|1. What is the legality of Aadhaar eSign?
Aadhaar eSign based digital signatures being used by Leegality are completely legally accepted and secure manner of electronically signing documents, under effect of Gazette Notification No. 2015 Jan -GSR 61(E) Electronic Signature or Electronic Authentication Technique and Procedure Rules, 2015. Aadhaar eSigns are recognised as an accepted method of secure electronic signatures as part of the Second Schedule of the Information Technology Act, 2010 (IT Act). The IT Act recognises secure digital signatures such as Aadhaar eSign as having legal validity equivalent to that of physical signatures. Infact, Aadhaar eSigns are a more legally and technologically secure way of signing documents than other alternative techniques. Aadhaar eSigns work under the regulatory framework set up by Controller of Certifying Authorities, Ministry of Electronics and Information Technology, Government of India.
Supreme Court’s Order
The Supreme Court’s judgement of 26 September 2018 held that use of Aadhaar authentication under Section 57 of The Aadhaar Act 2016 is unconstitutional in cases where it is not permitted by law. Further, the Central Government approved ‘The Aadhaar and other Laws (Amendment) Ordinance, 2019’ (dated 2 March 2019). This amendment to the Aadhaar Act omitted Section 57 and amended Section 4, explicitly allowing Aadhaar authentication if permitted by any other law (in line with the Supreme Court’s Order). In both these cases, Aadhaar authentication based eSign continues to be valid, as it is permitted under the Information Technology Act 2000.
On 3 May 2019, the sector regulator – Controller of Certifying Authorities (CCA) has issued revised e-authentication guidelines explicitly recognising two modes of user verification for eSign – Online Aadhaar eKYC authentication and the Offline Aadhaar eKYC verification.
|2. What documents can be signed through Aadhaar eSign?
Section 5 the IT Act reads as, “Where any law provides that information or any other matter shall be authenticated by affixing the signature or any document should be signed or bear the signature of any person then, notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied, if such information or matter is authenticated by means of digital signature affixed in such manner as may be prescribed by the Central Government”.
But Section 1(4) of the IT Act lays down- “Nothing in this Act shall apply to documents or transactions specified in the First Schedule by way of addition or deletion of entries thereto.”
Therefore, Aadhaar eSign, which is a prescribed method of digital signature, can be used to validly sign and authenticate all documents except for those expressly excluded from the application of the IT Act under the First Schedule.
These excluded documents under the First Schedule are:
1. A negotiable instrument (other than a cheque) as defined in section 13 of the Negotiable Instrument Act, 1881 (26 of 1881).
2. Power-of-attorney as defined in section 1A of the Powers-of-Attorney Act, 1882 (7 of 1882).
3. A trust as defined in section 3 of the Indian Trust Act, 1882 (2 of 1882).
4. A will as defined in clause (h) of section 2 of the Indian Succession Act, 1925 (39 of 1925), including any other testamentary disposition by whatever name called.
5. Any contract for the sale or conveyance of immovable property or any interest in such property.
|3. Can I execute my agreement through Aadhaar eSign?
Yes. Section 10 A of the IT Act reads as- “Validity of contracts formed through electronic means- Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.”10 Further, Section 85A of the Indian Evidence Act, 1972, reads as “The Court shall presume that every electronic record purporting to be an agreement containing the digital signatures of the parties was so concluded by affixing the digital signature of the parties”11. “
As already discussed above, Aadhaar eSign is a prescribed and completely legally compliant manner of digital signatures under the law and thus all agreements executed with Aadhaar eSign are completely legally acceptable.
|4. For loan agreements, is there a cap on ticket size for which Aadhaar eSign (Digital Signature) can be done?
The Reserve Bank of India, in its Master Direction – Know Your Customer (KYC) Direction, 2016 (as updated in August 2019) has limited term loans sanctioned using OTP based e-KYC (in non-face-to-face mode) to not exceed INR 60,000 in a year. This cap is for KYC purposes and not applicable to eSigning of Agreements.
