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[P.S: The political developments since last night in Tamil Nadu has thrown up some interesting elements which surprisingly lead to ITA 2000/8 and operation of Section 65 of ITA 2000/8 in the records of Apollo Hospital.  Following discussion is for academic purpose only and based on current developments as reported in the media.]

Recently, a case decision was brought to my notice which triggered a need to discuss the Jurisprudence behind application of Section 65 of ITA 2000/8 which I have often held is wrongly applied by police in many cases. Some advocates also have a difference of opinion in this regard and hence there is a need to clarify the position as I read it from the Act.

This is a decision of the Andhra High Court dated 29th July 2005 and concerns the criminal petitions filed by Syed Asafuddin and Ors vs The State of Andhra Pradesh for quashing of FIR filed under Sections 409, 420 and 120 B of IPC and Section 65 of ITA 2000 as also Section 63 of Copyright Act.

The Complaint was registered in respect of an alleged action by employees of Tata Tele Services to re-set mobile handsets given by Reliance Infocomm to its customers under a special scheme with service provider binding for three years.

The Service provider (Reliance Infocomm) had embedded a code in the handset that it could connect only to the designated Reliance network. It was alleged that Tata Tele employees assisted the customers of Reliance (who had purchased the handsets at a heavily discounted price with a commitment to stay on the Reliance network for a minimum of 3 years), to remove the restrictive code so that they could be used on other networks such as Tata Telecom.

Obviously, this caused a loss to Reliance and was against the letter and spirit of its contract with the customers who had availed the benefits.

The judgement  has thrown enough insights into whether the sections applied were sustainable or not and is therefore illustrative.

The point of contention in the case for our focus was whether Section 65 of ITA 2000 was the right section to have been applied or should it have been Section 66?.

No doubt the Court came to the conclusion that Section 65 was appropriate and did not agree to quash the FIR but its argument in coming to this conclusion appears faulty. However the decision is a decision and may be looked at as a “Precedent” until overturned.

We need to also keep in mind the fact that this was not the final trial but a decision related only on the quashing of FIR. We should not therefore jump to a conclusion that Section 65 is applicable in such cases in future.

In order to debate this further, section 65 of ITA 2000/8 is reproduced here for immediate reference.

Section 65: Tampering with computer source documents.-

Whoever knowingly or intentionally conceals, destroys or alters or intentionally or knowingly causes another to conceal, destroy, or alter any computer source code used for a computer, computer programme, computer system or computer network, when the computer source code is required to be kept or maintained by law for the time being in force, shall be punishable with imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with both.

Explanation.–For the purposes of this section, “computer source code” means the listing of programmes, computer commands, design and layout and programme analysis of computer resource in any form.

As regards Section 65 of ITA 2000/8, the critical aspects are

a) Whether some computer source code was concealed, destroyed or altered?

b) Whether the deleted “Computer Source Code” was required to be kept or maintained under law for the time being in force?

In the instant case, there was a “Source Code” that was “Altered or deleted” and hence there is no dispute on this.

However, the dispute is on the fact whether the deleted source code was in fact required or maintained by law for the time being in force or not.

If there was no need for the source code to be kept or maintained under law for the time being in force, then there is no offence made out under this section.  If so then an offence under Section 65 is made out.

(P.S: I am not ruling out the offence being recognized in this case  under Section 66 which  was not included in the FIR. I restrict my discussion only to the jurisprudence surrounding Section 65).

The accused here is Tata Tele. We need to ask “Was there any need under law for Tata Tele to keep the source code or maintain it for the time being”? . Obviously Tata Tele and Reliance had no privity of contract in this matter. If at all there was any obligation it would be in the contract between Reliance and the Customer. Tata Tele can also claim that they made the code alteration at the request of the Reliance customer.

Did the contract form between Reliance and its customer specify that the Customer was prohibited from making his handset compatible to other networks? and Was such a contract produced as evidence? …it appears that the answers to these questions are in the negative.

If you want to make the customer the “accused”, then “mens-rea” may need to be proved. It could be a civil wrong but would it be a criminal offence?…difficult to say.

