Signatures are used to authenticate a Document and by authenticate, I mean is to prove or serve to prove to be real or true or genuine. A document without the signatures of the creator or bearer of such document has no validity in the eyes of law as it cannot help determine the rights, liabilities, obligations, and duties that have been created or are purported to be created by such document concerning the parties associated or affected by the said document. Only a document in written form can be signed. An oral statement cannot be signed. Signature helps a document to get validation in the eyes of law.
Ever since the inception of writing systems between 3400 and 3200 BC, the methods of signing a piece of writing has evolved as and when Human Race has advanced to the modern age and the Information Age. The conventional methods of putting signatures are by using Mechanical reproductions and by using wet Ink, and these methods are still prevalent.
There are many ways of signing a document that are considered legitimate and hence are well recognized in the System. These include – Hand Written Signatures using wet ink, Thumb Impressions using Wet Ink, Thumb Impressions using Bio-Metric Machines, Facsimile Signatures, and Electronic Signatures.
In opposition to mainstream thinking, Electronic Signatures (e-signatures) have been legitimately substantial in India for more than 18 years now. The Information Technology Act (IT Act), went in 2000, conceded e-signatures the same lawful status as manually handwritten signatures.
“Electronic signature” signifies authentication of any electronic record by a subscriber by methods for the electronic techniques determined in the Second Schedule and comprises Digital Signature”.
E-Signature is any sign that is in the electronic structure instead of paper-based ink Signatures. Instances of E-Signatures are scanned picture/JPG picture of the individual’s inked signature, a mouse draw (in a short, crooked way) on a screen or a hand-signature made on a tablet utilizing one’s finger or stylus, a biometric hand-signature marked on a Signing hardware gadget and a Digital Signature.
The need for E-Signatures in India was largely realized in the decade of the ’90s with the emergence of the use of Computers during the Information Technology Age and its boom period. Its usage was legally recognized and adopted when the Government sector of India too started shifting its working methods from a cumbersome paper-based working system to a paperless system as it had become nearly impossible to deal with so much of hard paper and files and documents as they used to take a lot of space also and time also.
Lawful acknowledgment and recognition of Electronic Signature (according to Section 5 of the Information Technology Act, 2000): – Where any law provides that information or any other matter shall be authenticated by affixing the signature or any document should be signed or bear the signature of any person then, notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied if such information or matter is authenticated through digital signature affixed in such manner as may be prescribed by the Central Government.
This article will assist you to better comprehend the stuff for E-Signatures to be legitimately binding in India.
What sorts of e-Signatures have been recognized under the IT Act?
As per the SECOND SCHEDULE the IT Act, read with the Electronic Signature or Electronic Authentication Technique and Procedure Rules, 2015, methods have been recognized as valid legal methods of Electronic signing or Authentication which shall be done by:
a) Digital Signature Method:-
This applies the use of e-authentication, hash, and asymmetric cryptosystem techniques, leading to the issuance of Digital Signature Certificate by Certifying Authority
Digital Signatures – According to Section 2(1)(p), digital signature means ‘authentication of any electronic record using an electronic method or procedure by the provisions of Section 3‘.
Such Digital Signature to be issued only by Certifying Authority as defined in the IT act – a trusted third-party service by subscriber’s key pair-generation, storing of key pairs on hardware security module, and creation of digital signature provided that the trusted third party shall be offered by the certifying authority. The trusted third party shall send application form and certificate signing request to the Certifying Authority for issuing a Digital Signature Certificate to the subscriber.
Issuance of Digital Signature Certificate by Certifying Authority shall be based on e-authentication, particulars specified in Form C of Schedule IV of the Information Technology (Certifying Authorities) Rules, 2000, digitally signed verified information from Aadhaar e-KYC services, and electronic consent of Digital Signature Certificate applicant.
b) E-Sign method using Aadhaar e- KYC Service: –
E-Sign facilitates the digitally signing of a document by an eSign user using an Online Service. While authentication of the signer is carried out using e-KYC, the signature on the document is carried out on a backend server, which is the e-Sign provider. The service shall be offered only by Certifying Authorities. The eSign is an integrated service that facilitates issuing a Signature Certificate and performing the Signing of requested data on basis of the authenticated e-KYC response. The eSign Service shall be implemented in line with e-authentication guidelines issued by Controller. The certificate issued through eSign service will have a limited validity period and is only for the one-time signing of the requested data. eSign service operates under the provisions of the Second Schedule of Information Technology Act, 2000 (e-authentication technique using Aadhaar e-KYC services) as notified vide Electronic Authentication Technique and Procedure Rules, 2015.
