In today’s world, there is a growing trend towards paperless and contactless solutions in our daily lives. The convenience and efficiency of digital processes are undeniable, as they eliminate the need for sifting through physical pages or fretting over the loss of important documents. One aspect of this transition that many of us engage in is e-signing.
E-signatures have emerged as a crucial tool in the pursuit of a paperless existence. They allow individuals and organizations to electronically sign documents, eliminating the need for traditional pen-and-paper signatures. The process of e-signing involves using electronic means, such as a computer, smartphone, or tablet, to affix a legally binding signature to a digital document.
The Benefits of E-Signatures are manifold.
Manually printing, signing, scanning, and sending documents?
E-signing enables users to complete the entire process within minutes, hence saving considerable time and efforts. Where time is of the essence, this efficiency is particularly valuable in today’s fast paced-world.
Can you sign documents from anywhere in the world? Oh, Yes!
Regardless of geographical location, individuals can sign documents electronically, eliminating the need for physical presence or courier services. This is especially advantageous for remote collaboration, enabling seamless transactions and agreements between parties located in different parts of the world.
Are E-signature valid legally? The answer is Yes!
One significant advantage of e-signatures is their legal validity. Governments and regulatory bodies around the globe have recognized the legal standing of electronic signatures, providing a framework to ensure their authenticity and enforceability. Legislation such as the Electronic Signatures in Global and National Commerce Act (ESIGN Act) in the United States and the eIDAS Regulation in the European Union have solidified the legal acceptance of e-signatures, bolstering trust in their use.
Have you ever wondered how e-signatures keep your electronically signed documents secure and trustworthy?
Security is a critical aspect of e-signatures. Advanced encryption and authentication technologies are employed to ensure the integrity and privacy of the signed documents. These measures protect against tampering, forgery, or unauthorized access, assuring users that their electronic signatures are secure and trustworthy.
Types of E-Signature recognized by Information Technology Act 2000:
Aadhaar E-sign: With Aadhaar E-Sign, individuals can use their Aadhaar number and registered mobile number to sign documents electronically. The E-Sign service utilizes the Aadhaar-based e-KYC (Know Your Customer) authentication to verify the identity of the signer. Aadhaar E-Sign offers a convenient and legally recognized method for signing documents electronically in compliance with the Information Technology Act, 2000.
Digital Signature Certificate: A digital signature is a type of electronic signature that is based on hash system or cryptographic system which uses asymmetric cryptography to ensure integrity, authenticity, and non-repudiation of electronic documents. A digital signature is created using a private key that is securely held by the signer and verified using a corresponding public key. Digital signatures are widely used in various electronic transactions to provide a higher level of security and trust. Users acquire these keys through a reputable Certifying Authority in the form of a Digital Certificate.
According to section 2(1)(p) of the Information Technology Act 2000 Digital signature means “authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3.”
Is E-Signature valid in India?
In India, the use of electronic signatures is governed by the Information Technology Act, 2000 (IT Act) and specific regulations such as the Digital Signature (End Entity) Rules, 2015; Information Technology (Use of Electronic Records and Digital Signature) Rules, 2004; and Information Technology (Certifying Authorities) Rules, 2000.
Provisions in Information Technology Act 2000:
This is the primary legislation in India that governs electronic transactions and provides legal recognition to digital signatures. It defines digital signatures, lays down the framework for their use and establishes the role of Certifying Authorities. The Act recognizes digital signatures as a valid form of authentication and deems them to have the same legal standing as handwritten signatures.
Section 3A: aligns with Article 6 of the United Nations Commission on International Trade Law (UNCITRAL) and outlines the essential requirements for a valid electronic signature.
Section 4: Provides legal recognition to electronic records, establishing their validity in the eyes of the law.
Section 5: Provides legal recognition to electronic signatures. According to this provision, if any law requires a document to bear the physical signature of the concerned individual, such authentication can be considered valid if it is accomplished through a digital signature, following the prescribed methods set by the Central Government.
Section 10A: Confers validity to contracts formed through electronic means, reinforcing the legal acceptance of agreements conducted electronically.
Section 3A of the Information Technology Act, 2000, which aligns with Article 6 of the United Nations Commission on International Trade Law (UNCITRAL), outlines the essential requirements for a valid electronic signature.
