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Total Number of Subscribers: 426 |
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Date: 10 May 2008 |
Compiled by Mr. M. Sathya Kumar |
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Sectretary ........
E - Sectretary "A real time
transformation" Introduction: Indian corporate world on MCA21 is probably the first e-governance
programme of any ministry having largest stakeholders and reaching to almost
all corners of Company Secretary profession is the most
concerned profession of this e-governance programme. Company
Secretaries are expected to play a greater role in this process. They need to
involve themselves in training, implementation, certification and
facilitation processes of MCA21. Company Secretaries needs to be IT savvy to remain in the
competition. Profession is now more demanding and needs adoption of techno
legal approach. MCA21 process has opened up new avenues for the
professionals. They may be in the form of providing training, doing
processing, implementation and certification and to act as facilitator and
single service point. Any new opportunity does have the inherent risk
attached to it. The provisions of the Information Technology
(IT) Act govern use of technology in the business process. IT Act prescribes,
regulates, monitor the technical process embedded in any business. Therefore
understanding the IT laws of It is therefore very vital for all of us to
understand important concepts and impacts of Information
Technology Act 2000 Preamble Information Technology Act 2000 came into
existence on One of the basic objectives of this Act is
to facilitate electronic filing of documents with the government authorities.
This is the basis for introduction of electronic filing system partially
under the Income Tax Act, DGFT and fully under the Companies Act. In near
future we may witness more departments like Excise, Sales tax coming under
electronic filing. Digital signatures Section 5 of the IT Act provides the
recognitions to digital signatures. Digital signature is the identity of a
person in eworld. Digital signature is process whereby sender
authenticates the document by putting his digital signature. He also protects
the document by encoding it and the receiver who is having the Public Key
supplied by the sender, decrypts the documents and read the same. Digital signature is not a signature or
impression or mark. it is a unique pair of key provided by the certifying
authority. No person other than the originator can use the said pair of keys.
In easy terms, application of private key is known as affixing a digital
signature to the document or form. Digital signature protects the document
from tampering and gives the authenticity, integrity and attribution to the
document and also gives extreme speed to the
transaction. Non-repudiation is the important feature of digital
signature, which does not allow the originator to disown the data or
document. Now with the help of such recognition of
digital signature any person can sign the document or form without taking
print out of it and at any time and at any place. Boundaries are not the
barriers now. Postal department or documents transport system is not a hurdle
now. IT Act has established the offices of
Certification Authorities to enroll, validate issue, publish, revoke or
suspend the digital signatures. The set of rules were prescribed under the
Act for Certification Authorities. Section 35 of the Act prescribes the process
of getting the digital signature. Verification of identity of the person
applying for digital signature is the important step to be carried out by the
Certification Authorities. Section 73 of the Act provides for
imprisonment and penalty for publishing digital signature certificates false
in certain particulars. Secure Digital Signature Section 15 of the IT Act prescribes the
secure digital signature. If it is possible by application of security
procedure to verify that (a)the digital signature affixed is unique
to the subscriber; (b)it is capable of identifying the
subscriber; (c)it is created in a manner or using means
under the exclusive control of the subscriber and is link to electronic
record and would be invalidated upon alteration of such record then such
digital signature shall be deemed to be a secure digital
signature. It therefore mandatory that in each
electronic transaction we use only the secure digital signature. It is
essential to apply, enroll, process and download digital signature from own
computer to qualify it as a secure digital signature. After downloading the protection of digital
signature is very important to avoid misuse of it. Because of non-repudiation
it will be very difficult for the originator to prove that he has not used
the digital signature. Immediate communication to the Registration Authority
upon loss of digital signature token is very essential. The central government has the power to make
rules in respect of digital signatures i.e. to prescribe the type of
signature, manner and format of affixation, manner and procedure for
identification of affixing digital signature, control and security process,
any other matter to give legal effect to digital signature. Therefore we
observe different types and forms and methods of digital signatures for
different purposes. Electronic Record Section 3 of the IT Act provides legal
recognition to electronic records by way of affixing the digital signature. “Electronic
Record” means data, record or data generated, image or sound stored, received
or sent in an electronic form or microfilm or computer generated microfiche; Company secretary can now make revolutionary
changes in his traditional function of maintenance of records. Section 4 of the IT Act provides legal
recognition to electronic records. Records prescribed under any act or statue
can be maintained in the electronic form. Where any law provides that information or
any other matter shall be in writing or in the typewritten or printed form,
then, notwithstanding anything contained in such law, such requirement shall
be deemed to have been satisfied if such information or matter is— (a) rendered or made available in an
electronic form; and (b)accessible so as to be usable for a
subsequent reference. Section 4 has the overriding effect on
provisions of any other law requiring maintenance of records and documents.
