Information Technology Act 2000- An

overview

IT Act, 2000

Enacted on 17th May

2000- India is 12th
nation in the world to
adopt cyber laws
IT Act is based on
Model law on ecommerce adopted
by UNCITRAL

Objectives of the IT Act

To provide legal recognition for transactions: Carried out by means of electronic data interchange, and
other means of electronic communication, commonly
referred to as "electronic commerce
To facilitate electronic filing of documents with
Government agencies and E-Payments
To amend the Indian Penal Code, Indian Evidence
Act,1872,
the Bankers Books
Evidence Act
1891,Reserve Bank of India Act ,1934

Extent of application

Extends to whole of India and also applies to any offence

or contravention there under committed outside India by
any person {section 1 (2)} read with Section 75- Act
applies to offence or contravention committed outside
India by any person irrespective of his nationality, if such
act involves a computer, computer system or network
located in India

Section 2 (1) (a) Access means gaining entry into

,instructing or communicating with the logical, arithmetic
or memory function resources of a computer, computer
resource or network

Definitions ( section 2)

"computer" means electronic, magnetic, optical or other high-speed

date processing device or system which performs logical, arithmetic
and memory functions by manipulations of electronic, magnetic or
optical impulses, and includes all input, output, processing, storage,
computer software or communication facilities which are connected
or relates to the computer in a computer system or computer
network;
"computer network" means the inter-connection of one or more
computers through(i) the use of satellite, microwave, terrestrial lime or other
communication media; and
(ii) terminals or a complex consisting of two or more interconnected
computers whether or not the interconnection is continuously
maintained;

Definitions ( section 2)

"computer system" means a device or collection of devices,

including input and output support devices and excluding calculators
which are not programmable and capable being used in conjunction
with external files which contain computer programmes, electronic
instructions, input data and output data that performs logic,
arithmetic, data storage and retrieval, communication control and
other functions;
"data" means a representation of information, knowledge, facts,
concepts or instruction which are being prepared or have been
prepared in a formalised manner, and is intended to be processed,
is being processed or has been processed in a computer system or
computer network, and may be in any form (including computer
printouts magnetic or optical storage media, punched cards,
punched tapes) or stored internally in the memory of the computer.

Definitions ( section 2)

"electronic record" means date, record or date generated, image or sound

stored, received or sent in an electronic form or micro film or computer
generated micro fiche;
secure system means computer hardware, software, and procedure that-
(a) are reasonably secure from unauthorized access and misuse;
(b) provide a reasonable level of reliability and correct operation;
(c) are reasonably suited to performing the intended function; and
(d)
adhere to generally accepted security procedures
security procedure means the security procedure prescribed by the
Central Government under the IT Act, 2000.
secure electronic record 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

E-Commerce

Universal Internet access

Total Internet economy in 2004

E-Commerce spending in 2004

US $ 2.5 trillion

E-Commerce in India in 2005

US $ 4.48 trillion

Rs. 1,95,000 Crore

E-Commerce in Asia in 2005

28% of world total

Electronic Commerce

EC transactions over the

Internet include

Formation of Contracts
Delivery of Information and
Services
Delivery of Content

Future of Electronic
Commerce depends on
the trust that the transacting
parties place in the security
of the transmission and
content of their
communications

E comm potential problems

Security on Net-Confidentiality, Integrity and
Availability.
Cyber crimes-Hackers, Viruses
Technological Complexities
Lack of Information trail
Complex cross border Legal Issues
Desparate Regulatory Environment and
Taxation Policies.

Electronic World

Electronic document produced by a

computer. Stored in digital form, and
cannot be perceived without using a
computer

It can be deleted, modified and

rewritten without leaving a mark
Integrity of an electronic document is
genetically impossible to verify
A copy is indistinguishable from the
original
It cant be sealed in the traditional way,
where the author affixes his signature

The functions of identification,

declaration, proof of electronic
documents carried out using a digital
signature based on cryptography.

Electronic World
Digital signatures created and verified using
cryptography
Public key System based on Asymmetric
keys

An

algorithm generates two different and related

keys
Public key
Private Key

Private

key used to digitally sign.

Public key used to verify.

