IT Act To Be Amended To Accommodate E-Commerce Concerns

Information technology Act 2000 (IT Act 2000) carries provisions pertaining to e-governance and e-commerce. However, IT Act 2000 has outlives its importance and it is high time to enact dedicated laws for e-governance and e-commerce in India. This though of dedicated laws brings discomfort and uneasiness to the Indian government and hence it always chooses the easy path of bring piecemeal amendments in the existing laws. Of course, this is not a productive exercise in the long run and it brings unforeseen and unproductive results.

Now once again Indian government has decided to amend the IT Act 2000 to accommodate the e-commerce concerns. We have no dedicated e-commerce laws in India and barring few provisions in the IT Act, 2000, e-commerce in India is largely unregulated. As a result regulatory violation by Indian e-commerce websites is in abundance. In fact, e-commerce websites of India are under enforcement directorate scanner.

Indian government intends to streamline e-commerce laws in India by bringing a law in the form of Communications Convergence Bill. The government plans to modify the IT Act, 2000 to provide legal recognition for transactions carried out using electronic data interchange and other means of electronic communications in a more explicit manner. It also aims to draft a set of globally acceptable guidelines to increase the legal predictability for e-commerce and adopt the United Nations General Assembly's (UNGA) recommended Model Law on Electronic Commerce (MLFC).

This is a good policy decision by Indian government and it would bring uniformity and legal certainty among e-commerce entrepreneurs of India. 

Time To Scrap Aadhaar Project Has Come

Aadhaar initiative is one of the most draconian and unwanted initiative that has been forced upon Indian citizens by our respective governments. Whether it is Congress or BJP, both have been wasting public financial resources upon an illegal and unconstitutional project like Aadhaar.

What is really surprising is the fact that all this is happening despite the fact that the Supreme Court of India has declared that Aadhaar cannot be made compulsory by Indian government. However, government departments and authorities in India are openly flouting this direction of the apex court and are committing contempt of court.

There was a dire need for the Modi government to scrap the Aadhaar project. However, Modi government preferred to keep the project alive for reasons best known to it. Experts believe that although the Modi government has allocated a big sum for Aadhaar project yet it cannot legally spend the same upon Aadhaar project till legal and technical infirmities are removed first. Otherwise, it would be another round of booty sharing of hard earned public money.

Legality of Aadhaar project has already been questioned before many courts including the apex court of India. Till now the real intentions of Indian government has come to light. The façade of public and welfare services is no more applicable to Aadhaar project as there is no element of welfare activities in the Aadhaar project. In fact, Indian government is hiding truth from Indian citizens in this regard and is all committed to violate our civil liberties.

There is no doubt that privacy is a basic human right that no government can take away. However, Indian government is not respecting this human right and is indulging in illegal and unaccountable e-surveillance and snooping. Instead of ensuring privacy rights in India, India is supporting countries like US for illegal e-surveillance upon Indian citizens.

Modi government must not fool Indians by portraying Aadhaar as a welfare project and must scrap the same till proper constitutional and legal safeguards are put in place. Indians must not enroll for Aadhaar no matter whatever arm twisting tactics are adopted by the Indian government in this regard.

International Cyber Security Cooperation

Cyber security is a complex mechanism that combines both technology and legal aspects. Further, cyber security also involves conflict of laws in cyberspace on the one hand and civil liberties protection in cyberspace on the other hand. The former is involved when the conflicting laws of two nations are involved that is usually the case these days. The latter comes into picture when the cyberspace policy of a nation is used to the detriment of the other as usually happens in the case of e-surveillance activities. Naturally international cooperation in the field of cyber security is need of the hour.

As far as India is concerned, the cyberspace landscape of India is fast changing. According to law firm Perry4Law, the cyber security breaches in India would raise complicated cyber security issues. The cyber security breaches need a mandatory reporting mechanism in India.

Similarly, with the active use of e-governance in India, cyber security of e-governance services in India must also be ensured. Indian cyberspace must be protected on a priority basis but this would create many techno legal cyber security challenges before the Narendra Modi government.

As cyber security breaches are increasing world over, both national and international stakeholders must deliberate upon this issue. The sooner this is done the better it would be for the cyberspace at large.

Indian Android Application Would Help Hearing And Speech Impaired People

India has not been very receptive to the plights and rights of disabled population. Whether it is educational institutions or public employments, disabled population in India is always at the disadvantageous position. Whatever little efforts that have come to rescue of these people they have come from private individuals with no profit motive. One such initiative has been undertaken by a team of four girls from the Vishwakarma Institute of Information Technology (VIIT) who have developed an android application to bridge the communication gap that exists between hearing and speech impaired people and normal beings. 

