Also, Aadhaar will not be mandatory for obtaining a new SIM card. Taking cognizance of the worries expressed by the people over violation of Right to Privacy following Aadhaar data leak, Justice Sikri said that a "robust" data protection regime has to be brought at the earliest.
Justice Sikri's judgment also upheld Section 139AA OF Income Tax Act.
The top court barred private companies from accessing the data and also directed that schools, banks and telecom companies cannot make Aadhaar mandatory for availing their services.
The Court has struck down the Sections 33 (2), 47 & 57 Of the Aadhaar Act.
There is a fundamental difference between Aadhaar and other identity proof as Aadhaar can not be duplicated and it is a unique identification.
The petitioners wanted the Aadhaar Act to be struck down in its entirety.
Addressing a press conference in the national capital, the Bharatiya Janata Party (BJP) leader hit out at the critics of Aadhaar, saying those criticising the unique identification scheme need to understand that they "cannot defy technology".
"We welcome the Supreme Court's decision to strike down Section 57 of the Aadhaar Act". It is clear that Aadhaar would be a biometric identity proof only and that too not mandatory for private entities to use and so not compulsory for citizens to furnish.
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Media have reported several cases of Aadhaar breaches, but Unique Identification Authority of India (UIDAI), which manages the programme, and other supporters, argue the system is foolproof and secure. Now, banks, telephone service providers can not insist on Aadhaar. Paytm, the largest mobile wallet in the country received a lot of flak for mandating Aadhaar linking before the final verdict was passed.
He said the data was vulnerable to be misused by third party and private vendors, and that too, without the consent of an individual.
A former Judge of the Karnakata High Court, Justice K S Puttaswamy, along with a host of other petitioners, opposed the government's move to make Aadhaar mandatory for availing social security benefits and other services. Authentication data can be retained only for six months.
Aadhaar, a Hindi word meaning "foundation", has already been used to give hundreds of millions of Indians their first bank account, proponents say - with another 190 million people still to go. "The court has observed that minimal data is collected for the purposes of establishing identity under Aadhaar".
While Chief Justice Dipak Misra, and Justices A.K. Sikri, A.M. Khanwilkar and Ashok Bhushan form the majority, Justice D.Y. Chandrachud wrote a dissenting view, calling Aadhaar "a fraud on the Constitution".
The Supreme Court later clarified that it had never given any such order.
The case had been referred by the apex court to a Constitution Bench for hearing in 2015.