Public Key Infrastructure

Allow parties to have free access to the signers

public key
This assures that the public key corresponds to
the signers private key
Trust

between parties as if they know one another

Parties with no trading partner agreements,

operating on open networks, need to have
highest level of trust in one another

Role of the Government

Government has to provide the definition of

the structure of PKI
the number of levels of authority and their juridical
form (public or private certification)
which authorities are allowed to issue key pairs
the extent to which the use of cryptography should
be authorised for confidentiality purposes
whether the Central Authority should have access
to the encrypted information; when and how
the key length, its security standard and its time
validity

Section 3 Defines Digital

Signatures
The authentication to be affected by use of
asymmetric crypto system and hash
function
The private key and the public key are
unique to the subscriber and constitute
functioning key pair
Verification of electronic record possible

Secure digital signature-S.15

If by application of a security procedure agreed to by the parties

concerned, it can be verified that a digital signature, at the time it
was affixed, was:
(a)unique to the subscriber affixing it;
(b) capable of identifying such subscriber;
(c)created in a manner or using a means under the exclusive
control of the subscriber and is linked to the electronic record to
which it relates in such a manner that if the electronic record was
altered the digital signature would be invalidated,
then such digital signature shall be deemed to be a secure digital
signature

Certificate based Key

Management
CA

CA

User A

User B
CA

Operated

by trusted-third
party - CA
Provides Trading Partners
Certificates
Notarises the relationship
between a public key and
CA B
its owner

Essential steps of the digital signature process

XYZ wants to send a message relating to new Tender to DOD.

XYZ computes message digest of the plain text using a Hash Algorithm.
XYZ encrypts the message digest with his private key yielding a digital
signature for the message.
XYZ transmits the message and the digital signature to DOD.
When DOD receives the message, DOD computes the message digest of
the message relating to plain text, using same hash functions.
DOD decrypts the digital signature with XYZs public key.
If the two values match, DOD is assured that:
a. The originator of the message is XYZ and no other person.
b. Message contents have not been tampered
with.

Digital signatures- How & Why?

1.
2.

3.
4.
5.

6.
7.

Integrity, Authentication and Non Repudiation

Achieved by use of Digital Signatures
If a message can be decrypted by using a particular senders public key it
can be safely presumed that the message was encrypted with that
particular senders private key.
A message digest is generated by passing the message through a oneway cryptographic function-i.e it cannot be reversed.
When combined with message digest, encryption using private key allows
users to digitally sign a message.
When digest of the message is encrypted using senders private key and is
appended to the original message,the result is known as Digital Signature
of the message.
Changing one character of the message changes message digest in an
unpredictable way.
Recipient can be sure that the message was not changed after message
digest was generated if message digest remains unaltered.

Section 4- Legal recognition of

Electronic Records

If any information is required in printed or

written form under any law the Information
provided in electronic form, which is
accessible so as to be usable for
subsequent use, shall be deemed to
satisfy the requirement of presenting the
document in writing or printed form.

Sections 5, 6 & 7

Legal recognition of Digital Signatures

Use of Electronic Records in Government & Its Agencies

Publications of rules and regulations in the Electronic

Gazette.

Retention of Electronic Records

Accessibility of information, same format, particulars of
dispatch, origin, destination, time stamp ,etc

CCA has to regulate the

functioning of CAs in the
country by

Licensing Certifying Authorities (CAs) under section 21

of the IT Act and exercising supervision over their
activities.
Certifying the public keys of the CAs, i.e. their Digital
Signature Certificates more commonly known as Public
Key Certificates (PKCs).
Laying down the standards to be maintained by the CAs,
Addressing the issues related to the licensing process

The licensing process

Examining the application and accompanying
documents as provided in sections 21 to 24 of the IT
Act, and all the Rules and Regulations there- under;
Approving the Certification Practice
Statement(CPS);
Auditing the physical and technical infrastructure of
the applicants through a panel of auditors
maintained by the CCA.

Key Size mandated by the

CCA

CA
2048-bit

RSA-key

User
1024-bit

RSA-key

Licensed Certifying
Authorities

Provides services to its subscribers and relying parties as

per its certification practice statement (CPS) which is
approved by the CCA as part of the licensing procedure.

