Department of Business Economics Unit Unit TC OO = oe “| re um deg ar [ 2+ Digital s) electric gore oe _ a _ Athibutien, atknnsledgenet = ied dla es ele cheers eras $ ————— ar aoe a wnfging oe Digigel oppnnteo exstficates, Car hers ef subs — bong iid and dij dd cation tLate Tri bunmal 4s nat in port COrAAR. - eeccnmioess con)CHAPTER. INTRODUCTION TO IT ACT: 25 SCOPE AND APPLICATION _ 25.1 NEED FOR IT LEGISLATION Digital technology and new communication systems have made dramatic changes in our lives. Business transactions are being made with the help of computers. Business community as well as individuals are increasing using computers to create, transmit and store information in the elec- tronic form instead of traditional paper documents. At present many legal provisions recognise paper based records and documents, which should bear signatures (e.g, will). The electronic commerce eliminates the need for paper based transactions, keeping to facilitate e-commerce the need for legal changes has become an urgent necessity. This need to facilitate e-Commerce and e-Governance led to introduction of IT Bill, 1999. "25.2 ENACTMENT OF IT ACT, 2000 The United Nations Commission on International Trade Law (UNCITRAL) adgpted the model law on electronic commerce in 1996. The general assembly of United Nations by its resolution No. 51/162 dated 30th Janu- ary, 1997, recommended that all states should give favourable consider- ations to the said model law when they enact or revise their laws. The modal law provides for equal legal treatment of users of electronic and paper based communication, The Information Technology Bill, 1999 was passed by both the Houses of Parliament in May, 2000. It received the assent of the president on 9th June, 2000 and came to be known as THE INFORMATION TECHNOLOGY ACT, 2000. 441 Se etPara 25.9 UNIT IV - INFORMATION TECHNOLOGY ACT, 2000 444 2. To give legal recogniti authentication of any information or matter which requires authentication under any hw To facilitate the e-filing of documents with the government depart. ments and e-payments. To facilitate e-storage of data in place of paper-based methods of storage of data. To facilitate and give legal sanction to electronic transfer of funds between the banks and financial institutions. To give legal recognition for keeping books of account by bankers in electronic form. To create civil and criminal liabilities for contravention of various provisions of IT Act. 8. To amend the Indian Penal Code, 1860, The Indian Evidence Act, 1872, The Banker’s Book Evidence Act, 1891 and the Reserve Bank of India Act, 1934. y > w = x °2518 AMENDMENTS TO THE IT ACT, 2000 j The Information Technology Act has been amended in 2002, 2006 and 2008 to make it more effective and meaningful. In 2002, Sec. 1 of the Act was amended which provided that cheque is a negotiable instrument, even then the provisions of the IT Act would apply to it. The Information Tech- nology (Amendment) Act, 2008 has brought about comprehensive changes in the existing provisions for better working and administration of the Act. The main focus of the Amending Act is to provide adequate protec- tion to computer and Internet users against computer related offences and cyber terrorism. The Amending Act has attempted to introduce the concept of “Electronic signatures” and new penal provisions such as Secs. 66(A) to 66(F), Secs. 67(A) to 67(C) and Sec. 69 etc. in the IT Act. ITAA came into force w.e.f. 27th October, 2009. The provisions of the said Amend- ment Acts have been incorporated at relevant places in the succeeding chapters, 25.9 KEY DEFINITIONS (SEC. at ve ee “Access” [Sec. 2(1)(a)]. It means gaining entry into, instructing or com- municating with the logical, arithmetical, or memory function resources of a computer, computer system or computer network. Acompurer: Computer system or computer network ree with | vuul445 CH. 25 - INTRODUCTION TO IT ACT : SCOPE AND APPLICATION Para 25.9 “Addressee” [Sec. 2(1)(b)]}. It means a person who is intended by the origi- nator to receive the electronic record but does not include any intermedi- ary. “Adjudicating Officer” [Sec. 2(1)(c)]. It means adjudicating officer ap- pointed under sub-section (1) of Sec. 46 of this Act. “Affixing Electronic Signature” [Sec. 2(1)(d)]. It means adopting of any methodology or procedure by a person for the purpose of authenticating an electronic record by means of Electronic Signature. “Asymmetric Crypto System” [Sec. 2(1)(f)]. It means a system of a secure key pair consisting of a private key for creating a digital signature and a public key to verify the digital signature. “Certifying Authority” [Sec. 2(1)(g)]. It means a person who has been granted a licence to issue an Electronic Signature Certificate under Sec. 24. “Computer” [Sec. 2(1)(i)]. It means any electronic, magnetic, optical or other high-speed data processing device or system ‘which performs logi- cal, arithmetic, and memory functions by manipulations of electronic, magnetic or optical impulses. It includes all input-outmut_processing.sto- rage, computer software, or communication facilities