India’s traditional business environment is being transformed significantly by digitalisation.Due to this, there is a movement to improve the digital infrastructure to efficiently move towards a paperless economy. Since important papers are changing hands digitally, Digital Signature Certificates are quickly taking the lead as the preferred way to authorise and approve documents and transactions. However, for the users it is important to understand the legitimacy, usability, and application of e-signatures as decided by Indian e-signing legislation.
What are electronic signatures and what are the fundamental rules governing them in India?
Digital Signatures, the digital or electronic equivalent of traditional ink and paper signatures, signify that a person, organisation, or authority is in agreement with the terms of a contract, transaction, document, or administrative data. In India, there are a host of rules and regulations that govern the commercial e-signing procedures. It is important for the digital signature users to understand these regulations thoroughly.
What are India’s e-signing regulations?
In India, e-signatures are regulated by:
- The Information Technology Act (ITA) of 2000
- The 1872 Indian Contract Act (ICA)
- Electronic Signature or Electronic Authentication Technique and Procedure Rules, 2015, 2015 (ESEATPR)
- The Indian Stamp Act of 1899.
What is the statute:
The Information Technology Act, 2000: The primary statute that governs e-signing in India is the Information Technology Act, 2000 (ITA). The ITA establishes fundamental guidelines that must be adhered to while following e-signing regulations. Digital Signature Certificates (DSCs) are acknowledged as legitimate and lawful substitutes for handwritten signatures by this cornerstone of India’s e-world. Therefore, the digital signatures have the same legal significance as the hand-written one. Your e-signature is reliable whether it is used on a contract, tax return, or government file. Legally binding and enforceable documents signed with valid DSCs can be used as evidence in Indian courts.
Particular Rules: The usage of DSCs is governed by particular legislation in certain domains. For instance, Class 3 DSCs are required for secure transactions on e-tendering systems such as GeM (Government e-Marketplace). The guidelines governing the admissibility of evidence in India are established by the Indian Evidence Act, 1872. When compared to other electronic execution techniques, eSign is easier to enforce due to a number of presumptions established by the Indian Evidence Act.
Now, let’s examine what the different sections say –
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Section 47A
According to Section 47A of the Indian Evidence Act 1872, the Certifying Authority (a strictly controlled organization that gives certificates for electronic signatures) view is a pertinent fact when the Court is forming an opinion regarding an individual’s electronic signature. Thus, there is a standing aid in the form of a regulated neutral body that can attest to an electronic signature in the unlikely event that it is ever contested in court.
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Section 67A
According to Section 67A, if a signer executes a document using a secure electronic signature, it will be assumed that the eSign belongs to the signer and no one else. For non-secure eSigns, this implies that the signer’s affixation of the electronic signature must be verified. According to the Evidence Act (IT Act), PAN eSign, DSC Tokens, and Aadhaar eSign are all considered secure electronic signatures.
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Section 85A
An agreement signed using electronic signatures will be deemed to have been reached between the parties and reached finality, according to Section 85A. As a result, Section 85A provides assurance on the finality of the terms and circumstances that the parties have agreed upon.
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Section 85B
A secure electronic record is any electronic document that has been digitally signed with PAN eSign, DSC Tokens, or Aadhaar eSign. According to Clause (1), it shall be assumed in proceedings involving a secure electronic record that it hasn’t been altered since it was signed with a secure digital signature. According to Clause (2) of Section 85B, when a secure electronic signature is present, the Court will assume that the signer intended to sign or approve the electronic record,
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Section 85C
According to Section 85C, the information provided in the Electronic Signature Certificate, including the signer’s name, email address, and signing time—will be taken as accurate. The identity of the signer of the paper can be established thanks to this.
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Section 90A
Electronic records that are five years or older are covered by Section 90A. If an electronic signature is present in such records, the court will assume that the person whose electronic signature appears to be affixed did so.
Tips to ensure the legal validity of Digital Signatures in India
- Each DSC has a duration of validity. Usually for Class 3 types it is two or three years and for Class 2 types, it is one or two years. To preserve legal validity, never sign documents with an expired DSC. It is, therefore, important to renew it on time.
- Ensure that a recognised Certifying Authority has granted your DSC. Stay away from unlicensed certified public accountants, who may issue certificates with dubious validity or noncompliance.
- Before signing, always confirm the document signer’s Digital Signature Certificate. Verify the validity of their certificate and that it was issued by a reliable CA.
- Safely preserve the copies of your DSC application, renewal paperwork, and signed documentation, for future use.
- In the e-world, laws and technology change swiftly. Keep abreast on latest updates and developments that could affect the legality of your DSC.
- Speak with knowledgeable legal experts on e-signatures and their legal ramifications should be consulted for complicated transactions or legal ambiguities.
- Select a trustworthy supplier. There are reputable companies like Religare Digital provide assistance and direction on adhering to the law and efficiently utilising DSCs.
Wrapping up
Now that you have a detailed understanding about the legal validity of Digital Signatures in India, you can confidently operate in the e-legal world. A legally recognised DSC is your key to safe and legalised transactions.