The Information Technology (Amendment) Act 2008

The Information Technology (Amendment) Act 2008

MODULE – I

The Information Technology (Amendment) Act 2008

This module will focus on The Information Technology (Amendment) Act 2008 (hereinafter referred to as the I.T Act) exclusively. It will be your step by step guide through the maze of various Information technology regulations so as to enable you to quickly understand the important principles that would apply to your business transactions.
In this Module we have provided material for your general understanding of the basic principles of the I.T Act. If you have any doubts or need further clarifications, please contact us.
We have divided the Module into various units for your understanding. We are currently focusing on three units which are as follows:

Unit 1 : Introduction to The IT Act – a brief history.
Unit 2 : Relevance of Electronic Records vs. Paper documents under the IT
Act.
Unit 3 : Digital Signatures vs. Electronic Signatures under the IT Act.

 

The remaining units under this Module
circulations.

UNIT 1

Introduction to the IT Act – a brief history

New Communication systems and digital technology have made dramatic changes in the way we live. Business communities as well as individuals are increasingly using computers to create, transmit and store information in the electronic form instead of traditional paper
documents. Commercial Transactions are being increasingly carried out by means of electronic data interchange and other means of electronic communication and this e-commerce across geographical barriers requires a legal framework. The United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Electronic Commerce in 1996. The General Assembly of United Nations by its Resolution No. 51/162, dated 30th January, 1997, recommended that all States should give favourable considerations to the said Model Law when they enact or revise their laws. The Model Law provides for equal treatment of users of electronic communication and paper based communication.

India became the twelfth country in the world to adopt the UNCITRAL Model Law on Electronic commerce by enacting The Information Technology Act 2000 which was notified on
October 17, 2000. The said Act has been subsequently amended as the Information Technology (Amendment) Act 2008 w.e.f
27.10.2009.

The
Information
Technology India became the twelfth
Act 2000, is country in the world to
based on adopt the UNCITRAL Model
the Model Law on Electronic
Law and commerce by enacting The
amends the Information Technology Act
Indian Penal 2000 which was notified on
Code 1860, October 17, 2000. The said
the Indian Act has been subsequently
Evidence amended as the
Act 1872 , Information Technology
the Bankers (Amendment) Act 2008
Books w.e.f 27.10.2009.
Evidence
Act 1891 and the Reserve Bank of India Act, 1934
The IT Act not only extends to the whole of India, but also applies to offences and contraventions, committed under the I.T Act outside India. It however does not apply to a negotiable instrument ( other than a cheque), power of attorney, a trust, a will, any contract for sale or conveyance of immovable property or any such class of documents as may be notified by Central Government in the Official Gazette.

UNIT 2

Relevance of Electronic Records vs. Paper documents under the IT Act

Paper documents are the traditional mode of communication and allow the following functions:
a. Authentication of contents by signature. b. Document is legible to all.
c. It would be unaltered over time.
d. It would allow for reproduction without
alteration.
e. Acceptability before public authorities
and courts.
E- Commerce is a new way of conducting,
managing and executing business transactions using modern information technology. It may also be referred to as the paperless exchange of business information using Electronic Data Interchange, Electronic Fund Transfer etc.
Electronic records are stored in forms that differ substantially from those in which they can serve their intended purpose as records.
Unlike paper based documents, EDI message and e-mails are intangible in nature until they are reduced to hard copies or displayed on the screen of the main frame. The technical means in the digital environment are available to certify the contents of a data message to confirm its originality The levels of security to an e-document are
increasing with the advancement in cryptographic technology. With tremendous advancement made in the storage technology, it
is easier to store an electronic document and preserve it for a long time. Electronic communication such as e-mail and EDI assures instantaneity and reduces the cost of communication in the digital contracts. The IT Act propagates the basic principles that there should not be any discrimination between the data message and the paper based documents so that the parties can rely upon the data message in all their electronic communications. Legal recognition to E-Commerce was granted by
adoption of UNCITRAL’s Model Law on electronic commerce by the General Assembly of the United Nations in early 1997. It is based on the