The Information Technology Act and other applicable guidelines and regulations by the ‘Controller of Certifying Authorities’ (sector regulator for Digital Signatures) do not prescribe any cap on the ticket size for which digital agreements can be done.
|5. How is stamp duty paid for such digital agreements?
Leegality makes it possible to validly pay stamp duty for digital instruments.
The user can create a Stamp Request by filling a simple form. We procure the Stamp Paper/eStamp Certificate as per the provided details, print a legend on the paper based on the details, and upload a scan of the same-corresponding to the request.
When the user uploads his document, it gets merged with the scan and the Sr. No. of the Stamp Paper/eStamp Certificate is printed on every page of the document. The user can then continue to sign and send the document.
The original Stamp Paper/eStamp Certificate is delivered to the user. Stamp Duty can also be paid for counterpart copies of agreements, so that all parties have the original Stamp Paper/eStamp Certificate.
|6. What is the evidentiary status of digital documents in India?
Section 4 of the IT Act provides that any document which by law needs to be in written, typewritten or printed form, the conditions will be deemed to have been satisfied if the document has been provided in an electronic form. 12 Under the Indian Evidence Act, the definition of the word evidence includes “all documents including electronic records… “13 and the meaning of “electronic records” is the same as under the IT Act and would include any kind of digital documents as well.14
|7. As per the prevailing laws, how can I sign a document digitally in India?
Section 3 of the Information Technology Act provides that authentication of electronic records can be done by affixing of digital signatures. 15 Section 3A provides for the kinds of electronic signatures that can be used to authenticate electronic records and provides the power to Central Government to issue Notifications under the same.16 Aadhaar eSign gains legal validity out of the notification mentioned in Question 1 issued by the Central Government under the powers given to under Section 3A. Section 5 of IT Act also provides digital signatures the legal validity equivalent to that of physical signatures. 17
Further Section 85B (2)(a) of the Indian Evidence Act, 1872 says that in proceedings involving secure digital signatures (such as Aadhaar eSign), the court shall presume that the digital signature has been affixed with the intention of signing and approving it unless the otherwise can be proved.18 Section 85A and 85C of the Indian Evidence Act, 1872 also make further presumptions in favour of digitally signed agreements and the information contained in a digitally signed certificate. 19 Therefore, digitally signing a document is a completely legally compliant manner of signing a document and Aadhaar eSign can thus safely be used to sign any document except for those mentioned in Question 2.
|8. What is Aadhaar eSign exactly?
Aadhaar eSign is a method to issue digital signatures. Aadhaar authentication is just used for eKYC purposes, based on which a digital signatures certificate is issued in the name of the respective Aadhaar holder. To simplify further, Aadhaar authentication and eKYC is handled by UIDAI independently. UIDAI issues the eKYC data to the Certifying Authority, which then uses that eKYC data to fill up a special digital signature form created for this purpose and issues a digital signature certificate for every request. The digital signatures issued are done under the root certificate of the Root Certificate Authority of India. To know further check out, http://cca.gov.in/eSign.html
|9. How does Leegality provide Aadhaar eSign?
Leegality’s parent company- “Grey Swift Private Limited’ is a registered Application Service Provider with NSDL e-Governance Infrastructure Limited20, which is a registered Certifying Authority and one of the 4 licensed eSign Service Providers in India.21 All our Aadhaar eKYC requests and digital signing related requests are routed through them. As per the on-boarding22 and authentication guidelines23 issued by the Controller of Certifying Authorities, Ministry of Electronics and Information Technology, Govt. of India, Application Service Providers such as us can legally provide the Aadhaar eSign services to the market.
|10. Are Aadhaar eSigns admissible in court?
Yes, Aadhaar eSign based digital signatures are fully admissible in court.
