Q1.

Explain the mechanism of a Digital Signatures which is recognized under the

Information Technology Act, 2000 and state at least two (2) of its applications.

A digital signature is a mathematical technique used to validate the authenticity and integrity
of a message, software or digital document. As the digital equivalent of a handwritten
signature or stamped seal, a digital signature offers far more inherent security, and it is
intended to solve the problem of tampering and impersonation in digital communications.

Digital signatures can provide the added assurances of evidence of origin, identity and status
of an electronic document, transaction or message and can acknowledge informed consent by
the signer.

IT Act Provisions Related to Digital Signature

Section 3 of IT Act, made the provision for it as: Authentication of electronic records.-

(1) Subject to the provisions of this section, any subscriber may authenticate an electronic
record by affixing his digital signature.

In IT Act, chapter 3 related to electronic governance, sections 4 and 5 are quite relevant.

Section 4 made the provision for Legal recognition of electronic records — where any law
provides that information or any other matter shall be in writing, typewritten or printed form
then not-withstanding anything contained in such law, given requirement shall be deemed to
have been satisfied if such information or matter is—

(a) rendered or made available in an electronic form; and

(b) accessible so as to be usable for a subsequent reference

Section 5 Legal recognition of [electronic signatures] — where law provides that information
or any other matter shall be authenticated by affixing the signature or any document should
be signed or bear the signature of any person then, notwithstanding anything contained in
such law, such requirement shall be deemed to have been satisfied, if such information or
matter is authenticated by means of [electronic signatures] affixed in such manner as may be
prescribed by the Central Government.

Authentication - In a virtual world, when you receive a sensitive file, and it's of crucial
importance to know that the information in that file has been unaltered. You would want to
make sure that it came from the intended person. In other words, you would need digital
signatures to authenticate the source of messages.

Digital signature technology requires all the parties to trust that the individual creating the
signature has been able to keep their own private key secret. If someone else has access to the
signer's private key, that party could create fraudulent digital signatures in the name of the
private key holder.
How to create a digital signature:

To create a digital signature, signing software -- such as an email program -- creates a one-
way hash of the electronic data to be signed. The private key is then used to encrypt the hash.
The encrypted hash -- along with other information, such as the hashing algorithm -- is the
digital signature.

The reason for encrypting the hash instead of the entire message or document is that a hash
function can convert an arbitrary input into a fixed length value, which is usually much
shorter. This saves time as hashing is much faster than signing.

The value of a hash is unique to the hashed data. Any change in the data, even a change in a
single character, will result in a different value. This attribute enables others to validate the
integrity of the data by using the signer's public key to decrypt the hash.

Application of digital signatures:

Industries use digital signature technology to streamline processes and improve document
integrity. Industries that use digital signatures include:

Government - The U.S. Government Publishing Office publishes electronic versions of

budgets, public and private laws and congressional bills with digital signatures. Digital
signatures are used by governments worldwide for a variety of uses, including processing tax
returns, verifying business-to-government transactions, ratifying laws and managing
contracts. Most government entities must adhere to strict laws, regulations and standards
when using digital signatures.

Healthcare - Digital signatures are used in the healthcare industry to improve the efficiency
of treatment and administrative processes, to strengthen data security, for e-prescribing and
hospital admissions. The use of digital signatures in healthcare must comply with the Health
Insurance Portability and Accountability Act of 1996 .

Manufacturing - Manufacturing companies use digital signatures to speed up processes,

including product design, quality assurance ,manufacturing enhancements, marketing and
sales. The use of digital signatures in manufacturing is governed by the International
Organization for Standardization and the National Institute of Standards and
Technology Digital Manufacturing Certificate.
Q2. Explain in details two (2) real-life instances of Anti-Competitive Agreements which
have been prohibited by the Competition Commission of India.

SECTION 3 OF COMPETITION ACT:

The Act under Section 3(1) prevents any enterprise or association from entering into any
agreement which causes or is likely to cause an appreciable adverse effect on competition
(AAEC) within India. The Act clearly envisages that an agreement which is contravention of
Section 3(1) shall be void.

How to determine AAEC?

The Act provides that any agreement including cartels, which-

Directly or indirectly determines purchase or sale prices;Limits production, supply, technical

development or provision of services in market;Results in bid rigging or collusive bidding
Shall be presumed to have an appreciable adverse effect on competition in India

Proviso of sec 3 of the act provides that the aforesaid criteria shall not apply to joint ventures
entered with the aim to increase efficiency in production, supply, distribution, acquisition and
control of goods or services.

The two (2) real-life instances of Anti-Competitive Agreements which have been
prohibited by the Competition Commission of India are:

1. Shri Shamsher Kataria v. Honda Siel Cars India Ltd. & Ors- Important case law
on Anti-competitive Agreements
In the case of Shri Shamsher Kataria v. Honda Siel Cars India Ltd. & Ors3, the concept of
vertical agreements including exclusive supply agreements, exclusive distribution agreements
and refusal to deal were deliberated by the Commission.

Facts– The informant in the case had alleged anti-competitive practices on part of the
Opposite Parties (OPs) whereby the genuine spare parts of automobiles manufactured by
some of the OPs were not made freely available in the open market and most of the OEMs
(original equipment suppliers) and the authorized dealers had clauses in their agreements
requiring the authorized dealers to source spare parts only from the OEMs and their
authorized vendors only.