In an attempt to utilise their technical skills for a social cause, four students in their final year of engineering—Apeksha Bhat, Shubhangi Yerolkar, Nisha Advani and Sayali Bora—have developed this app that may prove handy. Their efforts need to be taken further on a large scale and in other directions as well.

The application in question converts the sign language into speech that will help a hearing and speech impaired person talk to people who do not understand sign language. Conversely, the hearing and speech impaired person can know what the other person speaks as the application also converts verbal language back into sign language. 

Talking about what differentiates their app from others in the market, Bhat says, “Designing an app in Hindi and only using the Indian Standard Sign Language was the most-difficult aspect of the whole development process. It is this feature that distinguishes our app from the others in the Android market and serve a similar purpose”.

For the project, the girls visited the Aadhar Deaf School located at Bibvewadi, Pune, where they researched to understand the special needs of the hearing impaired students. “Sitting in their classrooms, interacting with their faculty and the principal was an eye-opener for us. We were inspired to contribute in whatever small way we could to bridge the communication gap between them and us,” said Yerolkar. While encourage the initiative, Bilavari Karkare, principal, VIIT, Pune, has asked the college management to sponsor a smartphone with the app installed to the Aadhar Deaf School.

I hope Indian government would encourage these courageous and public spirited young girls in the larger interest of Indian population that needs special facilities.

Sanjam Garg Invents Cryptography Technology That Makes Computer Programme Code Unintelligible While Preserving Its Functionality

Encryption technology is being considered to be a good solution of many online evils. Encryption can protect individuals and companies from cyber threats, intellectual property thefts, corporate and cyber espionage and so on. Encryption can also help in protecting the intellectual property.

Protection of a software source code is considered to be a tedious job. The problem is that if we encrypt the source cod of software it may hinder its functionality and may render it useless. Sanjam Garg, a graduate of the Indian Institute of Technology, Delhi, has solved this problem and won the 2013 Doctoral Dissertation Award for developing a technique to protect such source codes.

He invented a breakthrough cryptography technology that enables the first secure solution to the problem of making computer programme code “unintelligible” while preserving its functionality. This problem, known as software obfuscation, conceals the programme's purpose or its logic in order to prevent tampering, deter reverse engineering, or pose a challenge to readers of the source code.

Garg described new mathematical tools that serve as key ingredients for transforming a program into a “jigsaw puzzle” of encrypted pieces. Corresponding to each input is a unique set of puzzle pieces that, when assembled; reveal the output of the programme. Security of the obfuscated programme hinges on the fact that illegitimate combinations of the puzzle pieces do not reveal anything.

New Company Law Of India And Cyber Obligations

Corporate law firm Perry4Law has provided a list of provisions of the Companies Act, 2013 and the rules 2014 under it. These rules and relevant provisions have been notified by Indian government from time to time. They have become operations from today i.e. 01-04-2014 hence Indian companies are required to make necessary compliances with them in due course of time.

The new company law has prescribed many techno legal compliance requirements that were not there in the old law. Thus, cyber law due diligence cannot be ignored by Indian companies anymore. Even cyber security requirements have been prescribed by the new company law. Very soon cyber security breaches notification would become mandatory in India and this would raise serious cyber security issues for Indian companies. Corporate frauds investigations are also going to increase due to increasing cyber crimes and cyber contravention among Indian companies.

The new company law regime prescribes management and inspection of documents in electronic form, electronic voting, electronic notices, etc that require a techno legal compliance on the part of Indian companies.  Corporate stakeholders would find these notifications by Indian government worth considering in this regard:

(1) Indian Companies Act, 2013 (PDF)

(2) MCA Notification Dated 26-03-2014 (PDF) Regarding 183 Sections of Indian Companies Act 2013

(3) Table Containing Provisions Of Companies Act, 2013 As Notified Up To Date And Corresponding Provisions Thereof Under Companies Act, 1956 (PDF)

(4) Roll Out Plan Of Various Forms Under The Companies Act, 2013 And Continuance Of Forms Under The Provisions Of Companies Act, 1956 (PDF)

(5) Companies 2nd (Removal of Difficulties) Order, 2014 (PDF)

(6) Companies (Appointment and Qualification of Directors) Rules, 2014 (PDF)

(7) Companies (Corporate Social Responsibility Policy) Rules, 2014 (PDF)

(8) Companies (Incorporation) Rules 2014 (PDF)

(9) Companies (Share Capital and Debentures) Rules, 2014 (PDF)

(10) Companies (Accounts) Rules, 2014 (PDF)

(11) Companies (Declaration and Payment of Dividend) Rules, 2014 (PDF)