As per Section 67A of the Indian Evidence Act, 1872, in cases of secure electronic signatures such as Aadhaar eSign, one does not need to prove that the authenticity of the digital signature of the subscriber.24 Under Section 85C of the Indian Evidence Act, 1872, it is presumed that the information contained in a digital signature certificate is correct.25 Under Section 85B (2) of the Indian Evidence Act, 1872, it is presumed that a secure digital signature is affixed by subscriber with the intention of signing or approving the electronic record.26 Under sub-section (1), the integrity of a secure electronic record is also presumed.
As per Section 47A of the Indian Evidence Act 1872, the opinion of the issuing Certifying Authority is a relevant fact for the court to make an opinion as to the digital signature of the person.28 Both Leegality and its Certifying Authority- NSDL maintain full transactional logs to assist and certify any transactions carried out through us for adjudicative purposes.
The manner and procedure of how the same have to be submitted is laid down under Section 65A and 65B of the Indian Evidence Act, 1872. 29
Thus, all documents digitally signed through Aadhaar eSign using our platform are completely admissible and in cases of disputes, both Leegality and our Certifying Authority- NSDL can issue any kind of required Certificates.
|11. What is an audit trail?
Audit trail is an authenticated document containing the logs relating to the signing transactions on the document. It contains details like the Timestamp of the transactions, the Public IP of the Signers, location of the signers during the signs, etc. The audit trail is digitally signed by our servers and helps improve trust in the documents signed through our platform. We continually improve the standards used to issue Audit Trails of documents and use Industry Best Practices to ensure reliability and trust in documents signed through our platform.
|12. How can I sign organisational documents using Aadhaar eSign?
In case of physical signatures, the authorised signatory of the organisation uses his own signature to sign a document. The same applies for Aadhaar eSign, where the authorised signatory can sign the document on behalf of the organisation.
Additionally, even though not required under law, you can also choose to use the digital stamp/seal of your company when you sign your documents through Leegality. This digital stamp/seal will be imprinted as a watermark on all the pages of the signed document along with other signature information.
|13. What are the benefits of using Aadhaar eSign based digital signatures over other alternatives?
Other forms of digital authentication modes, including the ones used in Click-wrap or other un-secure electronic signatures are not expressly accepted as valid methods of signing under the law. If used, they create huge business risk and it can be a very hard process to prove them in front of adjudicatory authorities, leading to huge transactional losses. Aadhaar eSign is thus a safe, secure, convenient and legally acceptable method of signing documents digitally.
In fact, Aadhaar based digital signatures are even more legally secure than physical signatures due to the presumptions existing in favour of the authenticity and correctness of digital signatures under Section 85A, 85B & 85 C of the Indian Evidence Act, 1872, as discussed above.
|1. What is a Secure Virtual Signature?
Secure Virtual Signature is a non-aadhaar electronic authentication mechanism. This is a reflection of the user’s consent and intention to approve the contents of an electronic document. This approval appears on the document by way of a user generated virtual sign or by the user choosing a template mark, along with the time-stamp and the chosen location.
|2. What documents can be signed through Secure Virtual Signatures?
If a document needs to be mandatorily “signed” by law, Secure Virtual Signatures may not suitable. An Aadhaar eSign should be used for such documents.
For documents where a ‘signature’ is not mandatory (most contracts fall into this category) electronic authentication by way of Secure Virtual Signature is sufficient to enter into a contract or approve the contents of the documents as per Section 10A of the Information Technology Act.
Some documents have been expressly excluded from the application of the IT Act and therefore cannot be electronically authenticated /signed. These are:
|3. What is the legality of Secure Virtual Signatures? Can I execute my contract through Secure Virtual eSignatures?
Secure Virtual Signatures is one of the acceptable ways of authenticating a contract.
Statute – The Indian Contract Act, 1872 recognizes both oral and written contracts.
