Digital Signatures in times of the Coronavirus Lockdown

What are Digital Signature Certificates?

Digital Signature Certificates (“DSC”) are the digital equivalent (that is electronic format) of physical or paper certificates. Few examples of physical certificates are drivers’ licenses, passports or membership cards. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a DSC can be presented electronically to prove one’s identity, to access information or services on the internet or to sign certain documents digitally.

Physical documents are signed manually, similarly, electronic documents, for example e-forms are required to be signed digitally using a DSC.

The Information Technology Act, 2000 (“IT Act, 2000”) has provisions for use of digital signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is secure and authentic way to submit a document electronically. As such, all filings done by the companies/LLPs under MCA21 e-Governance programme are required to be filed using digital signatures by the person authorized to sign the documents.

Some Important Facts about DSC

  • You can use only the valid Digital Signatures issued to you. It is illegal to use Digital Signatures of anybody other than the one to whom it is issued.
  • Certification Agencies are appointed by the office of the Controller of Certification Agencies (CCA) under the provisions of IT Act, 2000. There are a total of eight Certification Agencies authorized by the CCA to issue Digital Signature Certificates (DSCs). The details of these Certification Agencies are set out in Annexure –A. The company representatives and professionals required to obtain DSCs are free to procure the same from any one of the approved Certification Agencies as per the MCA portal. The issuance costs in respect of each Agency vary and are market driven.
  • The Ministry of Corporate Affairs has stipulated a Class-II or above category signing certificate for e-Filings under MCA21. A person who already has the specified DSC for any other application can use the same for filings under MCA21 and is not required to obtain a fresh DSC.
  • The DSCs are typically issued with one year validity and two year validity. These are renewable on expiry of the period of initial issue.

How to obtain DSC?

Applicants can directly approach Certifying Authorities with original supporting documents. DSCs can also be obtained, wherever offered by CA, using Aadhar e-KYC based authentication. A letter/certificate issued by a Bank containing the DSC applicant’s information as retained in the Bank database can be accepted. Such letter/certificate should be certified by the Bank Manager.

A licensed Certifying Authority thereafter issues the digital signature.

The different types of Digital Signature Certificates are:

Class 2: Here, the identity of a person is verified against a trusted, pre-verified database; and

Class 3: This is the highest level where the person needs to present himself or herself in front of a Registration Authority (RA) and prove his/ her identity.

DSC of either Class 2 or Class 3 signing certificate category issued by a licensed Certifying Authority (CA) needs to be obtained for e-Filing on the MCA Portal.

Admissibility of DSCs

Digital Signatures are legally admissible in a Court of Law, as provided under the provisions of IT Act, 2000.

Importance of DSCs during the Coronavirus Lockdown

The nationwide lockdown to stem the flow of coronavirus has brought almost all business activity to a standstill. Most people are working remotely and it is causing problems across verticals–from vendor onboarding, hiring new employees, and drawing up contracts to even getting approvals from top bosses. 

Digital signature and electronic documentation startups are looking to leverage these disruptions. Companies have gone remote and are using Slack, Zoom and Hangout to stay connected, but signatures and approvals continue to be a challenge. Here, the DSCs are extremely beneficial in getting approvals and signatures remotely. Legaldesk and SignDesk are two products of Bengaluru-based startup Desk Nine, which offers digital signatures to more than 40 large enterprises. Like Desk Nine, startups such as Leegality, eMudhra and Digio offer digital signatures, electronic stamping, paperless documentation and other services to corporates in India and even outside. 

Digital signatures are recognized as per the Information Technology Act as a valid instrument for enforcing contracts. These signatures can be done through crypto-tokens, Aadhaar or video-based verifications. 

These are valid in a court of law but companies still prefer “wet signatures” on paper by taking print outs and scanning them for digital safe-keeping. 

Use of DSCs by the Government in times of lockdown

It is pertinent to note that the use of DSCs for approval of notifications is also being used by the Government. The Union Ministry of Commerce and Industry has designed an online platform for issuance of a key document required for exports to those countries with which India has trade agreements, with a view to facilitate shipments during the coronavirus crisis. An exporter has to submit a ‘certificate of origin’ at the landing port of the importing country. The document is important to claim duty concessions under free-trade agreements (FTAs). This certificate is essential to prove where their goods come from. India has implemented such agreements with regions including ASEAN, Singapore, South Korea, Japan, Sri Lanka, Thailand, South Asian Free Trade Area, and Asia-Pacific Trade Agreement. The Directorate General of Foreign Trade has said that in view of the movement restrictions in place due to the coronavirus pandemic in India, the designated agencies will issue digitally signed electronic certificates of origin only and no hard copy will be provided.

Further, it has been clarified that the electronic copy of the certificate will carry a digital signature of an authorized officer as already agreed to under the relevant trade agreement.

By

Sakshee Kumar, Abhay Nevagi & Associates

info@anevagi.com