Therefore all secretarial records and statutory registers can be maintained
in electronic form after complying with the specified norms. Section 7 of the IT Act provides for the
compliance of following conditions to maintain the records in electronic
form. (a) the information contained therein
remains accessible so as to be usable for a subsequent reference; (b)the electronic record is retained in the
format in which it was originally generated, sent or received or in a format
which can be demonstrated to represent accurately the information originally
generated, sent or received; (c) the details which will facilitate the
identification of the origin, destination, date and time of dispatch or
receipt of such electronic record are available in the electronic record: Security of electronic record is the
important aspect. Section 14 of the IT Act prescribes that; where any
security procedure has been applied to an electronic record at a specific
point of time, then such record shall be deemed to be a secure electronic
record from such point of time to the time of verification. Secured Electronic Process MCA21 is a secured electronic process for
complying the provision under the Companies Act, 1956 and rules made there
under. The system has been developed under the
provisions of section 6 of the IT Act. Said section provides for electronic
filing of forms and applications, issue and grant of licenses, sanctions and
approvals and issue of receipt or payment of money. This section further provides that
provisions of any law will be treated as complied if such filing, issue,
grant of license, sanction or approval and issue of receipt or payment of
money is effected in electronic form. Thus the MCA21 process has got the legality
even before amending the provisions of the Companies Act. Retention of Electronic Record MCA21 process has created a database and
repository to maintain the entire registry records at one place. The
information stored in it is a record as per provisions of the Companies Act. Section 7 of the IT Act grants the legal
recognitions to electronic records to be maintained under the provisions of
any act. The essential conditions to be satisfied are(a) the
information contained therein is accessible and usable for subsequent
references;(b) the
originality of the electronic record is maintained; (c) the
details of which will facilitate the identification of the origin,
destination, date and time of dispatch or receipt. Attribution of Electronic Record Attribution to any electronic record is the
essence of any valid legal transaction. Electronic record should be
attributed to originator. Section 11 of the IT Act provides that
attribution of electronic record to originator is possible only if it was
sent by the originator himself or by the person authorised by the originator
or by the system programmed by or on behalf of the originator. Therefore MCA21 process requires the signer
of the form to attribute that he has been authorised to sign the eform. It is
also essential to use the originator’s or authorised person’s system and login for submission of electronic record or document. Automated replies generated by the system
will qualify for attribution, if they are generated from the system programmed
by the originator. Therefore all the electronic unsigned communications
received from the MCA are valid communications. Acknowledgement of receipt of electronic
record is provided under section 12 of the IT Act. License software Use of technology has triggered off the
issue of IPR protection and use of license software. We need to respect
the IP rights of others and need to use only license software. We do not know
who is watching us on the net and collecting our system information and checking
whether we are using the licensed software. If we wish to be a facilitator or
Electronic payments Electronic payment by using the credit card/
debit cards or through Internet banking facility is inherent part of any
electronic transaction. We need to be extremely careful while using the
electronic payment facilities. We need to all the time protect our money.
Utmost care is therefore essential. Avoid giving your credit card or its
number to anybody. The owner should only make use of credit card. Certification of eforms Certification of eforms to be done very
carefully. You need to affix your digital signature as a part of your
certification. Protect your signature all the time from misuse. Keep propose
backups of the eforms and documents that you certify. Penalties and Offences IT Act has prescribed heavy penalties for
various wrong actions, which a person unknowingly commits in his daily
interaction with the computers, use of Internet, visit to web sites. It is
very essential to understand following sections of the IT Act. Section 43: Penalty for damage to
computer, computer systems etc. Any person without permission of the
owner or incharge of the computer or computer system or network (a)Accesses such computer or system or
network; (b)Download or copy or extract any data or
information; (c)Introduce or causes the introduction of
the virus ; (d)damage or cause damages ; (e)disrupts or causes disruption ; (f)denies or causes denial of access to any
person authorized to access; (g)provide any assistance to any person to
facilitate access ; (h)charges the services availed by any
person to the account of another by tampering or manipulating shall be liable to pay damages by way of
compensation not exceeding one crore rupees to the person affected. Section 44 provides for the penalty for
failure to furnish information, returns, documents, maintenance of documents
and books under the act. Section 45 is a residuary section provides
for compensation not exceeding twenty five thousand rupees or a penalty not
exceeding twenty five thousand rupees. Offences Section 65: Tampering with the
computer source document Section 66: Hacking with
computer system Section 67: Publishing of
obscene information in electronic form Section 69: failure to extend
the facility and technical assistance to decrypt the information to
government or government agency. Section 70: Securing access or
attempts to secure access to a protected system Section 71: Making
misrepresentation or hiding of any material facts Section 72: Breach of
Confidentiality and privacy Section 73: Publishing digital
signature certificate false in certain particulars Section 74: Publication of
digital signature for fraudulent or unlawful purpose Section 75 This act applies to
offences and contraventions committed outside Section 76 provides for
confiscation of computers, floppies, disks, accessories etc involved in
offence by a regulator. Section 77: Penalty or
confiscation prescribed under the act shall not prevent the imposition of any
other punishment under any other act. Section 78: Police officer not
below the rank of Deputy Superintendent of Police shall investigate any
offence under the act. Section 85 Offences by the
Companies: Any person who was incharge of, and was responsible to, the
company for conduct of business of the company as well as the Company shall
be guilty of the contravention and shall be liable to be proceeded against
and punished accordingly. Few exceptions to it were provided in the section. Amendments made in other acts IT Act, for smooth implementation and
functioning made amendments to Indian Penal Code, Indian Evidence Act,
Bankers Books Evidence Act and Reserve Bank of India Act. Rules notified under the Act The Information Technology (Certifying
Authorities) Rules, 2000 The Cyber Regulation Appellate Tribunal
(Procedure) Rules, 2000 Information Technology (Use of electronic
records and digital signatures) Rules, 2004. Information Technology (Security Procedure)
Rules, 2004. Recent Developments With an objective to review the Information
Technology Act, 2000, in the light of the latest developments and to consider
the feedback received for removal of certain deficiencies in the Act, Hon’ble Minister for Communications and Information
Technology set-up an Expert Committee under the Chairmanship of Shri Brijesh
Kumar to review the present Information Technology Act and to suggest
amendments. The committee has submitted its recommendations in the month of
August 2005. These recommendations are under consideration of the government. |
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