Section 3 of ICA states:
“3. Communication, acceptance and revocation of proposals.—The communication of proposals the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it.” (Emphasis supplied)
A contract doesn’t need a ‘signature’ to be valid and enforceable, and “any act or omission” of the party can lead to communication of proposal and acceptance. However, contracts are written down (on paper or electronically) to ensure the ease of enforceability and certainty in the execution of the contract. A written contract once again does not require a ‘signature’ to be enforceable.
Section 10A of the Information Technology Act, 2000 also positively recognizes e-contracts:
“Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances as the case may be, are expressed in electronic form or by means of an electronic records, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose” (Emphasis supplied).
Case Law – The Supreme Court of India in the case of Trimex International FZE, Dubai v. Vedanta Aluminum Limited, (2010) 3 SCC 1 has upheld contract formation by way of mere emails:
“Once the contract is concluded orally or in writing, the mere fact that a formal contract has to be prepared and initialed by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initialed.” (Paragraph 49)
In November 2018, in the matter of Ganesh Kumar Gupta v. Matrix Cellular (RCA No.34/2017), a lower court upheld the existence of an e-contract by way of filling and submission of an electronic consumer application form.
Hand-signatures are usually used to serve three purposes: authentication of the signer, non-repudiation (un-deniability of a signature), and integrity of the content (ensured by exchanging a copy/relying on a forensic document examiner). However, the signer frequently alleges that hand signatures have been forged when the contract is enforced against him/her. This leads to increased legal uncertainty and business risk.
Leegality’s Secure Virtual Signature provides an alternative to hand-signature by providing a secure process of authentication of a document –
|4. What is an audit trail?
Audit trail is an authenticated document containing the logs relating to the electronic authentication of the document. It contains details like the timestamp of the transactions, the public IP of the signers, location of the signers during the signs, etc. The audit trail is digitally signed by our servers, creating a tamper evident seal on the document and helping improve trust in the documents signed through our platform. We continually improve the standards used to issue audit trails and use Industry Best Practices to ensure reliability and trust in documents. The fact that it is issued by a trusted third party, instead of one of the parties to the transaction, would remove any allegations of tampering with the data.
|5. How is stamp duty paid for such electronic agreements?
State governments have not prescribed a specific process for paying stamp duty for electronic agreements. Leegality makes this possible using its proprietary Instant stamping process.
You can create a Stamp Request by filling a simple form. We bulk procure the Stamp Paper/eStamp Certificate as per the provided details, print a unique legend on each paper, and upload a scan of the same to the dashboard. When you upload a document, it gets merged with the scan and the Sr. No. of the Stamp Paper/eStamp Certificate is printed on every page of the document. You can then continue to sign and send the document to the other parties.
The original Stamp Papers/eStamp Certificates are delivered to you. Stamp Duty can also be paid for counterpart copies of agreements, so that all parties have the original Stamp Paper/eStamp Certificate.
|6. How can I sign organisational documents using Secure Virtual Signature?
In case of physical signatures, the authorised signatory of the organisation uses his own signature to sign a document. The same applies for Secure Virtual Signature, where the authorised signatory can authenticate the document on behalf of the organisation.
Additionally, even though not required under law, you can choose to use the digital stamp/seal of your company when you electronically authenticate your documents through Leegality. This digital stamp/seal will be imprinted as a watermark on all the pages of the document along with the appearance of the signature.
|7. What are the benefits of using Secure Virtual Signature over other alternatives?
Hand-signatures – They have heavy hidden cost in terms of printing, handling, courier, and storage costs. These are also difficult to establish as authentic in courts as signers frequently dispute its authenticity.
Other digital authentication methods (including click-wrap or other insecure electronic signatures) – These are neither expressly accepted as valid Signatures under the law, nor have a trusted third party audit-trail and OTP verification supporting the authentication. These create legal and business risk and it can be a difficult to prove them before courts.
