The Bombay High Court recently directed Yes Bank to compensate Microfibres Pvt Ltd with ₹50,000 for declining to open a bank account without an Aadhaar card, despite a 2018 Supreme Court ruling that struck down such a requirement.
The conflict dates back to January 2018 when Microfibres Pvt Ltd approached Yes Bank to open a current account. The bank insisted on Aadhaar as mandatory documentation despite the Supreme Court's interim orders permitting account opening without it.
In September 2018, the apex court conclusively ruled that Aadhaar was not mandatory for bank accounts. However, Yes Bank continued to deny the request, citing outdated requirements. This delay significantly impacted the company’s operations, including rental income generation from a Mumbai commercial property.
Due to the lack of a functioning bank account, Microfibres Pvt Ltd could not lease out its property, leading to a rental income loss estimated at ₹1.5 lakh per month. The petitioner said the property was intended to financially support the widow and unmarried daughter of the late founder-director. The company initially sought ₹10 lakh in compensation and later moved the Bombay High Court against the bank's inaction.
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A Bench of Justices M S Sonak and Jitendra Jain acknowledged that the bank had no justification for denying the account opening beyond September 26, 2018, when the SC ruling came into effect. While the Court called the ₹10 lakh claim "exaggerated," it did find merit in awarding partial compensation. Notably, Yes Bank failed to even respond to the petitioner’s claim thereafter, further strengthening the Court's stance. Hence, the Court directed Yes Bank to pay ₹50,000 within 8 weeks.
Ordinarily, such matters might be directed towards alternate remedies, but the Court considered the exceptional circumstances, including the company’s prolonged inability to earn income. The judgment serves as an example of the judiciary stepping in when regulatory obligations are ignored by corporations, especially in cases involving fundamental rights and commercial hardship.
The Bombay High Court’s decision emphasises the persistence of judicial rulings in all contexts. Yes Bank’s insistence on Aadhaar even after the Supreme Court ruled against its mandatory use hindered the operations of Microfibres Pvt Ltd. The ₹50,000 compensation reflects concern for both compliance and the company’s lost opportunities.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Jul 2, 2025, 11:57 AM IST
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