(12) Companies (Management and Administration) Rules, 2014 (PDF)

(13) Companies (Meetings of Board and its Powers) Rules, 2014 (PDF)

(14) Companies (Prospectus and Allotment of Securities) Rules, 2014 (PDF)

(15) Companies (Registration of Charges) Rules, 2014 (PDF)

(16) Companies (Specification Of Definitions Details) Rules, 2014 (PDF)

(17) Companies (Adjudication of Penalties) Rules, 2014 (PDF)

(18) Companies (Miscellaneous) Rules, 2014 (PDF)

(19) Nidhi Rules, 2014 (PDF)

(20) Rules under Chapter XIV of Indian Companies Act, 2013 pertaining to Inspection, Inquiry and Investigation (PDF)

(21) Suggestions Regarding Rules Pertaining to Inspection, Inquiry and Investigation (SFIO) by Perry4Law (PDF)

(22) Cyber Law Due Diligence Requirements For Indian And Foreign Companies (PDF)

This list would be updated from time to time by Perry4Law. Please bookmark this page so that you can have updated information about Indian Companies Act, 2013 and Rules/Notifications made thereunder form time to time.

Telecom Environment In India Is Changing

Indian telecom environment is all set for a big overhaul after many scams and irregularities. On the one hand Indian government is encouraging electronic system design and manufacturing in India whereas on the other hand it is fine-tuning the telecom regulatory environment of India. The new merger and acquisition (M&A) guidelines issued by Indian government is seen as a pro active step by many telecom stakeholders.

The FDI policy for telecom sector of India 2014 (PDF) has also been made liberal by enhancing the limits of FDI in telecom sector of India. Indian government has also given approval to establish two semiconductor wafer fabrication manufacturing facilities in India (PDF).

At the same time regulatory compliances have also significantly increased in India in the telecom related fields. For instance telecom due diligence compliances is required to be ensured by foreign investors and those interested in M&A with Indian companies. Further, telecom stakeholders exploring the M&A route must also comply with the Internet intermediaries requirements and cyber law due diligence requirements (PDF) as prescribed by the Information Technology Act, 2000 (IT Act 2000).

The reaction of national and international telecom stakeholders are mixed in nature. Some have considered these steps as reformatory while others believe that these steps would not make much change in the existing circumstances and telecom environment. Only time would tell who is right in this regard.

M-Health Sector Of India Needs Regulatory Reforms

The healthcare sector of India is heading towards a big growth trajectory. Reports from many research organisations have shown that if India takes care of some health related aspects, then India can be greatly benefitted by this healthcare revolution. The corporate environment of India is also changing this is a good sign for healthcare industry of India.

Regulatory environment of India needs to be streamlined to make this revolution a reality. Presently, the m-health related legal violations in India are on rise as the m-health entrepreneurs in India are violating Indian laws while conducting their businesses.

Mobile handsets are increasingly being used to delivery numerous services in India. From mobile banking to online ticket reservations, everything can be managed from mobiles these days. The health sector is also utilised mobile technology to expand its services to areas that are not available through traditional medical science methods.

Mobile health or m-health is a contemporary concept in India. It has tremendous reach and it can reach even to the remotest areas of India where the traditional medical facilities cannot be provided.

However, along with increasing use of m-health in India its use must be suitably regulated by Indian government. Although we have no dedicated m-health laws in India yet m-health is presently regulated through legal provisions that can be found in different legislations.

According to New Delhi based ICT law firm Perry4Law, m-health legal requirements are not duly complied with by the m-health service providers of India. Legal compliances for privacy, data protection, data security, cyber security, cloud computing compliances, etc are still not adhered to by a dominant majority of m-health service providers in India, says Perry4Law.

This would make these m-health service providers liable to multiple legal proceedings and cases. M-health service providers are internet intermediary within the meaning of Intermediary guidelines as prescribed by Indian government.  They are also required to follow cyber law due diligence so that civil and criminal provisions under the information technology act 2000 cannot be invoked against them.

Judged by these legal standards, it is obvious that the m-health service providers in India and not complying with legal requirements at any stage and of any level. This would make them vulnerable to a host of legal actions when Indian government would become aware of these illegalities and irregularities.

Indian Online Gaming Industry Is Maturing Says Perry4Law

Online gaming industry in India is fast maturing and it is moving towards a consolidation. Both regulatory environment and business mood is hinting towards a positive report about online gaming industry of India. As the online gaming business essentially involves use of information and communication technology (ICT), certain legal precautions are essential to be observed.