Further this could be determined by the fact whether the customer was clearly informed (not through a standard form contract where a clause is buried in small print) that the handset which has been “Purchased” by the customer contains a “Hidden Code” and he is not to delete or alter the code. If he has not been informed , this could be a “Computer contaminant” introduced by Reliance as defined under Section 43 of ITA 2000/8 since this hidden code could be held as a code “that monitors whether the customer is using Reliance network or some other network”.

The interesting part of the judgement is in the interpretation of the section regarding the maintenance of the computer source code under law.

Firstly the judgement has tried to create an artificial wedge between “Kept” and “Maintained” and associating the words “under law” only with the word “Maintained” and not with the word “kept”. Accordingly, the judgement has considered that “When the computer source code is required to be kept” and “maintained by law for the time being in force” as two different situations.

Then, for no specific reason, the judgement continues stating  “going by the allegations in the complaint, it becomes clear that the second respondent (i.e: Reliance) is in fact maintaining the computer source code. If there is allegation against any person including the petitioners, certainly an offence under Section 65 of I.-T. Act is made out.”

Does the Judge mean that there was a need to maintain source code under law and it was deleted by the accused?. …it is unclear.

The Judge seems to have missed the point that what the section intends is that if any person including the petitioner or the respondent was required to keep the information for a certain period of time and it was deleted before such a time, then only the offence is made out and not otherwise. If the respondent is maintaining the code and the petitioner has deleted/altered it in another device, the offence cannot be imputed.

In our opinion there was no responsibility/obligation for Tata Tele, the accused under any “law” to maintain the source code. If such “law” could exist, it could be in the TRAI guidelines on use of ” Network bound handsets” which would bind all the licensed players under an obligation not to tamper with the codes of their competitors. There is no evidence of the existence of such a guideline nor was it quoted in the judgement.

In view of the above, without stating that what Tata Tele has done is correct and unpunishable, I would still consider that the view of the honourable Court that Section 65 was applicable in this particular case appears un-sustainable.

Also, from the facts of the case it appears that what might have happened could be that it is not a case of deletion of any data. It could be a case where a data piece was added to what was already present in the handset within the larger code set created by the handset manufacturer. Accordingly,  “An additional Code enabling acceptance of Tata Telecom network connection” might have been inserted without deleting the “Existing code enabling acceptance of Reliance network connection”. Hence whether this was a case of “Concealing, deletion or altering” of source code inserted by Reliance is itself doubtful.

The original source code on the handset was inserted by the handset manufacturer like Samsung and not Reliance. This was perhaps first modified by Reliance to delete acceptance by networks other than Reliance. Tata Tele might have then restored the handset to its original status. Hence there appears to have been lack of cause of action for Reliance to invoke Section 65 in this case. I would therefore not consider this judgement as a precedent to be followed.

Now coming back to what attracted my attention immediately to Section 65, is the fact that within all the political turmoil caused by the recent developments in Chennai, there has been an allegation by the TN Chief Minister (Present) that the medical records of J Jayalalitha might have been tampered with by the doctors who attended on her before and after her admission to Appollo Hospital. With this allegation, there is a public notice of a potential cognizable crime. Hence any and  all evidence  that could have a bearing on the offence becomes “Evidence” that needs to be preserved for the time being under IPC.

Since it is expected that Appollo Hospital has all records in electronic form and there should be several e-mail and video conference records at Apollo including the interaction with the London based doctor, all these evidence will be “Electronic Evidence” and if they are deleted because they may be incriminating to the interests of either the accused persons or even Appollo Hospital itself, we will have a possibility of a Section 65 offence being committed by Appollo Hospital and others. 

If there is any Commission of enquiry appointed for the investigation there is a possibility that the hospital may refuse to provide any evidence since they would have been deleted. It is therefore imperative for Mr Panneer Selvam or any Court in TN to immediately order for securing the evidence that may be present in connection with this suspected offence and also give a notice to the hospital that Section 65 would be invoked if the information is wrongfully deleted.

