The Bombay High Court has severely criticised the Unique Identification Authority of India (UIDAI), the GST Department, and Union Bank of India for their systemic failure in addressing a long-standing identity theft case involving a Mumbai resident. The division bench of Justices M.S. Sonak and Jitendra Jain ordered compensation, quashed all proceedings against the victim, and rebuked multiple agencies for dereliction of duty.
The case centred around Vilas Prabhakar Lad, who discovered that his Aadhaar and PAN credentials were fraudulently used by unknown individuals to open a bank account in Ahmedabad, register a GST firm, and issue cheques which subsequently bounced. These actions resulted in criminal proceedings and financial penalties against him, despite no fault of his own.
No FIR, No Accountability Despite Years of Complaints
Mr. Lad had lodged complaints with the UIDAI, Income Tax Department, GST authorities, and Union Bank of India as early as 2020, attaching documentary proof of misuse. Despite this, no FIR was filed by any agency, and the victim continued to face legal, financial, and mental hardships.
The UIDAI and bank claimed they had followed routine procedures during account and Aadhaar verification, while the GST authorities passed the responsibility to their Gujarat counterparts. The petitioner’s legal counsel argued that Mr. Lad was being penalised despite being the victim of impersonation, and that the authorities took no proactive steps to protect his identity or stop the ongoing fraud.
The court found that the bank had failed to authenticate Aadhaar data properly, violating both RBI’s Master Directions and Aadhaar Regulations. The judges sharply criticised all agencies involved for failing to take timely and appropriate action.
Court Grants Relief, Penalises Authorities
In its strongly worded ruling, the Bombay High Court:
- Quashed the GST department’s property attachment order
- Stayed criminal proceedings filed against Mr. Lad in relation to the bounced cheques
- Directed the GST department to remove the petitioner’s Aadhaar and PAN details from the records of the bogus firm
- Ordered UIDAI and Union Bank to pay ₹25,000 each to the petitioner
- Imposed ₹10,000 penalties on other involved agencies
- Directed that the cost be recovered from the responsible officials
The court termed the inaction of regulatory and enforcement agencies as “a complete lack of urgency and responsibility,” setting a precedent for handling identity theft cases in a more accountable manner.
A Wake-Up Call for Aadhaar and PAN Safeguards
The case underscores critical flaws in how Aadhaar and PAN details are handled by both financial institutions and regulatory bodies. It also highlights the need for greater inter-agency coordination and urgency when dealing with digital identity misuse. The ruling sends a strong signal that victims of identity fraud should not bear the burden of institutional apathy, and that accountability must be enforced at every level of governance.