Electronic signatures in India.
Legal considerations and recommended best practices—
an Adobe/Trilegal white paper.
Introduction to electronic signatures. For the two types of e-signatures to be valid under Indian
law, they must satisfy these additional conditions (Reliability
Indian law has recognised electronic signatures, or e-signatures,
Conditions):
under the Information Technology Act, 2000 (IT Act) for over
18 years. With its increased emphasis on improving the ease • E-signatures must be unique to the signatory (they must be
of doing business; streamlining the storage of records; and uniquely linked to the person signing the document and no
improving the safety, security, and cost-effectiveness of records, other person). This condition is met with a certificate-based
the Government of India has promoted the use of digital digital ID.
technologies by Indian citizens and corporations. As a result, • At the time of signing, the signatory must have control over
there has been a recent increase in the use of e-signatures, the data used to generate the e-signature (for example, by
with more and more services using them. directly affixing the e-signature to the document).
The IT Act treats electronic signatures recognized under it as • Any alteration to the affixed e-signature, or the document
equivalent to physical signatures, subject to a few exceptions. It to which the signature is affixed, must be detectable (for
also generally allows documents to be signed using any form example, by encrypting the document with a tamper-
of e-signatures. However, an e-signature must satisfy a number evident seal).
of conditions, and certain checks must be done before it can be • There should be audit trail of steps taken during the signing
relied upon. This white paper provides an overview of the law in process.
India in relation to e-signatures and briefly describes how Adobe
• Signer certificates must be issued by a Certifying Authority
Sign, an electronic signature solution from Adobe, simplifies
(CA) recognised by the Controller of Certifying Authorities
electronic signatures and allows you to sign documents securely.
appointed under the IT Act. Only a CA licensed by the
Controller of Certifying Authorities can issue e-signature
Requirements for validity. or digital signature certificates. View a list of licensed
The IT Act broadly provides for the enforcement of electronic Certifying Authorities.
signatures and recognises two types of electronic signature as
If each of the Reliability Conditions is satisfied, then there is a
having the same legal status as handwritten signatures. This
legal presumption in favour of the validity of any document
lets companies choose the method best suited to their unique
signed using an electronic signature.
requirements. The methods specifically recognised under the
IT Act are: Please note that Adobe has engaged eMudhra, which is a
CA, to issue certificates that meet the requirements of the IT
• Electronic signatures that combine an Aadhaar identity
Act. Hence, a document signed using Adobe Sign which uses
number with an electronic Know-Your-Customer (eKYC)
eMudhra-issued certificates carries the presumption of validity.
method (such as a one-time passcode). This method is
known as the eSign online electronic signature service.
• Digital signatures that are generated by an “asymmetric
crypto-system and hash function.” In this scenario, a signer is
typically issued a long term (1- to 2-year) certificate-based
digital ID stored on USB token, which is used—along with a
personal PIN—to sign a document.
June 2020 | Electronic Signatures in India White Paper 1
Validity of other forms of electronic signing. The documents that are executed using such other methods are
not treated the same as documents signed with wet signatures.
Documents signed using an electronic means, other than an
Therefore, if the validity of an electronic contract is disputed,
e-signature as prescribed under the IT Act, are not invalid.
the party claiming validity of the contract must be able to
Section 10A of the IT Act states that contracts that are
demonstrate that the essentials of a valid contract are fulfilled
otherwise validly concluded will not be rendered invalid
and that the parties in fact did execute the contract using a
merely because they were made in electronic form. In the case
technology that followed the Reliability Conditions.
of Tamil Nadu Organic Private Ltd & Others v. State Bank of India,*
the Madras High Court observed that “contractual liabilities If email or another form of authentication is used to sign a
could arise by way of electronic means and that such contracts document electronically, then the following industry best
could be enforced through law.” The High Court further stated practices should be implemented to help satisfy the requirements
that Section 10A of the IT Act enables the use of electronic of the IT Act:
records and electronic means for the conclusion of agreements,
• Include a mechanism for verifying the identity of the party
contracts, and other purposes.
who signed the document (for example, by sending a
A contract executed using email as the first authentication verification request to a unique email address, or sending an
method or that adds a second factor of authentication, such OTP to the signing party’s mobile phone).
as a password or phone PIN, may be valid under Indian • Obtain the signing party’s consent to do business electronically.
law, provided it satisfies the requirements of the IT Act. The
• Be able to demonstrate clearly that the signing party
Supreme Court in the case of Trimex International Fze Limited,
intended to sign the document electronically by the
Dubai v. Vedanta Aluminium Limited† held that unconditional
particular method used.
offer and acceptance through emails constituted a valid
contract under the Indian Contract Act, 1872 (Contract Act). • Track the process securely and keep an audit trail that logs
The Apex Court ruled that once the contract is concluded each step.
orally or in writing, the mere fact that a formal contract is • Secure the final document with a tamper-evident seal.
yet to be prepared and initialled by the parties would not
However, customers can use Adobe Sign in combination
affect either the acceptance of the contract so entered into or
with certificates issued by eMudhra, which is a CA. For these
implementation thereof, even if the formal contract has never
use cases, there will be presumption of validity in favour of
been initialled.
documents signed using Adobe Sign in combination with
This follows the principles enumerated under the Contract Act, eMudhra-issued certificates. In addition, using Adobe Sign,
which recognizes even oral and unwritten contracts, provided the customer can implement features and functionality that
that principles relating to contract formation such as offer, achieve industry best practices including a mechanism for
acceptance, lawful consideration, and capacity of the parties determining the identity of the signatories, audit trails, and
are satisfied. Multiple judgments by Indian courts have held providing encryption to ensure that the final document is
that the formation of a contract can be inferred based on the tamper-proof.
conduct of parties and that they need not be in writing. This ‡
Adobe Sign allows the user to electronically sign an electronic
means that a party cannot successfully argue that a contract
document using certificates and store such document in the
was never formed when he/she has acted upon the contract.
cloud or email a signed document to a unique email address.