Naavi

Today, people swear by the term “Innovation”. Whether it is the Budget Speech or a Chairman’s speech in AGM, the buzz word is “Innovation”.

However people who actually innovate often wonder why some thoughts get the tag of innovation and some fail to.

Today, I saw a report in Times of India that in Bangalore the BBMP may issue “Property ID Cards” for every property. (See Report here).

This reminded me of the exact proposal I had made to BBMP long long time back which was then not appreciated.

I was also reminded of an article titled “The National ID Card Challenge for Nandan Nilekani.. Part I : Part II : This should have been a sensational news when presented but did not attract the attention of any.

As of today, people need to appreciate the idea of property ID as presented by BBMP as “innovative” and welcome it.

But it is necessary to point out that more than 10 years back, this proposal was made by the undersigned as part of the implementation of the “DVIIS” or the “Digital Value Imprinted Instrument System” (Refer this 2003 post). The concept was subsequently put to suggested harnessing in the name of “ZeMo” cards or “Zero Memory Smart Cards”

The concept was a universal concept with use cases in “Citizen Identity”, “Digital Stamps”, “Prepaid Cards”, “Air and Bus Tickets”, “Digital Cheques”, and several other instances including “Property IDs”.  The idea was discussed with several Government agencies including the BBMP officials and Banks. Several of the IT companies some of whom are today MNCs and claiming to be “Innovators” could not appreciate the worth of the suggestions despite explaining of the entire concept in clear terms. If I check my e-mails, many of the “Who Is Who leaders” of today are people who could not see the potential of the innovative idea which today is seen in every IT project including the Aadhaar Card and Digital Payment Systems.

I still remember that Stock Holding Corporation was in the verge of implementing their Digital Stamps system at that time and when our solution was presented to them (see here the basic concept) we were told, “We would have taken up your solution but one of our executives has given a promise to another vendor”. The Karnataka Government of that time had also been approached and did not perhaps understand the benefits.

Companies like Cognizant considered the ideas in the Banking product area for some time but again was unwilling to pick it up as a product and wanted to consider it only if some Bank could give them the project. Banks of course were not capable of themselves taking a decision on a disruptive idea unless it is presented to them by a large IT company. Neither the Government agencies nor the senior IT executives of that time had the ability to understand and appreciate the thought and convert it into a commercial products though the undersigned had not placed any IPR barriers.

It is amusing that 13 years after the idea was first published, we are seeing that one by one all the use case instances of Digital Value Imprinted Instrument System and the “ZeMo Cards”.

Probably some of the suggestions I am discussing now will be considered “Innovative” 10 years down the lane.

I wonder if a 10 year old idea is “Innovative today” what was it 10 years back?.

……………Probably we should call it “Futuristic”? or “Innovation too early for the time?”

It is therefore necessary for Innovators looking for success to understand that even if an innovation is considered a “Disruptive Innovation”, it will only get recognized if the society is mature enough to understand the disruptive nature of the idea.

Otherwise it is necessary to wait until the society matures to a level when your “Too early to understand idea” is recognizable as “Disruptive and Innovative”.

But the thought lingers on….

If an innovative disruptive thought of today is a potential winner backed by venture capitalists and policy makers, should they not be mature enough to understand that a “Futuristic idea” which may become disruptive and innovative over a time is also a “Potential Winner” probably at a higher scale?

Even if they are not mature today, I hope they will mature in time when they reflect, “How Did I miss to recognize and back this innovation when this was presented  10 years back?”

With this positive thought, I urge “Futuristic innovators ”  to continue to do what they know best…

“Ignore the current appreciation or lack of it, continue to innovate even if it takes another decade for the society to understand and appreciate”

Naavi

This is a continuation of the discussions on the Watal Committee Report

Encouraging increased use of electronic modes of transactions was one of the objectives pursued by the Watal Committee. In this direction the committee considered the transaction cost structure  involved in the use of cards where the acquiring Bank collects MDR, (Merchant Discount Fee/Rate) pays interchange fee to the card issuing bank and the scheme fee to the scheme owner such as Master or Visa. In the present scheme MDR is 0.75% for transactions less than Rs 2000 and 1% for transactions above Rs 2000.