Which factors make e-signatures valid in India?
Here are the 5 criteria that e-signatures must satisfy to be valid and reliable, as per the IT Act:
(a) the signature creation data or the authentication data are, within the context in which they are used, linked to the signatory or, as the case may be, the authenticator and to no other person;
(b) the signature creation data or the authentication data were, at the time of signing, under the control of the signatory or, as the case may be, the authenticator and of no other person;
(c) any alteration to the electronic signature made after affixing such signature is detectable;
(d) any alteration to the information made after its authentication by electronic signature is detectable; and
(e) it is issued by a Certifying Authority based on e-authentication, particulars specified in Form C of Schedule IV of the Information Technology (Certifying Authorities) Rules, 2000 and as recognized by the Controller of Certifying Authorities (CCA) appointed under the IT Act.
Can document of all kinds be executed using e-signatures?
Not really. Certain Specific documents that require a notarial process, or documents which must be registered with a Registrar or Sub-Registrar, can only be executed using handwritten signatures to be legally enforceable.
As per the First Schedule of the Information Technology Act, 2000 following are the documents of transactions to which the IT Act shall not apply:-
1. A negotiable instrument (other than a cheque) as defined in section 13 of the Negotiable Instruments Act, 1881 (26 of 1881).
2. A power-of-attorney as defined in section 1A of the Powers-of-Attorney Act, 1882 (7 of 1882).
3. A trust as defined in section 3 of the Indian Trust Act, 1882 (2 of 1882) including a Trust deed as well.
4. A will as be defined in clause (h) of section 2 of the Indian Succession Act, 1925 (39 of 1925), including any other testamentary disposition by whatever name called.
5. Any contract for the sale or conveyance of immovable property or any interest in such property.
FACSIMILE SEAL or SIGNATURES as a method of signing:
“Facsimile seal” means the reproduction of the seal of the issuer or the official or official body by engraving, imprinting, stamping, or other means.
“Facsimile signature” means the reproduction of a manual signature by engraving, imprinting, stamping, or other means.
A facsimile signature is valid only in certain printed documents, printed through high-tech computer printing with digital securities features, e.g. dividend/interest warrants, (company should have absolute control in printing and the facsimile signature will be available with the bank) share certificates (Directors’ signatures with at least one manual signature by an authorized signatory of the Company). For registration and filing of documents with the Registrar of Companies, the Ministry of Company Affairs has introduced digital signatures. Otherwise for filing ordinary documents facsimile signature is not permitted.
The legitimacy of Other types of Electronic signing?
Records signed using electronic means other than an e-signature as prescribed under the IT Act are not invalid. Section 10A of the IT act states that contracts that are otherwise validly concluded will not be rendered invalid merely because they were made in electronic form. In the case of Tamil Nadu Organic Private Limited and others vs State Bank of India, the Madras High court observed that “contractual liabilities” could arise by way of electronic means and that such contracts could be enforced to law. The high court further stated that section 10A of the IT act enables the use of electronic records and electronic means for the conclusion of agreements contracts and other purposes
However, the admissibility of documents signed through other electronic modes other than Digital Signatures in courts and other quasi-judicial bodies is a different question altogether which as per the recent amendments in IPC and Evidence Act, has been clarified that such documents are valid and admissible before judicial bodies.
So, what do other Statutes say about the use of Digital Signatures/E-Signatures.?
1. Companies Act, 2013
As per Sub Rule (1) of Rule 8 of Companies (Registration offices and Fees) Rules, 2014, An electronic form shall be authenticated by authorized signatories using a digital signature.
Further, As per Sub Rule (6), A scanned image of documents shall be of original signed documents relevant to the e-forms or forms and the scanned document image shall not be left blank without bearing the actual signature of the authorized person.
Secretarial Standards, (SS-1) and (SS-2), which are mandatory for all companies other than OPC and section 8 companies, do prescribe that where minutes are recorded in digital format, it will bear a “Time Stamp” and will be signed digitally.
Combined, the reading of the above extracts makes it pretty clear that only Digital Signatures can be used for electronic signing and no other mode is acceptable or has been allowed.
2. Taxation Laws & Labour Laws
This Position is the same in the Taxation laws as well as already the use of Digital Signatures for filing of returns and documents under the Income Tax Act, the GST Act has widespread prevalence. Even, in the Labour Laws such as the EPF Act ESI Act, Factories Act, and other Labour Welfare laws the use of Digital modes of signing as increased a lot in recent years and hence is validly accepted and recognized.
Bibliography: The links of online sources which have been used to collect information for this article are as follows :