Legality of eSignatures in India and ensuring compliance
for Indian businesses

Electronic signatures: What are they?

Electronic signatures are digital versions of your signature that indicate your agreement to the contents of a document or contract when you sign it online. They provide a hassle-free way to sign documents remotely, eliminating the need for physical paperwork, and enabling faster and more streamlined transactions.

They are legally binding for a variety of purposes and can either be typed, drawn on the screen of an electronic device, or uploaded from your desktop. This modern alternative to "wet" signatures has been adopted across the world, as it empowers individuals and businesses to sign documents online in a legal, secure, and efficient way.

Enhancing business efficiency with e-signatures

In the digital era, electronic signatures have become an indispensable part of business operations, offering convenience, efficiency, and legality. Adoption of Zoho Sign for electronic signatures enhances the signing process by ticking crucial boxes such as:

• Speed
• Authentication
• User experience
• Security
• Legal structure
• Cost-effectiveness

Popular fields of use

Businesses often function across departments, including sales, marketing, finance, legal, human resources, and more. Physical signatures pose security risks and lead to haphazard documentation. Over time, this causes several complications and slows the business down. This is where Zoho Sign can be brought into play, as multiple industries can reap the benefits of time efficiency, cost efficiency, and customer experience. It caters to the unique needs of different fields, a few of which are:

• Banking and Finance
• Human Resources
• Education
• Healthcare
• Government
• Non-profit
• Telecommunication

What makes a contract valid?

For electronic signatures to be recognised as legally valid and the equivalent to handwritten signatures, the following conditions must be met:

• Reliability
• The use of an authentication technique stated in the second schedule of the IT Act.

Conditions for reliability:

• The signature creation data or the authentication data are within the context in which they are used, and linked to the signatory or the authenticator and to no other person.
• The signature creation data or the authentication data were, at the time of signing, under the control of the signatory or the authenticator and of no other person.
• Any alteration to the electronic signature made after affixing such signature is detectable.
• Any alteration to the information made after its authentication by electronic signature is detectable.
• It fulfils such other conditions which may be prescribed.

The authentication techniques described in the second schedule:

• Aadhar or e-KYC services.
• Key pair-generation, storing of key pairs, and identity verification of digital signatures lays down certain duties on the trusted third party.

This leads to the issuance of a digital certificate from a licensed Certifying Authority.

Zoho Sign in the public domain

Government organisations can use Zoho Sign for a wide range of functions within the public domain for its reliable e-signature capabilities. Zoho Sign's inclusion on the Government e-Marketplace (GeM) portal highlights its credibility, guaranteeing its compliance with legal requirements and approval by relevant authorities.

This listing attests to the dependability of Zoho Sign and also exhibits its extensive adoption across public sectors. As a result, government organisations can trust Zoho Sign to optimise document signing procedures and maintain security protocols in their digital workflows.

Document timestamping

A digital timestamp is a digitally signed notation that is appended to the electronic data, digital signature, or certificate that indicates that certain digital data exists at a certain point in time. This process securely binds the date and time to the document, ensuring its authenticity and integrity.

Zoho Sign partners with recognised timestamping authorities, GlobalSign and Seiko, to provide trusted digital timestamps for electronic transactions. These timestamps validate the authenticity of e-signatures and verify that the signed document existed in the given form at the time of signing and remains unaltered. This adds a robust layer of security to the signing process. By making signatures tamper-proof, digital timestamps enhance the reliability of signed documents for both legal and commercial purposes.

Security measures

Electronic signatures are growing in popularity for their convenience and efficiency in signing documents. However, one must take the necessary precautions to keep fraudulent activities and illegal access at bay. Zoho Sign employs the following security measures.

• Authentication

  Robust authentication techniques are used to confirm the signer's identity. One-time passwords, PINs, knowledge-based authentication, biometric verification, and two-factor authentication are some common methods.

• Encryption

  For EAR, encryption is done at the application layer using the military-grade AES-256 algorithm, whereas SSL encryption is done while in transit. Zoho Sign is based on PKI (public key infrastructure) to provide top-notch security for your documents.

• Audit trails

  Detailed audit trails that record all actions taken during the signing process, including who signed the document, when it was signed, and any changes made to the document, are maintained. This helps track and verify the integrity of the signing process and provides a trail of evidence in case of disputes.

• Document integrity verification

  To ensure the integrity of the signed document, powerful mechanisms like hash functions are employed. These functions generate unique digital fingerprints (hash values) of the document before and after signing. Comparing these hash values allows recipients to verify that the document has not been altered since it was signed.

Instances where e-signatures are prohibited

There are some exceptions where documents cannot be electronically signed to be considered legitimate.

• A negotiable instrument as defined in Section 13 of the Negotiable Instrument Act, 1881.
• A power-of-attorney as defined in section 1A of the Powers-of-Attorney Act, 1882.
• A trust as defined in section 3 of the Indian Trust Act, 1882.
• A will as defined in clause (h) of section 2 of the Indian Succession Act, 1925.
• Any other testamentary disposition by whatever name called.

Conclusion

As the Government of India has given the nod for businesses to adopt electronic signatures, India's goal of transitioning into a paperless economy is finally taking shape. However, compliance with the laws and regulations surrounding the usage of electronic signatures in India is indispensable. With Zoho Sign, businesses can be assured of a seamless signing process and admissibility of electronically signed documents in the court of law with its array of robust features and compliance with the IT Act.

Resources

• Information Technology Act, 2000