There is no MDR cap in Credit Cards where the charges made by the industry may be around 1.5% to 2.%

In high margin transactions,  it is possible for the merchants to absorb this cost though many donot. In some transactions where the margin in the business is low, say less than 5%, this MDR becomes a substantial part of the business margin and it would be unfair to expect it to be borne by the Merchant.

It was one of the recommendations of the Watal Committee that  there has to be a parity between cash and digital payments (R6-to be implemented within 3 months).

This rules out the possibility of the consumer being charged the MDR fee separately by the merchant. The consumer makes payment for the services in a legal tender which is cash or an alternate method which is digital payment using a Card or a Mobile Wallet or an UPI type system.

In the case of UPI or USSD system, the only intermediary involved is the NPCI apart from the two Banks. In such transactions the transaction cost can be fully absorbed by the system without being passed on either to the Merchant or the consumer.

In the event a Debit/Prepaid Card is involved, the card issuing Bank should waive its charges since use of cards in preference to cash is a direct benefit which they enjoy with a lowering of the footfalls in the Bank/ATM and the avoidance of the cash inventory cost.

The “Debit Card” is a part of the account opening and represents the balance in the account. The debit card issuing Banks therefore should not charge separately for transactions with the use of debit cards. RBI should strictly mandate that no such transaction charges should be levied on the acquiring Bank or the customer.

The involvement of scheme managers should also be eliminated here with the substitution of NPCI as the gateway as in the RuPay cards.

The cost of the card itself is a one time cost and most banks are charging it to the customer. As long as this is reasonable, this may continue.

The ATM withdrawal charges are a “Disincentive” for cash withdrawal and as long as the Debit/Prepaid card transactions are waived off, the present system of a reasonable charge for the number of ATM transaction exceeding a minimum number of say one per week, may be tolerated.

Banks s do incur a cost for authentication of transaction for which they may engage the services of outsource agents. However this is part of the “Cost of Banking” and just as a Bank cannot separately charge  extra fees because one ledger clerk enters the debit entry, one officer verifies your signature and a cashier makes the payment of cash, they should not be allowed to charge the authentication services such as OTP verification or VBA authentication to the customer.

The bottom line is that the “Interchange charges” should be eliminated in the case of Debit or Prepaid Cards.

Further, ensuring “Safe Transactions” is part of the Banker’s obligations and hence all transactions through the debit/prepaid cards should be insured against frauds and transaction failures at the cost of the Bank.

As regards Credit Cards, it is a separate contract where the Bank agrees to provide a credit line to the customer and once a credit line is approved, there should be no difference between a debit card/Prepaid card and the Credit Card.

Banks may therefore charge a Credit Approval Charge and Basic card cost. As regards the transaction cost, in the event the credit line is utilized, the card holder pays interest charges which are always usurious. Hence the issuing bank gets adequate reward by way of interest. Probably they could charge a “Commitment Charge” for those who use the card but does not avail the credit line. This commitment cost can replace the transaction cost so that the “Interchange charge”.

In view of the above, the “Interchange charges” can be eliminated even in the case of Credit cards so that at the merchant level, he could be neutral as to whether the consumer presents a Credit Card or a Debit Card or a Prepaid Card in lieu of currency.

The acquiring Bank and the scheme provider may be entitled to some reward for their services, depending on the services rendered.

Some acquirers provide POS machines free of charge and they are entitled to recover their cost either as one time fee or per transaction fee. However, since the cost they incur is fixed, there is no reason why they should be allowed to make unreasonable profits by endlessly collecting transaction fee.

There can therefore be a cap on the MDR charges payable to the acquiring Bank.

Today since the interchange charges are a substantial part of the MDR, elimination of this should bring down the MDR charges from the current levels of 0.75% or 1% to around 0.4 to 0.5%.  If a cap is placed on the MDR fee of the acquiring Bank, then the total MDR can be brought down further based on the turnover of the merchant in terms of number and volume of transactions to even around 0.1% at which every merchant including the petrol bunks should have no problem in accepting cards of any type.