which are connected or related to the computer in a computer system or com; work. “Computer Network” (Sec. 2(1)(j)]. It means the interconnection of one or more computers through : re (i the use of satellite, microwave, terrestrial line, wireless or other com- munication media ; and eae (i) terminals or a complex consisti ore interconnected computers whether or not the interconnection is continuously main- tained. “Computer Resource” [Sec. 2(1)(k)]. It means computer, computer sys- tem, computer network, data, computer database or software. “Computer System” [Sec. 2(1)(I)]. It means a device or collection of de; vices, including input and output support devices. It excludes calculators which are not programmable and capable of being used in conjunction with external files, which contain computer programmes, electronic in- structions, input data, and output data, that performs logic, arithmetic, data storage and retrieval, communication control and other functions. “Data” [Sec. 2(1)(0)}. It means a representation of informati ‘know. ledge, facts, concepts or instructions which are bei ppare “ i is. ina oumalized manner, and i is ntended.to.b proce: Beare wil |Para 25.9 UNITIV- INFORMATION TECHNOLOGY ACT, 2000 446 network. It may_be any form (including computer printouts magnetic or optical storage media, punched cards, punched tapes) or stored internally in the memory of the computer. ‘al Signature” [Sec. 2(1)(p)]. It means authentication of any elec- yy a subs by means ofan electronic method or proce- “Di tronic record by criber dure in accordance with the provisions of Sec. 3. “Information” [Sec. 2(1)(v)]- It includes data, message, text, images, sound, voice codes, computer programmes, software and databases or microfilm or computer generated micro fiche. “Intermediary” (Sec. 2(1)(w)]. With respect to any particular electronic record intermediary means any person who on behalf of another person receives, stores or transmits that record or provides any service with res- pect to that record and includes : @ telecom service providers, network service providers, internet service providers, web hosting service providers, search engineers, online payment sites, online-auction sites, online market places and cyber cafes, but does not include body corporate referred to in Sec. 43A. “Key Pair” (Sec. 2(1)(x)]. In an asymmetric crypto system, means a pri- vate key and its mathematically related public key, which are so related that the public key can verify a digital signature created by the private key. “Private Key” [Sec. 2(1)(zc)]. It means the key of a key pair used tofereate) €reate) a digital signature. “Public Key” [Sec. 2(1)(zd)] . It means the key of a key pair used toGerify) a digital signature and listed in the Digital Signature Certificate. “Secure System” (Sec. 2(1)(ze)]. It means computer hardware, software and procedure that : — (@) are reasonably secure from unauthorized access and misuse ; (2) provide a reasonable level of reliability and correct operation ; (©) are reasonably suited to performing the intended functions ; and (d) adhere to generally accepted security procedures, cero eeneraly accepted security proced oooeoese eee vuul447 CH. 25 - INTRODUCTION TO IT ACT: SCOPE AND APPLICATION Para 25.9 IT Act, 2000 “Appropriate Government” [Sec. 2(1)(e)]. It means as respects any mat- ter: () enumerated in List II of the Seventh Schedule to the Constitution ; (id relating to any state law enacted under list III of the Seventh Sche- dule to the Constitution, the State Government and in any other case, the Central Government. “Certification Practice Statement” [Se issued by a Ce! to specify the pr: ing Authority employs in issuing electronic signature cer! “Cyber Appellate Tribunal” (CAT) [Sec. 2(1)(1)]. It means the Cyber Ap- pellate Tribunal established under sub-section (1) of section 48. “Blectronic Form” [Sec. 2(1)(r)]. With reference to information means any information generated, sent, received and stored in media, magnetic, optical, computer memory, micro film, computer generated micro fiche or similar device. “Electronic Record” [Sec. 2(1)(f)]. It means data, record or data gene- rated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche. “Originator” [Sec. 2(1)(za)]. It means a person. who sends, generates, stores or transmits any electronic message OF SSS a er does or causes any electronic message to be sent, generated, stored or transmitted to any other person but does not include an intermediary. “Subscriber” [Sec. 2(1)(zg)]- It means a person in whose name Electronic Signature Certificate is issued. “Verify” [Sec. 2(1)(z)]. In relation to a digital signature, electronic record or public key, with its grammatical variations and cognate expressions, “verify” means to determine whether : (a) The initial electronic record was affixed with the digital signature by the use of private key corresponding to the public key of the subscriber. (b) The initial electronic record is retained intact or has been altered since such electronic record was so affixed with the digital signa- ture. 2(1)(A)]. It means a statement ices that the Ce! eure wre!