For instance, both e-commerce players and online gaming entrepreneurs must strictly follow cyber law due diligence in India (Pdf). Presently neither the e-commerce players nor the online gaming entrepreneurs are observing the cyber law due diligence requirements except a selective few one. Of course, we have entrepreneurs like Laxmicoin that has decided to wait for clear regulatory requirements rather than engaging in illegal online business. Even the corporate environment in India is fast changing.

Till now we have no dedicated online gaming and gambling laws in India. This has created an atmosphere of uncertainty and fear among the online gaming entrepreneurs in India. This is also the reason why very few players have entered into the online gaming arena of India.

For instance, legality of online poker in India is still a grey area. It is neither legal nor illegal. Just like Bitcoins exchanges operating in India, online poker websites operating in India can be either legal or illegal. It all depends how an online poker website is managed in India. If it is complying with all the applicable laws and regulations, it is legal to play online poker otherwise it is illegal.

Governments around the world are trying to regulate online gaming and gambling activities. Recently, the United Kingdom asked the Internet service providers (ISPs) to insert warning pages for unlicensed gambling websites. However, the ISPs refused to comply with this demand. Similarly, Singapore is planning to ban online gaming and enact laws in this regard. India is also planning an anti match fixing law that may cover online betting as well.

On the other hand, governments are also trying to liberalise the online gaming segment. The U.K. Gaming (Licensing and Advertising) Bill has passed the third reading in the House of Commons. Similarly, a good start for Internet and online gambling in New Jersey has already taken place and there are very good signs that online poker would be allowed in United States very soon.

Back in India the regulatory environment for online gaming is fast changing. Games like poker and rummy are finding support of both community and legal and judicial fraternity. According to Praveen Dalal, managing partner of New Delhi based IT law firm Perry4Law, the High Courts in India are protecting “Games of Skills” from the Criminal actions. Recently, the Bangalore High Court in Kirana S v. State of Karnataka Criminal Petition No. 76482013 (Pdf) held that playing Rummy is not a Criminal Offence as it involved “Application of Skills”, inform Dalal. In fact, another related matter is pending before the Supreme Court of India and the Judgment of Supreme Court would decide the fate of Online Gaming Industry of India, opines Dalal.

It seems this is a good time to start online gaming businesses in India However, before doing so it would be a prudent exercise to consult a good techno legal law firm regarding regulatory compliances as any deviance may create troubles for the entrepreneurs.

Cyber Law Of India Must Be Scrapped Says Praveen Dalal

Law and technology are never on the same page. While law takes its own time to formulate and mature yet technology marches at a speed much beyond the law to catch and grasp. The same is happening in the case of Indian cyber law.

In the year 2000 a regulatory framework was introduced by Indian parliament to regulate transactions in the Indian cyberspace. India was new to this field and it considered the models suggested by foreign countries. That is well understandable as at that point of time India lacked the expertise in this regard.

However, what is frustrating is that even after 13 years of enactment of the information technology act, 2000, Indian parliament still lacks the techno legal expertise to enact a proper cyber law. According to media reports, the cyber law of India is in a bad condition. The Indian cyber law has started showing signs of decaying cyber law legislation rather than a maturing enactment. Even the techno legal experts have expressed their dissatisfaction with the present cyber law of India.

According to Praveen Dalal, managing partner of New Delhi based ICT law firm Perry4Law and leading techno legal expert of Asia, the Cyber Law of India should be repealed. According to Dalal, the present Cyber Law of India is suffering from many Irregularities and Unconstitutionalities. He believes that the Cyber Law of India must be scrapped and dedicated laws must be enacted for various fields like Cyber Law, Cyber Security, Cyber Forensics, E-Governance, etc.

These concerns are valid and genuine. The information technology act started as a piece of legislation for e-commerce and e-governance. Now it is transformed into an instrumentality of state oppression and e-surveillance. However, the real problem is how Indian parliament would enact these techno legal frameworks that required sound techno legal expertise that is presently missing.

Many provisions of the IT Act 2000 are violative of civil liberties protection in cyberspace. Some of the rules and regulations made under the IT Act, 2000 are already challenges before none other than the Supreme Court of India. It would be only prudent if Indian government scraps the IT Act, 2000 and come up with constitutionally valid legal framework.

Experts Say That Implementation Is The Main Hurdle Before Indian Cyber Security

India has been trying to get its cyber security infrastructure proper and up to date. India has also formulated the cyber security policy, 2013 to assert its seriousness about cyber security. However, cyber security in India is still in a bad shape despite all these efforts of Indian government. So what is the problem that is plaguing Indian cyber security initiatives?

According to experts although the national cyber security policy of India has been declared yet it still to have to achieve a lot. The biggest hurdle before the Indian cyber security initiatives is the lack of implementation of various cyber security polices and strategies as formulated from time to time.

