India Electronic Signature Compliance Explanation

Are electronic signatures legal in India? What laws primarily regulate electronic signatures?

Electronic signatures are legal in India, and Indian electronic signatures are primarily regulated by the Information Technology Act, 2000 (IT Act), the Information Technology (Certifying Authorities) Rules, 2000; the Digital Signature (Final Entity) Rules, 2015, and the Information Technology (Use of Electronic Records and Digital Signatures) Rules, 2004.

What are the requirements for electronic signatures to be considered reliable and presumptively valid in India?

According to the IT Act, for an electronic signature to be considered reliable and presumptively valid, it should meet the following requirements:

• It must be unique to the signatory;
• At the time of signing, the signatory must have control over the data used to generate the electronic signature;
• Any changes to the affixed electronic signature or the document to which the signature is affixed must be detectable;
• There should be an audit trail of the steps taken during the signing process;
• The signatory’s certificate must be issued by a certifying authority (CA) recognized by the Controller of Certifying Authorities.

What are the types of electronic signatures recognized in India? What are the requirements for each?

India recognizes two types of electronic signatures, namely electronic signatures and certificate-based digital signatures.

1. Electronic Signatures

The ITA defines an electronic signature as “authentication of any electronic record by a subscriber by means of an electronic technique specified in Schedule II, including a digital signature.”

(1) ITA Schedule 2 currently specifies the following e-KYC authentication techniques and procedures:

• Aadhaar e-KYC

Authentication using Aadhaar e-KYC services is currently provided to private application service providers by the following two government entities:

• Protean eGov Technologies Limited (formerly National Securities Depository Limited);
• Centre for Development of Advanced Computing (C-DAC).
• Other e-KYC services (e.g., e-KYC using Permanent Account Number (PAN))

(2) According to Section 10-A of the Information Technology Act, the mere fact that an agreement is formed electronically does not render the agreement invalid. In such cases, the signatory may need to prove that:

• The generated signature can only be associated with the signatory and not with others;
• At the time of signing, only the signatory had access to and control over the document;
• Any changes made to the signature or the information after the signature is affixed are detectable;
• The essential elements of a valid contract under the Indian Contract Act, 1872, such as offer, acceptance, intention to create legal relations, capacity of the parties, consideration, etc., are satisfied.

2. Digital Signatures

The ITA defines “digital signature” as “authentication of any electronic record by a subscriber by electronic means or procedures in accordance with the provisions of Section 3 of the [ITA].”

In which scenarios in India is a digital signature required?

• Loan documents
• Electronic insurance policies

In which scenarios in India is a traditional signature required?

• Negotiable instruments (excluding checks): including promissory notes, bills of exchange.
• Powers of attorney, except for powers of attorney authorizing specific entities regulated by the government to act on behalf of the grantor.
• Trusts
• Wills: including any other testamentary dispositions
• Notarization
• Any contract for the sale or transfer of immovable property or any interest in such property