Again there could be a transaction based insurance cost which can be a reasonable load at around o.05% .

This leaves the scheme owners like the VISA or Master who are an overhead on the system.  VISA and Master do not take any credit risk and except for providing international acceptability which is required only for those who need to use their cards on international channels (which may include online transactions), they are not of much value for other transactions except as a transaction gateway.

If NPCI can take over issue of RuPay credit cards, then the need for VISA and Master or AMEX can be further reduced and hence their cost can also be eliminated. Those who need to use their cards for foreign merchants who donot recognize NPCI as the scheme owner,  may use”Virtual/Prepaid cards” with VISA/Master branding.

There is therefore a good scope for

a) Elimination of Interchange charges of the card issuing Bank for Debit and Prepaid Cards

b) Elimination of Interchange charges for Credit Cards which may be substituted by a “Credit Approval Charge” and “Monthly/Annual Commitment charge” for those who use a credit card only for the free credit it provides within a billing cycle.

c) Elimination of the Scheme Charges by NPCI stepping in to replace VISA/Master/AMEX

d) Reduction or elimination of the acquiring Bank charges by replacing it with one time instrument cost

e) Introduction of Cyber Insurance for all transactions for which Banks should bear the major responsibility.

Following the Committee’s report, RBI has reduced the MDR for Debit Cards to 0.25% for transactions upto Rs 1000 and 0.5% between Rs 1000-2000.

There is however a lot more that RBI can do and whatever is discussed above is within the powers of RBI and NPCI. However it would be resisted by the Banks since it may hurt their revenue potential. Presently Banks are used to counting their profits without assuming responsibility even for frauds and using their clout to prevent RBI from introducing consumer safety measures. It is time to put an end to such unfair business practice in Banking by RBI asserting its regulatory role and powers.

Banks may submit a cost benefit analysis to RBI to justify the charges if they think that the suggestions for complete elimination of the interchange charges and the reduction of the acquiring bank cost is unreasonable.

The arguments presented above for elimination of charges for card transactions equally apply to the other mobile apps such as wallets and UPI and there should be no reason for any charges to be applied for such transactions whether the services are privately owned or not.

These suggestions are important since it is in the interest of the Government that Cash usage is reduced in the economy and it is in a way forcing the Citizens to adopt tot his new Digital payment ecosystem. Government cannot force their citizens to adopt to currency replacement without protecting them from additional cost and fraud risk.  Hence we believe that Government would be interested in pushing such suggestions.

In the above suggestions, it has been assumed that NPCI does not become greedy on its own and try to introduce its own charges. It should be considered as an “Infrastructure”  created by the Government for the efficient administration of the “Cash Less or less Cash” society for the larger good of the country.

NPCI should therefore be funded by the Government. At no point of time in the future also, NPCI should turn into a commercial organization like many other infrastructure organizations such as BSE.

Naavi

This is the continuation of our discussion on the Watal Committee report on digital payment system in India.

It is not common for Committees set up by Government first of all to complete its work within the allocated time. Most Government committees extend their life by delaying the submission of their reports so that they can continue to enjoy the privileges attached to the committee for their functioning.

However it is heartening to note that this trend is changing in the Modi regime. We need to appreciate the Watal Committee set up last August for changing the trend and submitting its recommendations much before the time of one year that was set for it. The committee has responded to the changing needs following the demonetization and submitted its report far ahead of its tenure.

What is also noticeable is that the Committee has put in several recommendations and suggested a time line even for the implementation of these recommendations.  This is a tradition which needs to be taken note of and appreciated.

Now that the Budget proposals for the next year has been placed before the Parliament, there was a reflection of the Watal Committee recommendations even in the Budget speech of the Finance Minister when he reminded of the proposed revision of the Payment and Settlement Systems Act 2007, promotion of digital payments within the Government service, incentivisation of digital payments  etc in the Budget speech.

We can take a look at the different time lines suggested by the committee for its different suggestions.

