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STATEMENT OF OBJECTS AND REASONS

Information Technology Act, 2000 · source PDF pages 44

Source citation: STATEMENT OF OBJECTS AND REASONS, Information Technology Act, 2000 (Act No. 21 of 2000), Source appendix, Central source snapshot, source PDF pp. 44; snapshot SHA256 003b3218fe399b293c73f6aef9ca52e5c1d080388c43fb0523572c1dc5f3d529 (current applicability unverified)

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                             STATEMENT OF OBJECTS AND REASONS
   New communication systems and digital technology have made dramatic changes in the way we live.
A revolution is occurring in the way people transact business. Businesses and consumers are increasingly
using computers to create, transmit and store information in the electronic form instead of traditional
paper documents. Information stored in electronic form has many advantages. It is cheaper, easier to
store, retrieve and speedier to communicate. Although people are aware of these advantages they are
reluctant to conduct business or conclude any transaction in the electronic form due to lack of appropriate
legal framework. The two principal hurdles which stand in the way of facilitating electronic commerce
and electronic governance are the requirements as to writing and signature for legal recognition. At
present many legal provisions assume the existence of paper based records and documents and records
which should bear signatures. The Law of Evidence is traditionally based upon paper based records and
oral testimony. Since electronic commerce eliminates the need for paper based transactions, hence to
facilitate e-commerce, the need for legal changes have become an urgent necessity. International trade
through the medium of e-commerce is growing rapidly in the past few years and many countries have
switched over from traditional paper based commerce to e-commerce.
    2. The United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law
on Electronic Commerce in 1996. The General Assembly of United Nations by its Resolution No. 51/162
dated 30th January, 1997 recommended that all States should give favourable considerations to the said
Model Law when they enact or revise their laws. The Model Law provides for equal legal treatment of
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users of electronic communication and paper based communication. Pursuant to a recent declaration by
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member countries, the World Trade Organisation is likely to form a work programme to handle its work
in this area including the possible creation of multilateral trade deals through the medium of electronic
commerce.                                                aC
   3. There is a need for bringing in suitable amendments in the existing laws in our country to facilitate
                                                   di
e-commerce. It is, therefore, proposed to provide for legal recognition of electronic records and digital
                                               In
signatures. This will enable the conclusion of contracts and the creation of rights and obligations through
the electronic medium. It is also proposed to provide for a regulatory regime to supervise the Certifying
Authorities issuing Digital Signature Certificates. To prevent the possible misuse arising out of
transactions and other dealings concluded over the electronic medium, it is also proposed to create civil
and criminal liabilities for contravention of the provisions of the proposed legislation.
    4. With a view to facilitate Electronic Governance, it is proposed to provide for the use and acceptance
of electronic records and digital signatures in the Government offices and its agencies. This will make the
citizens interaction with the Governmental offices hassle free.
    5. It is also proposed to make consequential amendments in the Indian Penal Code and the Indian
Evidence Act, 1872 to provide for necessary changes in the various provisions which deal with offences
relating to documents and paper based transactions. It is also proposed to amend the Reserve Bank of
India Act, 1934 to facilitate electronic fund transfers between the financial institutions and banks and the
Bankers' Books Evidence Act, 1891 to give legal sanctity for books of account maintained in the
electronic form by the banks.
   6. The proposal was also circulated to the State Governments. They have supported the proposed
legislation and have also expressed urgency for such legislation.
   7. The Bill seeks to achieve the above objectives.


                                                                                   PRAMOD MAHAJAN.
        NEW DELHI;
   The 1st December, 1999.




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