CCI’s decision– The Commission held that such agreements were in the nature of exclusive
supply, exclusive distribution agreements and refusal to deal under section 3(4) of the act
and hence the Commission had to determine whether such agreements would have an AAEC
in India.

The Commission held the impugned agreements were in contravention of Section 3 of the
Act and remarked that the network of such agreements allowed the OEMs to become
monopolistic players in the aftermarkets for their model of cars, create entry barriers and
foreclose competition from the independent service providers.

The Commission further stated that such a distribution structure allowed the OEMs to seek
exploitative prices from their locked-in consumers, enhance revenue margin form the sale of
auto component parts as compared to the automobiles themselves besides having potential
long term anti-competitive structural effects on the automobile market in India.

2. Resale price maintenance

What is resale price maintenance?

It includes any agreement to sell goods on condition that the prices be charged on the resale
by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that
prices lower than those prices may be charged.

The concept of resale price maintenance was discussed by the Commission in the case of Fx
Enterprise Solutions India Pvt. Ltd. v. Hyundai Motor India Limited.

In the case, the Informant had alleged that according to the agreement with Hyundai, dealers
were mandated to procure all automobile parts and accessories from Hyundai or through their
vendors only. While collaborating on alleged anti-competitive practices of Hyundai, the
Informant stated that Hyundai imposed a “Discount Control Mechanism”,whereby dealers
were only permitted to provide a maximum permissible discount and dealers were also not
authorized to give discount beyond a recommended range, thereby amounting to “resale price
maintenance” in contravention of Section 3(4)(e) of the Act.

The CCI in the case observed that Hyundai through exclusive agreements and arrangements
contravened provisions of Section 3(4)(e) read with Section 3(1) of the Act through
arrangements which resulted intoResale Price Maintenance. The CCI while imposing penalty
of INR 87 Crore on Hyundai noted that the infringing anti-competitive conduct of Hyundai in
the case included putting in place arrangements, which resulted into Resale Price
Maintenance by way of monitoring maximum permissible discount level through a Discount
Control Mechanism and also a penalty mechanism for non-compliance of the discount
scheme.
Q3. Abhay and Seema have entered into a commercial agreement to license content.
However, Abhay did not deliver the content to the satisfaction of Seema. Hence, there
are disputes arisen between Abhay and Seema. Abhay and Seema do not want to go
through a protracted litigation process in Indian courts. Can you advise them on:

a. What should be done to conduct an arbitration between Abhay and Seema to

resolve their disputes?
Arbitration is a mode of ADR wherein the dispute between the parties goes through a process
to achieve an amicable resolution by an impartial third party known as an 'arbitrator,' without
recourse to litigation.

In the case of arbitration, the arbitrator, after reviewing the dispute between the parties comes
to a settlement. Such a decision taken by an arbitrator shall be binding on both parties. Unlike
other methods of dispute resolution, once the parties have submitted a matter to arbitration,
neither can withdraw from the procedure.

Arbitration can either be voluntary or mandatory. In the case of compulsory arbitration, the
parties to the dispute enter into Arbitration either under a statute, an order of the court, or
through a specific clause included in the contractual agreement between the parties.

Whereas on the other hand, in the case of voluntary arbitration, it is up to the discretion of
parties to enter into arbitration. The decision that results from the proceeding is known as an
'arbitral award.'

b. The difference between Arbitration, Conciliation, and Mediation? What is the

advantages and disadvantages of each of these?

 The difference between Arbitration, Conciliation, and Mediation are as follows:

Arbitration Conciliation Mediation
Neutral third Adjudicator Facilitator, evaluator Facilitator
party
Nature of the Legally binding Not legally binding Not legally binding
proceeding
Level of formality Formal Informal Informal
Level of Confidentiality as Confidentiality as Confidentiality based
confidentiality determined by law determined by law on trust.

 The advantages and disadvantages of each of These are as follows:

 Arbitration:
Advantages:
 1. Flexibility- Arbitration proceedings are flexible and more economically feasible
compared to litigation.
2. Time-Consuming- Arbitration proceedings occur at an expeditious rate as compared
to Litigation; therefore, it saves time for both parties.
3. Confidentiality- The disputes which are subject to arbitration are treated with privacy,
and are not released to the public.
4. Arbitrator- The parties have the liberty to choose an arbitrator to handle their dispute.
.
Disadvantages:

1. If arbitration is mandatory as per the contract between the parties, then their right to
approach the court is waived
2. There is a very limited avenue for appeals.
3. Arbitration does not provide for the grant of interlocutory applications.
4. Arbitration awards are not directly enforceable; they are executable subject to judicial
sanction.

 Mediation:
Advantages:

1. Parties have complete control over the settlement.

2. Less stress as compared to litigation and arbitration.
3. The relationship between the parties isn't overly damaged.
4. Mediation proceedings are confidential.
5. The process resolves the dispute quickly.
Disadvantages:

1. Since the decision is at the discretion of the parties, there is the possibility that a
settlement between the parties may not arise.
2. It lacks the support of any judicial authority in its conduct.
3. The absence of formality- Mediation proceedings are lacking in any procedural
formality since they are not based on any legal principle.
4. The truth of an issue may not be revealed

 Conciliation:
Advantages:

1. Flexibility: Since the conciliation process is informal, it is flexible.

2. The conciliator is often an expert in the disputed field.
Disadvantages:

1. The process is not binding upon the parties to the dispute.

2. There is no avenue for appeal.
3. The parties may not achieve a settlement to their conflict