Part I: Legal Recognition of Electronic Records and Digital Signatures

Section 4 of the IT Act is the point of reference – allowing for legal recognition of information that is present in the printed form, but is also available in a digital/electronic form. Broadly, legal recognition of electronic records can be categorised as: (1) electronic records as evidence; (2) validity of electronic contracts; (3) retention of electronic records, and; (4) validity of electronic communications.

As electronic transactions and communications have become widespread, the need to recognize electronic records as valid evidence has become central to both civil and criminal trials. Section 4 of the IT Act provides legal recognition to electronic records, and their admissibility in court is governed primarily by the Indian Evidence Act, 1872 – specifically Sections 65A and 65B, introduced via amendment in 2000.

Under Section 3 of the Evidence Act, the term "evidence" includes all documents, including electronic records, produced for the inspection of the court. Section 2(t) of the IT Act defines "electronic record" as any data, image, sound, or other content stored, sent, or received in electronic form. These provisions together place electronic records on par with traditional documentary evidence, but special procedures must be followed for them to be admissible.

This special procedure is outlined in Sections 65A and 65B of the Evidence Act, where Section 65A acts as a gateway, stating that the contents of electronic records must be proved in accordance with the procedure in Section 65B. Section 65B(1) provides that any computer output (e.g., a printout, CD, pen drive, etc.) will be deemed a document and is admissible in evidence only if it complies with the conditions set out in Section 65B(2).

A key requirement under Section 65B is the certificate under sub-Section (4). This certificate must:

(i) Identify the electronic record;

(ii) Describe how it was produced;

(iii) Give device details (like a server or phone);

(iv) Be signed by someone in a responsible position, e.g., an IT manager or forensic expert.

This certificate essentially confirms the authenticity and integrity of the electronic record, which is especially important as such records are vulnerable to tampering, deletion, or manipulation. If the certificate is missing, the electronic record may not be admissible in court unless certain exceptions apply. In practice, this means that emails, SMS, WhatsApp messages, CCTV footage, digital photographs, call data records, and even social media posts can be valid evidence if accompanied by the correct certificate and the source device is verified. Where required, comparison of hash values may also be used to confirm data integrity.

The Supreme Court in Anvar P.V. v. P.K. Basheer 2014 10 SCC 473 established the protocol and various considerations for admissibility of electronic evidence. In this case, the Petitioner – a politician – relied on certain evidence on a CD to claim that his opponent had distributed defamatory material to taint his character during elections. However, the CDs in question were submitted in evidence without the certificate mandated under Section 65B(4). The Court held that since electronic records are more susceptible to tampering, safeguards are necessary to ensure the authenticity and source of such documents. This judgement was monumental, since it overturned

This position was later reaffirmed by a larger bench in Arjun Panditrao Khotkar v. Kailash Gorantyal, which clarified that if a party does not have access to the device (e.g., CCTV footage held by a third party), then relaxation of the certificate requirement may be permitted in the interest of justice.

The courts have further emphasized that objections regarding lack of certificate must be raised at the time of producing the evidence, not at a later appellate stage (Sonu @ Amar v. State of Haryana, 2017). Additionally, a missing certificate can be treated as a curable defect (Union of India v. Ravindra Desai, 2018).

The essential elements of a contract as per the Indian Contract Act 1872 ("Contract Act") are as follow: offer, acceptance, consideration, consent, competence, and lawful object. In the absence of any of these, a contract is not valid. The fulfilment of these conditions is essential for e-contracts as well, but challenges arise with respect to evaluation of adequate fulfilment of such conditions. Section 10A of the Information Technology Act, 2000 confirms that contracts formed through electronic means are valid and enforceable. It states that such contracts shall not be denied validity solely because they are in electronic form.

Digital signatures under Sections 3 and 3A of the IT Act can also be used to authenticate e-contracts. However, many standard online contracts rely on implied consent rather than formal digital signatures. Generally, there are two types of electronic contracts – consumer specific contracts (that are literally digital versions of agreements), which would include e-mail correspondences that was recognized by the Court in Trimex (supra), and standard form contracts. Unlike consumer specific contracts, whose terms can be negotiated, standard form contracts are typically displayed in a "take it or leave it" manner, with no scope for negotiation. Take the three main types of standard form agreements:-

Click-Wrap Agreements: These require the user to click "I Agree" to terms and conditions before accessing a service. Courts have generally upheld such agreements because they involve a positive action by the user. In Amazon Seller Services Pvt. Ltd. v. M/s. Rajan Arora [2021 SCC OnLine Del 3940], the Delhi High Court held that clicking "I Agree" to standard terms displayed on an online portal amounted to valid consent, and the party was bound by the arbitration clause in the agreement. Similarly, in LIC India v. Consumer Education & Research Centre [(1995) 5 SCC 482], though not directly on e-contracts, the Supreme Court stated that a contract presented on a "take it or leave it" basis may still be valid unless it is shown to be unfair or unreasonable.

Browse-Wrap Agreements: These do not ask for explicit consent. Instead, they assume that by using the website or app, the user has agreed to the terms, which are usually linked at the bottom of the page. Courts are more cautious here. In Nguyen v. Barnes & Noble Inc. [763 F.3d 1171 (9th Cir. 2014)] (a persuasive foreign precedent), the U.S. Court of Appeals refused to enforce a browse-wrap agreement where the terms were not prominently displayed, and the user had not been made aware of them. Indian courts follow a similar approach. In Ravi Prakash Goel v. Chandra Prakash Goel [AIR 2008 SC 1921], the Supreme Court emphasized that knowledge and acceptance of terms is essential, which suggests that hidden or passive terms may not be binding.

Shrink-Wrap Agreements: These are commonly used in packaged software and are accepted when the user opens or installs the product, which is seen as implied consent. While Indian courts have not dealt extensively with shrink-wrap contracts, they are likely to apply the same standards as in click-wrap agreements—i.e., whether the user had reasonable notice of the terms and the opportunity to reject them.

Courts have insisted that for an agreement to be binding, the party must have knowledge of and agree to the terms. In Shakti Bhog Foods Ltd. v. Kola Shipping Ltd. [(2009) 2 SCC 134], the Supreme Court reiterated that there must be a "meeting of minds" and not just mechanical execution. Further, in Pee Aar Securities Ltd. v. SEBI [(2013) 10 SCC 117], the Court held that terms in a standard contract could be struck down if they are unreasonable or unfair, especially in situations where the bargaining power is unequal.

As per Section 65B of the Indian Evidence Act, e-contracts stored electronically (like emails or PDFs) must be accompanied by a certificate to be admitted as evidence, unless the original device is with a third party, in which case courts have allowed flexibility as seen in Arjun Panditrao Khotkar (supra).