Aadhaar eSign – While remarkably secure and legally acceptable method of signing documents digitally, these may not be convenient in certain situations such as –
Leegality’s Secure Virtual Signature allows execution of documents, securely and quickly.
|1. What is Stamp Duty?
Stamp Duty is a tax to be paid on execution of an instrument listed in the Indian Stamp Act, 1899 or respective state stamp acts (such as The Maharashtra Stamp Act and The Karnataka Stamp Act).
Note, the stamp duty is payable on each ‘instrument’ and not on the whole transaction.
|2. What is an ‘instrument’ under the stamp laws?
The definition of the term ‘instrument’ is very wide. Instrument means any document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded.
While Stamp Duty on certain instruments (such as bill of exchange, cheque etc.) is charged under the Indian Stamp Act 1899 other instruments are charged stamp duty under the respective state stamp Acts (such as agreements, award, affidavit etc.).
|3. What is a ‘document’ under the stamp laws?
A document means any matter expressed or described upon any substance by means of letters, figures or marks or by more than any of those means intended to be used or which may be used for the purpose of recording that matter. This wide definition subsumes written documents, words lithographed or photographed prints, maps or plans, inscription on a metal plate or stone; or even a caricature.
This definition may also cover “electronic records” as defined in Information Technology Act i.e., data, record, image, sound that is generated, stored, received or sent in an electronic form. This has been made clear by way of an explanation by some state stamp laws such as Maharashtra and Karnataka.
|4. What is meant by execution of instruments?
“Executed” and “Execution” used with reference to instruments mean “signed” and “signature”.
For electronic records, this means that documents that are ‘signed’ as per the Information Technology Act 2000 will also have to be stamped.
However, some states such as Maharashtra and Delhi have gone a step further by deeming that if an electronic record can be attributed to a person (directly or indirectly), it will mean that it is ‘signed’. Therefore, even a ‘signature’ may not be required for an ‘instrument’ to require stamping.
|5. What are the consequences of not paying the appropriate stamp duty?
Any or all of these consequences may follow if a stamp-able document (including electronic document) is not stamped or not appropriately stamped–
|6. When does stamp duty become payable?
This depends on the state the Stamp Duty is payable in. For instance, in Maharashtra, all stamp-able instruments executed within the state shall be stamped before or at the time of execution or immediately after or on the next working day following the day of execution. Usually, if the instrument is only executed out of the state it may be stamped within three months after it has been first received in Maharashtra.
|7. Which state should the stamp duty be paid in?
Please consult a local advocate. Leegality does not and cannot provide legal advice.
|8. How is stamp duty calculated for a particular instrument? how much stamp duty should be paid?
Please consult a local advocate as this would change from state to state. Leegality does not and cannot provide legal advice.
|9. How is stamp duty to be paid?
Stamp Duty can be paid by any of the following means:
Not all states provide all the above options. At Leegality, we provide an Instant Stamping Solution for your electronic documents; we procure the Stamp paper/e-Stamp certificates on your behalf as an authorized agent, through licensed stamp vendors.
|10. What is an e-stamp paper?
An e-Stamp means an electronically generated impression on paper to denote the payment of Stamp duty. Even the e-Stamp paper has to be printed before use. Prominent states using e-Stamp Papers are Andhra Pradesh, Bihar, Chhattisgarh, NCT of Delhi, Gujarat, Karnataka, Uttar Pradesh and Punjab, while states like Maharashtra, Telangana still use the traditional Stamp Paper (pre-printed in a Security Press). Only for the state of Haryana is the e-Stamp paper digitally available, with no physical paper involved.
| 11. Who is liable to pay the stamp duty?
The parties to an instrument can decide this by way an agreement, usually in the same instrument requiring the payment of Stamp Duty. In absence of such an agreement, the state and central stamp statues provides for default results.