functional- equivalent approach and extends notions such as ‘writing’, ‘signature’, and ‘original’ of traditional paper- based
requirements to a paperless world. It gives legal acceptance to electronic records and digital signatures. Countries by adopting the UNCITRAL Model Law on Electronic Commerce have helped
in bringing uniformity to e-commerce laws
globally.
The IT Act propagates the basic principles that there should not be any discrimination between the data message and the paper based
documents so that the parties can rely upon the data message in all their electronic
communications.
Data, Electronic record, Electronic form, Information, Computer Network, Computer resource, Computer system, Computer, Communication device etc. have been defined under various sections of the I. T Act. Chapter III of the I.T Act covers the area of legal recognition to certain paper – based concepts and functions in electronic form. Section 4 to 8 provide for legal recognition of electronic records, digital signatures , use of electronic records and digital signatures in Government and its agencies , retention of electronic records and publication of rule , regulation etc. in electronic gazette. The IT Act has expressly recognized Electronic Data interchange as a means of communication. EDI has also been universally accepted as a replacement for traditional paper trading. before he actually accesses such website or
uses the services offered. Such agreements are referred to as click wrap agreements or
contracts. With the mushrooming of news groups and mailing lists which bring people
together sharing common interests, it is necessary to have a set of rules governing
admission into such mailing lists by way of the click-wrap mode of agreement.

UNIT 3

 

DIGITAL SIGNATURES VS ELECTRONIC SIGNATURES UNDER THE IT ACT

 

With the advent of information technology and movement of business on the internet, it became necessary that there should be a secure form of entering into online contracts. A contract can be made secure by obtaining the signature of the parties. In an online environment, the same is done through digital signatures.
Section 2 (p) of the I.T Act 2000 defines ‘digital signature’ as ‘authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with theprovisions of section 3. Section 2(zg) defines a subscriber as a person in whose name the Digital Signature Certificate is issued. Section 3(1) of the
Act gives a legal sanctity to the usage of digital signatures in the country by stating that any subscriber may authenticate an electronic record by affixing his digital signature. Under sub-section

(2) of section 3, a record can be electronically authenticated by using the asymmetric crypto system coupled with hash function which would envelope and transform the initial electronic record into another electronic record. With the passage of the IT (Amendment) Act 2008, India has become technologically neutral due to adoption of electronic signatures as a legally valid mode of executing signatures. The new section 3A has been introduced to authenticate any electronic record by electronic signature or electronic authentication technique retaining the existing section 3 which provides for authentication of an electronic record by ‘digital
Signature’.

With the passage of the IT
(Amendment) Act 2008, India has become
technologically neutral due to adoption of electronic signatures as a legally valid mode of executing
signatures

Under the Amendme nt Act, the electronic signature includes digital
signature as one of the modes ofsignatures and is far broader in ambit covering biometrics and other new forms of creating electronic signatures. At present, no system of electronic signature has been defined in the second schedule and hence there is no change in the authentication mechanism under the Act. The hash algorithms and the asymmetric crypto systems used for the current digital system will therefore continue for the time being and will be
the only method of authentication of an electronic document. In case the government needs to introduce a new system, it has to notify through the official gazette, the relevant procedure which is considered reliable. This would also require the notification to be placed before the Parliament. It is therefore considered that the digital signature system will continue to be the sole system of authentication that is currently recognized by the Indian Law. As and when procedures for electronic signatures are introduced, several sections need to undergo changes.

E: contact@alayalegal.com; T: +91 124 4288371 /2 /3; F: +91 124 437 0997 3
©Copyright Protected. Privileged & Confidential for private circulation only.
For information purposes only. This paper is not to be construed as ‘legal advice’
The Author(s) and the Firm disclaim any and all liability in respect of the present circulation.

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