Take the example of the recent declaration of establishment of a cyber command force for armed forces of India. This is the second time such a declaration has been made by Indian government. Similarly, declaration about putting in place a cyber crisis management plan of India has been made from time to time. However, till now we have no implementable cyber attacks crisis management plan of India.

It seems the necessary will power to execute various cyber security initiatives of India is missing. Similarly, the offensive and defensive cyber security capabilities of India are also missing. Indian government must consider all these aspects and come up with implementable cyber security initiatives.

India Must Regulated The Unregulated E-Commerce Says Law Firm Perry4Law

Any business without regulation would create more troubles than solutions. The same is unfortunately happening in the case of e-commerce. Since e-commerce was a new filed in India, it was logical to give it some time to settle. However, the information technology act, 2000 was enacted more than a decade ago and this is sufficient time for allowing the e-commerce to function in India almost in an unregulated manner.

However, some heavy weight legal experts have thrown their weight against such unregulated e-commerce activities in India. According to Asia’s exclusive techno legal ICT law firm Perry4Law, India must suitably regulate e-commerce activities in India.

Fortunately, the Department of Industrial Policy and Promotion (DIPP), India released a Discussion Paper (Pdf) on e-commerce in India.  The paper has endorsed the views and suggestions provided by Perry4Law regarding regulation of e-commerce in India.

The paper has also endorsed the view of Perry4Law that legal requirements for undertaking e-commerce in India also involve compliance with other laws like Contract Law, Indian Penal Code, etc. Further, online shopping in India also involves compliance with the banking and financial norms applicable in India.

The paper also cautioned the online payment providers on the exact line as have been done by Perry4Law. It also gave the same example of Paypal as provided by Perry4Law and states that if PayPal has to allow online payments receipt and disbursements for its existing or proposed e-commerce activities, it has to take a license from Reserve Bank of India (RBI) in this regard. Further, cyber law due diligence (Pdf) for Paypal and other online payment transferors in India is also required to be observed.

Foreign e-commerce companies have been lobbying in India to make Indian e-commerce business regulation free. However, Indian government should not succumb to the pressure tactics and lobbying by these foreign companies.

It is high time for Indian government to take a strong stand against the arbitrariness and lawlessness by which the Indian e-commerce industry is suffering. The sooner this is done the better it would be for the larger interest of Indian consumers.

Is Bitcoin Legal In India?

The Bitcoin saga of India has finally reached a stage where it is pertinent to answer a very crucial question. The question asks is Bitcoin legal in India? Bitcoins emerged as a preferential investment in India in the year 2013. However, the legality of Bitcoins in India was always in doubts.

This is more so when Perry4Law, the best techno legal firm in Asia, threw its weight against the open and unregulated use of Bitcoins in India. The cyber law trends of India 2013 by ICT law firm Perry4Law has cautioned (PDF) that Bitcoins websites may further face legal actions if they fail to comply with Indian laws in the year 2014.

To say the minimum Bitcoins are governed by many laws that are indirectly applicable to its dealings and transactions in India. For instance, the IT Act 2000 prescribes cyber law due diligence in India and the Internet intermediary liability in India. These cyber laws due diligence and Internet Intermediary requirements squarely apply to use of Bitcoins in India. Further, money laundering, foreign exchange and security dealing laws also apply to Bitcoins dealings and trading in India.

For too long regulatory authorities of India, including the Reserve Bank of India (RBI), remained moot spectators in the hope that Bitcoins would themselves provide a solution to their regulatory problems. However, this myth of RBI immediately became apparent the moment regulation of Bitcoins in India was demanded due to growing misuse of Bitcoins for illegal activities.

As the pressure mounted, the RBI cautioned users of virtual currencies against various risks including legal risks. Soon after the cautious advisory, the enforcement directorate (ED) swung into action and raided two Bitcoins websites and their offices. ED believes that Bitcoins money can be used for hawala transactions and funding terror operations and this seems to be a legally plausible explanation as well.

As on date the Bitcoins websites in India are under regulatory scanner and are vulnerable to all sorts of legal actions. In fact, Seven Digital Cash LLP is already facing legal risks for dealing in Bitcoins in India.

The Bitcoin entrepreneurs may feel that Bitcoins dealings in India are not illegal but this does not mean that they are legal as well. According to Perry4Law what it means is that till the position is cleared by clear cut regulations and norms, Bitcoin dealings would be regulated by existing laws and regulations. Thus, in their own interest, Bitcoin entrepreneurs must comply with existing laws. Otherwise they may be prosecuted by Indian authorities.