Identification and authentication

Certificate issuance
Certificate suspension and revocation
Certificate renewal
Notification of certificate-related information
Display of all these on its website
Time-stamping

PKI Hierarchy

CCA

Directory of
Certificates
CRLs

Subscriber

CA

CA

Subscriber

CA

Relying
Party

Directory of
Certificates
CRLs

Subscriber

Section 15- Secure Digital

Signatures
If Digital signatures are applied in such a
manner that if ER was altered the Digital
Signatures would be invalidated then it is
called Secured Digital signatures
Unique to subscriber
Identifies the subscriber

IT Act overview of other relevant

provisions

Section 16- Central Government to prescribe

security procedures
Sec 17 to 34- Appointment and Regulation of
Controller and certifying authority
Sec 35 to 39- Obtaining DSC
Sec 40 to 42- Duties of Subscriber of DSCexercise due care to retain the private key

Section 12- Acknowledgement of

Receipt

If Originator has not specified particular method- Any

communication automated or otherwise or conduct to
indicate the receipt
If specified that the receipt is necessary- Then unless
acknowledgement has been received Electronic
Record shall be deemed to have been never sent
Where ack. not received within time specified or within
reasonable time the originator may give notice to treat
the Electronic record as though never sent

Section 13- Dispatch of Electronic

record

Unless otherwise agreed dispatch occurs when ER enters resource

outside the control of originator
If addressee has a designated computer resource , receipt occurs at
time ER enters the designated computer, if electronic record is sent
to a computer resource of addressee that is not designated , receipt
occurs when ER is retrieved by addressee
If no Computer Resource designated- when ER enters Computer
Resource of Addressee.
Shall be deemed to be dispatched and received where originator
has their principal place of business otherwise at his usual place of
residence

Data diddling: changing data prior or

during input into a computer

Section 66 and 43(d) of the I.T. Act covers the offence

of data diddling
Penalty: Not exceeding Rs. 1 crore
Case in point :
NDMC Electricity Billing Fraud Case: A private
contractor who was to deal with receipt and accounting
of electricity bills by the NDMC, Delhi. Collection of
money, computerized accounting, record maintenance
and remittance in his bank who misappropriated huge
amount of funds by manipulating data files to show less
receipt and bank remittance.

Seth Associates, 2008 All Rights Reserved

Section 46 IT Act

Section 46 of the IT Act states that an adjudicating officer

shall be adjudging whether a person has
committed a
contravention of any of the provisions of the said Act, by
holding an inquiry. Principles of Audi alterum partum and natural
justice are enshrined in the said section which stipulates that
a reasonable opportunity of making a representation shall be
granted to the concerned person who is alleged to have
violated the provisions of the IT Act. The said Act stipulates
that the inquiry will be carried out in the manner as prescribed
by the Central Government

All proceedings before him are deemed to be judicial

proceedings, every Adjudicating Officer has all powers conferred
on civil courts

Appeal to cyber Appellate Tribunal- from decision of Controller,

Adjudicating Officer {section 57 IT Act}

Seth Associates, 2008 All Rights Reserved

Section 47, IT Act

Section 47 of the Act lays down that while adjudging the

quantum of compensation under this Act, the adjudicating
officer shall have due regard to the following factors,
namely-

(a) the amount of gain of unfair advantage, wherever

quantifiable, made as a result of the default;

(b) the amount of loss caused to any person as a result of

the default;

(c) the repetitive nature of the default

Seth Associates, 2008 All Rights Reserved

Cybercrime provisions under IT

Act,2000
Offences & Relevant Sections under IT Act

Tampering with Computer source documents

Sec.65
Hacking with Computer systems, Data alteration
Sec.66
Publishing obscene information
Sec.67
Un-authorized access to protected system
Sec.70
Breach of Confidentiality and Privacy
Sec.72
Publishing false digital signature certificates
Sec.73
Seth Associates, 2008 All Rights Reserved

Section 65: Source Code

Most important asset of software companies

Computer Source Code" means the listing of
programmes, computer commands, design
and layout
Ingredients
Knowledge or intention
Concealment, destruction, alteration
computer source code required to be kept or
maintained by law
Punishment
imprisonment up to three years and / or
fine up to Rs. 2 lakh
Seth Associates, 2008 All Rights Reserved

