Yes Bank refused to open a company’s account without Aadhaar, violating SC orders. Bombay HC ordered Rs 50,000 compensation for illegal insistence on Aadhaar.
Mumbai: Today, on June 30, in a recent and significant ruling, the Bombay High Court slammed Yes Bank Ltd for insisting on an Aadhaar Card as a mandatory document to open a bank account, despite the Supreme Court having already ruled against such compulsion.
The Court ordered the bank to pay Rs 50,000 as compensation to Microfibers Pvt. Ltd, the petitioner company, for the hardship caused due to the refusal to open a bank account without Aadhaar.
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The case was heard under Writ Petition No. 1706 of 2018 by a Division Bench comprising Justice M.S. Sonak and Justice Jitendra Jain.
The oral judgment was delivered on 26th June 2025, and it firmly underlines that private entities like banks cannot demand Aadhaar as a precondition, as per the landmark Supreme Court verdict striking down Section 57 of the Aadhaar Act.
The Background
Microfibers Pvt Ltd, the petitioner company, faced difficulties in renting out its premises in Bombay due to the absence of a bank account in its name.
To solve this, the company applied to Yes Bank in January 2018 to open a bank account. However, Yes Bank denied the request, stating that an Aadhaar Card was mandatory.
As per the court document, it was stated:
“By communication dated 24-26th April 2018, the Respondent-Bank informed the Petitioner that providing an Aadhaar Card was mandatory. Without an Aadhaar Card, no Bank account can be opened in the name of the Petitioner.”
Despite the service of notice in the writ proceedings, no representative of the Bank or their Advocates appeared before the Court, while Mr. Niyam Bhasin appeared on behalf of the Petitioner.
Court’s Observations
The court expressed concern that the bank had taken such a rigid stance even when the Supreme Court of India had ruled against mandatory Aadhaar for private service providers.
The Bombay High Court noted that:
“No reply was filed by the Bank on the prayer for compensation, despite an opportunity being granted.”
However, the judges did not ignore a crucial development. Yes Bank later admitted that Aadhaar was no longer mandatory after the SC judgment:
“We cannot ignore the fact that the Respondent-Bank, on 29th November 2018, made a statement that it would open the Bank account without insisting on an Aadhaar Card, given the decision of the Hon’ble Supreme Court.”
The Verdict
After considering the circumstances in totality, the Court passed the following order:
“We direct the Respondent-Bank to pay the Petitioner compensation of Rs. 50,000/- within a period of eight weeks from the date on which the Petitioner provides a copy of this order to the Respondent-Bank.”
Finally, the bench disposed of the petition with the following direction:
“The Rule in this Petition is disposed of with the above directions. There shall, however, be no order as to costs. All concerned are to act on an authenticated copy of this order.”
Legal Significance
This judgment serves as a clear reminder to all private entities—including banks, mobile operators, schools, colleges, and companies—that they cannot compel citizens to provide Aadhaar as a condition to access services, especially after Section 57 of the Aadhaar Act was struck down.
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Failure to adhere to this can now result in legal action and damages, as shown in this case where the petitioner succeeded in claiming compensation.
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