Provisions in Evidence Act 1872
The Evidence Act 1872 contains provisions that provide a strong legal basis for the acceptance and admissibility of e-signatures as evidence in Legal proceedings. They ensure that electronic records with e-signatures are treated on par with physical documents signed by hand, thus facilitating the transition to a digital and paperless environment
Section 59A: This provision was inserted into the Evidence Act in 2018 and states that any document containing an electronic signature, as defined in the Information Technology Act, 2000, shall be deemed to be a document duly signed. This provision recognizes the legal validity of e-signatures in the same manner as physical signatures.
Section 65A: This section deals with the admissibility of electronic records and provides that electronic records, including those with e-signatures, can be admitted as evidence in court. The section specifies the conditions under which electronic records can be deemed as primary evidence.
Section 65B: This provision sets out the requirements for the admissibility of electronic evidence, including e-signatures. It specifies the conditions for the authenticity of electronic records and requires a certificate to be produced, confirming the accuracy of the electronic record and the integrity of the e-signature.
Section 85A: This section states that where a document is required by law to be signed or attested, an e-signature can fulfill that requirement. It recognizes the legal validity of e-signatures in fulfilling the signature or attestation requirement for documents.
The Criteria for valid E-Signature:
As per section 3(A) of the Information Technology Act 2000:
A subscriber may authenticate any electronic record by such electronic signature or electronic authentication technique which-
(a) is considered reliable; and
(b) may be specified in the Second Schedule.
For the purposes of this section any electronic signature or electronic authentication technique shall be considered reliable if it meets the following criteria:
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;
Meaning: E-signatures should be associated with the person signing the document using a unique identification (ID). Typically, this unique ID takes the form of a digital certificate issued by a trusted authority.
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;
Meaning: The person signing the document must have complete control over the data used to create the e-signature. This control should be established at the time of signing.
Any alteration to the electronic signature made after affixing such signature is detectable;
Meaning: Any alterations made to the document or the attached e-signature should be detectable. Users can fulfill this requirement by employing encryption techniques.
An e-signature is considered valid only if it is accompanied by an audit trail.
Meaning: The audit trail provides a detailed account of the steps taken throughout the signing process, ensuring transparency and accountability.
It fulfils such other conditions which may be prescribed.
The Central Government may, by notification in the Official Gazette, add to or omit any electronic signature or electronic authentication technique and the procedure for affixing such signature from the Second Schedule: Provided that no electronic signature or authentication technique shall be specified in the Second Schedule unless such signature or technique is reliable.
Every notification issued in the Official Gazette shall be laid before each House of Parliament.
According to the Information Technology Act, a certifying authority (CA) recognized by the Controller of Certifying Authorities (CCA) is responsible for issuing digital signature certificates. These certificates serve as a means to establish the authenticity and integrity of e-signatures.
Cases where E-Signatures are prohibited:
Electronic signatures are a convenient and efficient way to sign documents, but there are specific instances where the use of electronic signatures is not allowed, as outlined by the IT Act 2000 in India.
Wet signatures must be used for contracts involving the sale of Immovable property in India or any contract, interest or conveyance pertaining to such property for these contracts to be considered valid.
According to Section 1A of the Powers of Attorney Act, 1882, Power of Attorney documents cannot be electronically signed.
Wills and testament dispositions are not authorized to be signed using electronic signatures as per Section 2(h) of the Indian Succession Act, 1925.
Electronic signatures are prohibited for negotiable instruments, such as promissory notes or bills of exchange, except for cheques, as stated in Section 13 of the Negotiable Instruments Act, 1881.
Trust deeds must not be signed using electronic signatures as per Section 3 of the Indian Trusts Act, 1882. Wet signatures should be used for signing trust deeds.
Offences related to E-Signature:
Mostly the offences related to Electronic signatures are identity theft, publication of false signatures certificates or publication of electronic signatures with fraudulent purposes.
Section 66c of the Information Technology Act 2000 punishes any person for identity theft.
Section 71 of the information Technology act punishes any person for Misrepresentation or suppression of material facts while obtaining any license or electronic signature from the Certifying Authority or Controller.
Section 73 of the Information Technology Act punishes any person for Publication of false electronic certificate which is false in certain cases such as publication which is not certified by the certifying authority or, publication which is not accepted by the subscriber or, publication which is revoked or suspended.
Section 74 of the Information Technology act 2000 punishes any person for creation, publication or providing electronic signatures certificate for fraudulent or unlawful purpose with an imprisonment of for a term which may extend up to two years or a fine which me extend up to one lakh rupees.
E-Signature as recognized by other Statutes:
Indian Contract Act, 1872: The Indian Contract Act recognizes the validity of contracts formed through electronic means, including the use of electronic signatures. It states that contracts formed electronically are legally enforceable, as long as the essential elements of a contract are present.
