Digital Stamping
Digital stamping is a process involving the secure payment of stamp duty online, also referred to as e-stamping, to legalize documents. Digital stamping is an alternative to physical stamping and since the process is still relatively new, customers are unsure about its legal validity.
So, is digital stamping legally valid in India?
The short answer is that there’s no short answer.
SignDesk’s digital stamping and franking product – stamp.it assists the stamping process in two different ways depending upon the availability of e-stamping in the states from which stamp papers are to be acquired.
These two processes and their legality will be addressed separately. This is how we’ll do it – the relevant steps of the workflow will be listed, and each step will be followed by a brief explanation of its legality.
Firstly, let’s go through the stamping workflow when e-stamping is involved.
1. The customer provides SignDesk with their stamp paper requirements and pays stamp duty online with our API. SignDesk then acquires the relevant e-stamp certificate.
Is this legal?
The Indian Stamp Act (1899) allows for organizations to procure stamp paper on behalf of customers. SignDesk procures stamp paper from government authorized vendors in the respective states.
2. The document that requires stamping is then relayed to SignDesk and inscribed with the unique identification number of the e-stamp certificate issued upon stamp duty payment for the respective document. This is done on every page of the document.
Is this legal?
This step is undertaken to comply with the Karnataka Stamp Rules 2009 (E-Stamping Rules) and to prevent misuse of the stamp paper by ensuring that it’s linked to the document in question.
3. The e-stamp certificate is inscribed with a legend bearing the particulars of the document.The legend will have the following form: “ This e-stamp paper forms an integral part of the [nature of instrument] dated [date of execution] executed among [name of first party] and [name of second party] “
Is this legal?
This is done to make sure that the certificate can only be used for the document that it was issued for, as per the E-Stamping rules.
4. The digital version of this document is made available to the customer along with a scanned copy of the e-stamp certificate. The document will be enforced through an electronic signature.
Is this legal?
The Information Technology Act 2000 (IT Act) and the Information Technology Certifying Authority Rules 2000 (CA Rules) allow for digital documents to be validated and subsequently enforced following eSignatures from both concerned parties.
Now, for the stamping workflow that does not involve e-stamping.
1. The customer provides their stamp paper requirements to SignDesk and pays stamp duty via API. We obtain stamp papers on their behalf.
Is this legal?
As explained before, the Indian Stamp Act (1899) permits this by allowing for organizations to procure stamp paper on behalf of customers. SignDesk procures stamp paper from government authorized vendors in the respective states.
2. The stamp paper is scanned and uploaded to a repository, a digital version of the relevant document is then merged with the stamp paper. These are made available to the client.
Is this legal?
As per the Indian Stamp Act, stamp papers simply serve as evidence that stamp duty has been paid and are required to be “used” in the agreement, this is why the stamp paper and document are merged. Additionally, according to the IT Act, digital documents are legally enforceable.
3. The document will then be enforced through Aadhaar-based eSign, subsequent to signing by the relevant parties.
Is this legal?
As per the IT Act, digital documents are legally enforceable through Aadhaar-based eSign.
4. The physical stamp papers are delivered to the client following consumption of the digital stamp papers.
Is this legal?
This complies with the Indian Stamp Act (1899) and is done so that the stamp papers can be produced in courts in case of a dispute.
As evidenced above, SignDesk’s digital stamping and franking solution is compliant with the Indian regulations for stamping and e-stamping. Our product – stamp.it also enables smooth and seamless workflow and documentation for businesses, especially in processes such as loan disbursement, vendor onboarding, and human resource documentation that require the validation of documents.
Now that its legality has been established, try out our digital stamping and e-stamping product and see how it can help your business.