One of the first tasks that was scheduled to be completed was “Development of Metric for Digital Payment”. The committee recognized that there is a need to measure the progress of digital payments and expected that within 2 weeks from the publication (December 9, 2016) of the report RBI would come up with the comprehensive metric to quantitatively measure and monitor the enhancement of digital payment services in India.

It appears that RBI has so far been able to come out with payment system indicators only upto November 2016. The data is still a compilation of the different aspects such as RTGS, CCIL operated systems, Paper Clearing, Retail Electronic Clearing, Cards, Prepaid Instruments, Mobile Banking, etc. The Watal Committee suggested that we need to develop clarity on what constitutes digital payment and develop a “Comprehensive Metric”. It appears that RBI is yet to come up with a solution on this.

As we have found recently in the measurement of the deposits of demonetized currency, where duplications of deposits between Banks created a difficulty in assessing the real amount of currencies returned, even in the digital payment systems, there would be difficulty in collecting the details avoiding duplication.

Amongst the digital payments there would be some which touch the Bank accounts and some which donot. For example I may transfer money from my Bank account to my PayTm account This is a digital transaction that touches the Bank system and can be measured accurately by RBI with information from the Bank by assigning the transferee code to all RTGS/NEFT/IMPS/UPI/BHIM/USSD payments and receipts.

However when I use PaytM to pay my Uber bill, it completes the life cycle of the money which I loaded to PayTM but does not touch the Bank.

When I transfer money from one PayTM  account to another PayTM account, again the transaction does not touch the Bank.

When I make payment to Uber or transfer to another PayTm account, it extinguishes the life cycle of my PayTm load, but it starts the life cycle of the next PayTM load of the person to who I made the payment. These are different transactions that will have impact on the economic activity and needs to be tracked.

Therefore there is need to assign tracking codes for all payment types from the mobile wallets if we need to track them.

Those transactions that are cleared through the NPCI can perhaps be tracked with appropriate codes being inserted to the transaction based on the source and destination. But mobile wallet transactions are also cleared through private payment gateways. Here it becomes difficult to track the origin and destination of transactions that take place within the system of private digital systems. Only those which touch the Bank accounts at the destination comes to the notice of the RBI.

Similarly, when I transfer money from Paytm to PayU it becomes a “Inter-Wallet” transaction that does not touch the Bank.

Hence RBI will be able to monitor only transactions that start and end with the banking system.

If this system needs to be changed, it will take effort and a review of many private gateway systems where authentications and settlements take place. I am not sure if this can be accomplished quickly. Perhaps we need to build a transaction reporting system making use of the “Block Chain technology” to effectively monitor the system.

In the meantime, RBI can monitor movement of digital money “From Banking system to the Private Digital Money Network” and “From the Private Digital Money Network to the Bank”. This data will perhaps be reilable and will be an economic indicator of how the “Non Bank Digital Money Network” is expanding.

Within each “Private Digital Money Service Provider” (PDMSP) the number of transactions and value can be tracked by tracking the transaction processing data which is normally handled by a handful of IT Companies providing the back end services. The list of such Private Digital Money Service Provider is available with RBI since RBI authorizes such activities (Refer here). If each of these Service Providers submit periodical data of transactions processed and we de-duplicate the transaction between these companies and the Banks who report directly to RBI, then we will have a reliable indicator of the digital money transactions in the country.

When money is transferred from one Bank account to another Bank account of the same person or one Wallet to another wallet of the same person, the transaction should be considered as a “Transfer” transaction and should be taken out of the over all counting though it may be recorded as a “Contra” entry for statistical purpose and for fraud monitoring purpose.

In the above discussions, I have used the Bank account as the basic indicator of the money repository. In due course when every Bank account is tagged to a mobile or an Aadhaar, we may consider the possibility of using either the mobile number or Aadhar as the fundamental tracking element instead of the bank account. However even here there could the problem of multiple Bank accounts which are linked to the same mobile number or Aadhaar number.