Section 66: Hacking

Ingredients
Intention or Knowledge to cause wrongful loss
or damage to the public or any person
Destruction, deletion, alteration, diminishing
value or utility or injuriously affecting
information residing in a computer resource

Punishment
imprisonment up to three years, and / or
fine up to Rs. 2 lakh

Cognizable, Non Bailable,

Section 66 covers data theft aswell as data alteration

Seth Associates, 2008 All Rights Reserved

Sec. 67. Pornography

Ingredients
Publishing or transmitting or causing to be published
in the electronic form,
Obscene material

Punishment

On first conviction

On subsequent conviction

imprisonment of either description up to five years and

fine up to Rs. 1 lakh
imprisonment of either description up to ten years and
fine up to Rs. 2 lakh

Section covers
Internet Service Providers,
Search engines,
Pornographic websites

Cognizable, Non-Bailable, JMIC/ Court of Sessions

Seth Associates, 2008 All Rights Reserved

Sec 69: Decryption of

information

Ingredients
Controller issues order to Government agency to intercept
any information transmitted through any computer resource.
Order is issued in the interest of the

sovereignty or integrity of India,

the security of the State,
friendly relations with foreign States,
public order or
preventing incitement for commission of a cognizable offence

Person in charge of the computer resource fails to extend all

facilities and technical assistance to decrypt the informationpunishment up to 7 years.

Seth Associates, 2008 All Rights Reserved

Sec 70 Protected System

Ingredients
Securing

unauthorised access or attempting to secure

unauthorised access
to protected system

Acts covered by this section:

Switching

computer on / off
Using installed software / hardware
Installing software / hardware
Port scanning

Punishment
Imprisonment

up to 10 years and fine

Cognizable, Non-Bailable, Court of Sessions
Seth Associates, 2008 All Rights Reserved

Sections 71 & 72

Section 71:
Offence Name - Misrepresentation to the Controller or the Certifying Authority
Description - Making any misrepresentation to, or suppression of any material fact from, the
Controller or the Certifying Authority for obtaining any licence or Digital Signature
Certificate, as the case may be.
Penalty - Imprisonment for a term which may extend to 2 years, or with fine up to 1 lakh
Rupees, or with both
section 72:
Offence Name - Penalty for breach of confidentiality and privacy
Description - Any person who, in pursuance of any of the powers conferred under IT Act, has
secured access to any electronic record, book, register, correspondence, information or
document without the consent of the person concerned discloses such electronic record, book.,
register, correspondence, information, document to any other person.
Penalty - Imprisonment for a term which may extend to 2 years, or with fine up to 1 lakh
Rupees, or with both.

Sections 73 & 74

Section 73:

Offence Name - Publishing Digital Signature Certificate false in certain particulars

Description - Publishing a Digital Signature Certificate or otherwise making it available to
any other person with the knowledge that the Certifying Authority listed in the certificate has
not issued it or the subscriber listed in the certificate has not accepted it or the certificate has
been revoked or suspended, unless such publication is for the purpose of verifying a digital
signature created prior to such suspension or revocation.
Penalty - Imprisonment for a term which may extend to 2 years, or with fine which may
extend to 1 lakh Rupees.

Section 74:

Offence Name - Publication for fraudulent purpose

Description - Creation, publication or otherwise making available a Digital Signature
Certificate for any fraudulent or unlawful purpose
Penalty - Imprisonment for a term which may extend to 2 years, or with fine up to 1 lakh
Rupees, or with both. .

Important issues to ponder..IT Act

is incomplete??
DS Should not be technology specific but
technology neutral- namely asymmetric
crypto system and hash function
Domain Names and rights of domain
name owners and squatting
IPR issues not addressed
SPAM issues

Is IT Act incomplete?

New forms of cyber crimes

Internet Banking, E-fund transfer and epayments laws.
Cyber Taxation issues: Jurisdictional

problems
PE- issues whether a website a PE
Problem of jurisdiction and extraterritorial jurisdiction
India TV,Independent News Service Pvt ltd v India
Broadcast live LLC, 2007(145)DL 521
Privacy concerns