Companies Act, 2013: The Companies Act includes provisions related to the filing of electronic forms by companies. It mandates the use of digital signatures for authentication of electronic forms and documents filed with the Registrar of Companies.
Income Tax Act, 1961: The Income Tax Act recognizes the use of digital signatures for various purposes, including filing income tax returns electronically. It allows taxpayers to sign their returns and other documents using digital signatures, ensuring the authenticity and integrity of the electronic records.
Reserve Bank of India (RBI) Guidelines: The RBI has issued guidelines on the use of digital signatures in the banking and financial sector. These guidelines provide the framework for the use of digital signatures for secure online transactions, authentication of digital documents, and electronic submission of forms and applications.
How to E-Sign a Document with Contractzy?
To affix a signature through Contractzy, you need to follow the below steps:
In the Contract Creation process while adding Party details, you will encounter a section where you need to select the type of Signature. You will have 3 options: Virtual Signature, Aadhar Signature and Digital Signature Certificate.
Depending on the requirements and preferences of the parties involved, choose the appropriate type of signature.
After entering all the necessary party details and signature type, click on “Create Contract” button located at the bottom right side of the screen.
Upon accessing the screen, the user interface will present options to the signatory party for creating the body of the Contract. They can either begin typing the contract manually, select from pre-existing templates, or choose clauses from a library.
Once the preferred method is chosen and the contract’s content is deemed satisfactory, the signatory can proceed by navigating to the “place signature” option available on the screen.
Depending on the selected signature type, the e-sign process may vary.
For Aadhar Signature: When creating the contract and adding the details of the signatory party, ensure that the selected signature type is “Aadhaar signature.” Subsequently, the signatory party will receive an email containing an access code for signing. To begin the signing process:
The signatory should click on the “start signing” button and enter the provided access code. This action will redirect them to the Aadhaar portal, where they will be prompted to enter their Aadhar card number.
On the top left side of the screen, a checkbox is provided to signify agreement with the terms and conditions of NSDL (National Securities Depository Limited). The signatory should click on this checkbox to indicate their consent.
To successfully complete the signature, the signatory needs to click on “Send OTP” and then enter the One-Time Password (OTP) received.
For Virtual Signature: The Signatory Party will receive an email along with an access code to sign the document. Copy the access code from the email and proceed to click on “start signing” button.
You will be redirected to a screen where the access code can be entered followed by clicking submit.
On the subsequent screen, you will be presented with the document. On the right-hand side, locate the “sign” button.
Clicking on this button will take you to a screen for face capture, which is a necessary step for document verification.
After capturing your photo, click on “confirm” to proceed further.
The next step will guide you to the emsigner Signer Gateway. Click on “place signature” and select your desired signature.
Click on “sign” button. Once the sign button has been clicked, it is important to exercise patience and refrain from canceling or clicking on anything until the image is displayed.
An email will be sent to you containing the audit trail and the completed document.
For Digital Signature Certificate: The Signatory party will receive an email containing an access code to sign the document.Click on the access code provided in the email to access the signing page. If you are unable to see the signature field on the signing page and are prompted to install the EmSigner Application, follow these steps:
Click on “EmSigner” and proceed to install the application.
If you wish to install the application in a different folder or drive, click on “Browse” or click “Next” to proceed with the default installation location.
Once the EmSigner application is downloaded and installed, click on “Sign.”
Plug in the Digital Certificate Token (DCS token) and enter the passcode associated with it. The signing procedure is now complete.
The shift towards a paperless society has brought about significant changes in how we conduct business and interact with documents. E-signatures have emerged as a crucial tool in this digital transformation, offering numerous benefits and advantages. The time-saving capabilities of E-signatures streamline workflows and eliminate the need for manual handling of physical documents. The convenience they provide allows individuals and organizations to sign and exchange documents anytime and from anywhere, enhancing productivity and efficiency. Moreover, the legal validity of E-signatures has been established in many countries, ensuring that electronically signed documents hold the same legal weight as traditional ink signatures. This recognition has opened doors to a wide range of applications across various industries, including finance, real estate, healthcare, and more. The security measures implemented in E-signature solutions, such as encryption and authentication protocols, ensure the integrity and confidentiality of digital documents, offering peace of mind to users.
As we continue to embrace digital transformation, understanding and leveraging E-signatures will be crucial in navigating the evolving landscape of a paperless world.
Hello, I'm Veda, the Legal Analyst with a knack for decoding the complex world of laws. A coffee aficionado and a lover of sunsets, oceans and the cosmos. Let's navigate the Legal Universe together!