The ultimate solution for tracking may be only in the use of “Blockchain technology” where every element of digital currency is associated with some wallet and every transfer is entered into a block chain register. In that scenario, each Bank account will also be a digital currency wallet and cash holding will be reflected as a “Personal Wallet”. The aggregate of the “Personal Wallet balances” will be the total currency in float as we now define. This may however require another major change of monetary policy bigger than the demonetization and perhaps is left for the post 2019 Modi regime.

These are some random thoughts that are put forth for consideration.

The suggestion of use of “Block Chain Technology” is a more comprehensive but complicated suggestion that needs to be developed further.

Comments are welcome.

Naavi

The progress in technology particularly in the field of medical implants has been very impressive. Today “Techno Medical Experts” speak of , Smart Contact Lenses, Phrenic Nerve Stimulation, Glucose Biosensors, Cochlear Implants, Pace Makers and Cardioverter Defibrillators, Bladder Implants etc.

What these implants mean to an ordinary person is that many of the life critical aspects of the human body can be controlled by these implants which run on electronic signals. Such implants can also influence and control what we see and what we hear and perhaps what we touch and sense.

At the same time Cyber Security observers will also realize that if any of these implants can be hacked, then just like the Smart Cars, Smart Bodies can also crash.

These doubts are no longer the fancy imaginations of film and TV serial makers. Recently US FDA confirmed that Cardiac implants from St Jude’s are hackable. (See here).

It is also informed that St Jude has developed software patches to fix vulnerabilities for which the patients need to plug in to the transmitter and “Update” their “body”. It is scary how the patient would feel when he connects to the transmitter and decides to switch on the upload of the patch. Will he upload a patch from a reliable St Jude source? or will he upload a virus?” Is the patch “Digitally signed”? could be some of the thoughts that may be going through his mind. It would have been better if the Company had recalled the patients to their official labs and uploaded the patches in their ICU rather than let the patients sit in their homes and update the patch.

The incident highlights how “hackable” IT devices are placing our life at risk and should be an eye opener for the technologists not to neglect security in any electronic instrument whether they control the life critical human body functions or the financial transactions or any other activity.

Users need to be “Smart” about Security before they embrace the new “Smart Technologies”.

Naavi

Section 65B of Indian Evidence Act (IEA)is one of the hot topics discussed in Techno Legal Circles today. Though Naavi has clarified his view on the section many times on this site and in workshops and conferences, there are continued questions that linger on because some of the legal professionals hold some different point of view in respect of some of the finer points of the discussion.

One such doubt often raised is “Who should provide the Section 65B certification?”.

The supplementary questions that arise in this context is …

“Is it that the Admin of a server in which an electronic document is present the person who has to provide the certification?”

For example,

is it not the admin of Airtel who has to provide the Sec 65B certificate for the call data records?

Is it not the admin of flipkart who has to give certificate in respect of an electronic document pertaining to a sale on its site?.. “

“Now that Section 79A accredited Digital Evidence Examiners are being appointed, should all future Section 65B certificates signed by one of them?”…. and so on

I wish to clarify my point of view once again in this respect so that there is clarity in all stake holders in this regard.

I must add here that I have been in the forefront of Cyber Laws since 1998 and has been encountering  Section 65B-IEA since a long time. The very first instance (2004) when a Section 65B-IEA was successfully invoked was the historically important case of The State of Tamil Nadu Vs Suhas Katti in which conviction happened for the first time in India under ITA 2000. In this case, I had presented the critical evidence of crime which was an electronic document present on the Yahoo server based on which the trial was conducted, offence recognized and accused convicted. I was also examined as an “Expert Witness” and cross examined in the case before the Court accepted the evidence. Since then, documents certified by me have been produced in many Court proceedings and must have been used in many civil proceedings. The service www.ceac.in specializes in this aspect of rendering electronic documents as evidences in an “Admissible” form in a Court. In a few cases, I have been asked to personally be present to identify the documents and in other cases, this has not been found necessary.

In the light of all the past experiences I would like to clarify on the point of “Who has to Certify under Section 65B”.