For instance, an employee cannot dispute the existence of
In the case of a contract, the recipient signing party can
an electronic contract, if she acted upon it by coming to the
countersign the document as required. However, the signing
workplace and performing her duties or drawing salaries or
party cannot make any other modifications to the document
benefits under the employment contract.
unless so requested by the document sender. Once the signer
completes the fields, Adobe Sign enables the contract to be
emailed back to the sender, which can be downloaded as a
tamper-proof PDF.
* Tamil Nadu Organic Private Ltd & Others v. State Bank of India, AIR 2014 Mad 103.
†
Trimex International Fze Limited, Dubai v. Vedanta Aluminium Limited, (2010) 3 SCC 1.
. Haji Mohammed Ishaq v. Mohamed Iqbal, AIR 1978 SC 798.
‡
June 2020 | Electronic Signatures in India White Paper 2
Government use of e-signatures. Some states such as Maharashtra, Karnataka, and Delhi
specifically extend the requirement for stamping to electronic
Government authorities such as the Ministry of Corporate
records. When stamps are accepted electronically, solutions
Affairs, Department of Revenue, and Ministry of Finance accept
like Adobe Sign can be tailored to meet those requirements.
electronic records authenticated using digital signatures. In the
case of e-filing with the Ministry of Corporate Affairs, income Companies should always confirm with their internal legal
tax and GST (goods and service tax) filings, digital signatures team whether a document needs to be stamped before signing
are the preferred mode of execution. and executing the document electronically. If a document
is signed and executed electronically and is required to be
The Reserve Bank of India (RBI) has allowed small finance
stamped, then the company should ensure that a physical copy
banks and payment banks to rely on electronic authentication
of the document is prepared and stamped.
for confirmation of the terms and conditions of the banking
relationship. The RBI also allowed a one-time P (OTP) based If a document is not properly stamped, then in some circumstances,
eKYC process for onboarding customers by all regulated financial penalties may be imposed. Some states penalise
entities, subject to certain conditions. deliberate non-stamping of documents with imprisonment
and/or fine (although these provisions are rarely enforced).
These examples indicate the shift towards the use of
e-signatures. If a document is not properly stamped, then in some circumstances
financial penalties may be imposed. Some states penalise
Where electronic signatures cannot deliberate non-stamping of documents with imprisonment
be used. and/or fine (although these provisions are rarely enforced).
The following documents cannot be electronically signed and
must be executed using traditional “wet” signatures in order to Summary
be legally enforceable: The Government of India’s Digital India initiative focuses
on digital infrastructure and aims to transform India into a
• Negotiable instruments such as a promissory note or a bill of
paperless economy. In the past few years, the government’s
exchange other than a cheque
initiative to promote a digitised economy has resulted in a
• Powers of attorney
widespread acceptance of electronic records and electronically
• Trust deeds signed documents by government authorities.
• Wills and any other testamentary disposition
For organisations implementing e-signatures, it is
• Real estate contracts such as leases or sale agreements recommended that only electronic and digital signatures as
recognised by the IT Act be used to avoid any risks, such as
Other considerations when signing admissibility and enforceability of documents or contracts
electronically. signed electronically, before the authorities.
Application service providers, like Adobe, offer electronic
Requirement to stamp.
signature based dedicated solutions designed to address the
In India, certain documents must be stamped before or at
requirements discussed in this paper.
the time of execution. Currently, no law in India prescribes a
method for stamping electronic documents. Trilegal
January 2020
Important Disclaimer
This information is intended to help businesses understand the legal framework of electronic signatures. However, Adobe cannot provide legal advice. This guide should
not serve as a substitute for professional legal advice. You should consult an attorney regarding your specific legal questions. Laws and regulations change frequently, and
this information may not be current or accurate. TO THE MAXIMUM EXTENT PERMITTED BY LAW, ADOBE PROVIDES THIS MATERIAL ON AN "AS-IS" BASIS. ADOBE
DISCLAIMS AND MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THIS MATERIAL, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
REPRESENTATIONS, GUARANTEES OR WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, OR ACCURACY.
ADOBE WILL NOT BE LIABLE TO ANYONE FOR ANY DIRECT, SPECIAL, INDIRECT, MORAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR EXEMPLARY DAMAGES
ARISING FROM USE OF THIS MATERIAL, INCLUDING LOSS OF PROFITS, REPUTATION, USE, OR REVENUE OR INTERRUPTION OF BUSINESS REGARDLESS OF THE
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ADVISED OF THE POSSIBILITY OF THE CLAIM OR LOSS.
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June 2020 | Electronic Signatures
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