also acknowledged.

Full Article on India Today



Corporate Affairs Ministry amends Indian Companies Act and adds new rules

Indian Corporate and Company law sees a major shift with the newly notified Section 234 of The Companies Act 2013. This widens the scope and ambit of mergers between Indian and Foreign companies. The Business World reported the change in law and its implications on the Indian Companies and the Corporate sector.

Find the Notification on  and the Amendment to the rules on

Read about the impact on Business World

and in  The Economic Times



WhatsApp Privacy Policy: Govt states to SC its Working on a Data Protection policy. 

Bloomberg Quint reported that the Attorney General of India (A-G) requested the Supreme Court to postpone the hearing of the Whatsapp privacy policy matter as the Telecom Regulatory Authority of India (TRAI) is of formulating a comprehensive data protection framework, which will be finalised in a few months and could potentially affect the case.

Read a brief history of the matter on Bloomberg Quint



Trump order a future challenge for Indian immigration in the IT Sector 

The latest executive order of the US Government concerning immigration and the H-1B visa to further the ‘Hire American’ Policy and its impact on Indian IT firms’ hiring scheme in future. The Times of India report focuses on the immediate effect of the order and the profitability of the industry.

Full article on The Times of India



Indian Arbitration: CJI advocates ” zero govt. role”  in arbitration process

The Hindu reported Justice J.S. Khehar, the Chief Justice of India (CJI), who delivered a speech at the inaugural ceremony of the Engaging Asia Arbitration Summit. The CJI spoke on the increasing potential of India in International Commercial Arbitration in the continent and the promotion of Alternative Dispute Resolution (ADR) methods by the government and the judiciary.

Find the full article on The Hindu on this link:



India and the European Union continue talks and trade 

The Hindu reported the visit of Federica Mogherini, High Representative of the European Union to India. It reported that this will boost ties between India and EU which were impacted by the on going Italian Marines issue.  It also reported a possible relaunch of ‘Joint working groups’ in the sector of Science & Technology and Defence.

To



Mondelez India bribery case may see top guns face off in the US

The Economic Times reported that a team from the US Department of Justice may visit Mondelez India to investigate the 7-year-old bribery and corruption case against Mondelez Inc under the USForeign Corrupt Practices Act regime, against each other, since one of them left the department and has been hired by Mondelez to fight the case.
Read the details of the case on The Economic Times



Eight women’s panels seek stringent law on sham marriages by NRI’s

WebIndia123 reported that Women Commissions from 8 States of the country got together and insisted on a stricter law on the issue of sham marriages by Non Resident Indian bridegrooms at a national seminar organised jointly by the Punjab State Commission for Women and the National Commission for Women.

Find the full article on Webindia123



Outsourcing Woes: Indian IT firms facing more US lawsuits with changing business environment

There is a worrying trend in  lawsuits against Indian IT firms over alleged breaches of contract and delayed service delivery in the outsourcing and IT sectors.  This report by the Business Standard analyses the effect of changing dynamics on business leading to the increase in lawsuits against Indian Companies and Corporates in this sector.

Read the full article on Business Standard

De-listing ‘reform’ will nudge more fraud

Sebi eases de-listing norms,” was the theme of nearly every single media report after the board meeting of the securities market regulator held on November 19. Even before the board meeting, scores of reports had dotted the media about how at that meeting, Sebi would be making life simpler for transparent de-listing of shares from Indian stock exchanges. Continue reading

BCCI ask for USD 42 million in damages from WICB

Board of Control for Cricket in India (BCCI) have reportedly claimed damages of up to US$41.97 million from the West Indies Cricket Board (WICB), as a result of the withdrawal of the Windies set-up mid way during their tour of India.

BCCI have also cancelled bilateral tours with the board for the time being and in case the board doesn’t reply within a time frame of 15 days, legal action will be taken. Sanjay Patel, BCCI’s secretary, suggested that within the next 15 days, the WICB need to reply and show that how can they reimburse for the huge losses in “acceptable terms.” Continue reading

Amazon says it faces unique risks, US SEC rules may force it to shut operations in India

BANGALORE: Amazon feels India’s laws and regulations are a risk for the company . The online retailer thinks the laws and regulations may be interpreted in a way that will make business in India more difficult than it is and, in a recent filing to the US Securities and Exchange Commission (SEC), even present the possibility that it could be forced to shut down its operations. Continue reading

Blame it on the Tax Treaties

There is no place to hide for the BJP on the black money issue after the drubbing it got in the Supreme Court. Even its vocal supporter Ramdev was at a loss for words in TV interviews to explain the Modi Government’s U-turn on the issue, after it used the same arguments as the Manmohan Singh Government against revealing the names on the list which it had received in 2010 and additionally in 2011. Continue reading

Multinational corporations seek clarity on CSR legal norms

NEW DELHI: Multinational corporations operating in India have sought clarity on the corporate social responsibility norms, saying the inconsistency between the Companies Act and the CSR rules has put them in a fix on whether they are legally bound to follow the norms on mandatory social spend. Continue reading

Child labour is rampant in the informal sector

Kailash Satyarthi, founder of the Bachpan Bachao Andolan, was named the joint winner of the Nobel Peace Prize, along with Pakistani teenager Malala Yousafzai. The award is in recognition of his campaign for over three decades against child labour. In an e-mail interview with Vidya Venkat, while travelling in Europe, he discussed his difficult journey in asserting the rights of children and his future plans. Continue reading