The first point we need to understand is that Section 65B indicates the manner in which electronic documents can be converted into “Computer Outputs” such that the “Computer Outputs” will be admissible as per the special provisions under Section 65A of IEA applicable to “Statement contained in Electronic Form”  defined in Section 17 of IEA.

The “Computer Output” referred to in the Section 65B can be in two forms namely “Printed on Paper” or “Copy on a Media”. If printed on paper it is to be signed. If rendered as an electronic copy, it has to be digitally signed.

To understand  “Who has to sign”? one needs to understand that what Section 65B refers to is to the process of creating the “Computer Output” and not the process of “Creating the Electronic Document which is the subject matter of the computer output”.

The “Original”  “Electronic Document” is a “Binary” document which human beings are unable to understand and can be seen or heard or seen with the assistance of a combination of tools such as the Application and the Operating System running on a hardware of a computer. Hence the “Electronic Document” needs to be appreciated by a Court only in a form which is the end result of many of the processes such as conversion of binary document to a humanly perceivable form on a computer device. However, such a “Humanly perceivable form” sits on a computer and cannot be always brought into the Court room. Even if it is brought, the Judge has to view it and form his opinion and if he incorporates his observation on the document, he will be a witness himself.  (The hard disk in which a binary document resides is only a container and not the electronic document itself and has to be connected to a computer device to know what it contains).

The presence of Section 65B enables the Judge to avoid being a witness himself by introducing a role to the Section 65B Certifier who brings the binary electronic document to an “Admissible” form by creating a “Computer Output” as envisaged in the Section. Even after this, if there is a dispute, then it is open to the Court to call a Section 79A recognized “Digital Evidence Examiner” to assist it in resolving the disputed electronic document.

If as some professionals suggest, it is necessary for the “Admin of a Server in which the document is contained” to provide the Section 65B certificate, then a situation would arise where if there are 1 lakh transactions that pass through Flipkart each day, any dispute arising out of these 1 lakh transactions involving multiple electronic documents will all have to be certified only by the admin if required for evidence. Obviously this is neither feasible nor is the intention of Section 65B.

While the admin who can view the electronic document on the server or any other hardware or software to which he has an access may provide the certified copies, it is not always necessary.

The purpose of Section 65B is to enable “Any Contractually Capable person who knows how to view (or hear) an electronic document to present a copy (printed or on an electronic media) which can be admitted in the Court as also a “document” “without further proof or production of the original”. It is that person who prepares the Section 65 statement in which he says “I viewed this document and converted it into a computer output and I certify …..”.

Hence  a “Third Party” can provide a “Section 65B Certified Copy” for admission.

In practice, the person who provides the certificate should be a “Trusted Third Party” who may be cross examined by the defense which may state that the person is unreliable, is either not capable of understanding what he is certifying and is dishonest and produced a false certificate etc.” The Section 65B certificate incorporates a declaration as to the “Procedure adopted for producing the computer output” which should indicate the manner in which any other person following similar process should be able to reproduce the same “Computer Output” except in circumstances where the original binary document has been removed.

The credentials of the person producing the Section 65B certificate becomes critical to the acceptance of the certified copy by the Court.

In the case of “Forensic Experts”, the experts use certain tools and are able to see information which are visible only on use of such tools. Hence their certificate needs to indicate the tools used which to the extent possible be “Standard Tools” capable of being used by other “Forensic Experts”. It is when there is a propritory  technique is used that the need for the Court to call in another expert who is accredited under Section 79A arises.

We need to reiterate in this context that it is not necessary that all Section 65B certificates are to be issued only by the Section 79A certified agencies. Section 65B certificate is issued for “Admissibility” while the Section 79A certified agency is called in by the Court on special circumstances only. It is like the case of a “Handwiring expert” who is called in from time to time to examine the signatures on documents presented in the Court but not mandatorily for all handwritten/signed documents.

I hope professionals in the field appreciate this point of view and if they agree should adopt it in their practice. In case they have any counter views, I welcome the feedback so that this view can be refined as required.

Naavi

Also Read: Other articles on Naavi.org

P.S: Add on following another request for clarification: Please see comments section