For instance, for Maharashtra, the default onus of payment of Stamp Duty in the case of an Administration Bond, Bond, Indemnity Bond, Mortgage Deed, Settlement, etc. is on the person making such instrument; in the case of a conveyance by the grantee; in the case of a lease or agreement to lease by the lessee.
|12. What is the validity of stamp paper?
Each state may have prescribed different durations within which the Stamp Paper should be used. For instance, the Maharashtra Stamp Act prescribes that the stamps should be used within six months of purchase and will be rendered invalid thereafter.
Leegality’s Instant Stamping Solution allows use of your Instant Stamp Papers for a period of 6 months.
|13. How can I pay stamp duty for my electronic documents?
Using Leegality’s Instant Stamping Gateway you can pay stamp duty for your electronic documents. These can further be signed by using Leegality’s Signing Solutions allowing for an end-to-end digital process.
The Instant Stamping Gateway seeks to facilitate valid execution of electronic documents and to help businesses reduce legal risk and business costs. This is done by providing you a seamless, online alternative to the paper heavy, slow and expensive stamping process.
|14 .How can I use Leegality’s instant stamping gateway?
The following are the broad steps for use of Leegality’s Instant Stamping Gateway:
Note that minimum 100 nos. of Stamp Papers need to be ordered in each transaction. Reach out to firstname.lastname@example.org for pricing of the Instant Stamping Gateway and to start your digital journey.
|15. How is leegality’s instant stamping better than the current process?
*Procuring, Processing, Handling, Storage, Retrieving, Data abstraction
|16. Is Leegality’s Instant Stamping Gateway legal?
We believe that use of Leegality’s Instant Stamping Gateway allows for increased convenience and reduced lifecycle cost for businesses, and therefore increase compliance with stamping laws.
Broadly the Indian Stamp Act and the state stamp acts prescribe that –
The Instant Stamping Gateway relies upon the Information Technology Act 2000 for its validity: specifically Section 4 (requirement for information to be in printed form shall be deemed to have been satisfied if such information is made available in an electronic form and accessible for a subsequent reference) and Section 7 (requirement for retention of documents shall be deemed to have been satisfied if done in the electronic form). The Information Technology Act 2000 is a Parliamentary law and has overriding effect on all other statues (at state and central level). We have undertaken, on best efforts basis, to provide a legally compliant procedure for your electronic stamping needs.
Note, any physical instrument (or its copy or counterpart) that will need stamping under the applicable stamp law will also need stamping when converted to an electronic format. Leegality’s Instant Stamping Gateway is not meant (directly or indirectly) to escape/reduce the payable stamp duty.
Disclaimer: We have not consulted or taken the view of any governmental or statutory body or any court of law, and cannot be held responsible for any different view of law that may be taken by such bodies. We encourage you to seek an independent legal opinion from your legal team/local advocate to ascertain your stamping obligation and whether Leegality’s Instant Stamping Gateway is suitable for your use-case. We have undertaken, on best efforts basis, to provide a legally compliant procedure for your stamping needs.
|17. How can I view the status of instant stamps in my document library?
The status of Digital Stamps (‘Series Number’, ‘Denomination’, ‘State’, ‘Total’, ‘Used’, ‘Unused’, and ‘In Process’) can be viewed from the ‘Stamp Dashboard’ as well as from ‘My Wallet’ tab on the Dashboard.
Can the same instant stamp be used to stamp its duplicate/counterpart?
No. Any physical instrument (or its duplicate or counterpart) that will need stamping under the applicable stamp law will also need stamping when converted into an electronic record. Therefore, if a properly stamped second copy of the electronic document is needed for other parties to the transaction, you will have to buy another Stamp Paper of appropriate value (usually a fixed value lesser than the Stamp Duty on the original copy). Leegality’s Instant Stamping Process can account for such requirements too.
|18. For which states does Leegality provide its Instant Stamp Gateway?
Leegality provides Instant Stamp Gateway for all States/Union territories. However, this is subject to availability of stamp paper.