Eavesdropping, are you?

We are living in the age of the elec-tronic medium and companies want to use the latest technologies in conducting their businesses. I was recently asked about the legal issues involved in holding company board meetings via videoconferencing/teleconferencing.

There is no specific provision that covers these areas. It is important to note that the Information Technology Act, 2000 does not over-rule the provisions of the Indian Companies Act. The IT Act, 2000 does not specifically deal with the issue of holding board meetings through videoconferencing/teleconferencing. However, since videoconferencing/teleconferencing involve the use of electronic records, the matter would be covered under the relevant provisions of the Information Technology Act, 2000. The IT Act states that notwithstanding anything contained in any law in force, wherever any law requires any information to be in the written or printed or typed format, then that requirement of law shall be deemed to be satisfied if the said information is rendered in the electronic format. Thus, the same provisions relating to minutes of a board meeting would be applicable in electronic format as well. 

Meanwhile, in cases where the minutes of a board meeting are required to be signed, the affixation of Digital Signatures under the Information Technology Act, 2000 will suffice. In addition, the minutes of board meetings in the electronic format, whether through videoconferencing or teleconferencing, would be admissible as evidence in a court of law provided, it is specifically proved in accordance with the provisions of the Indian Evidence Act as detailed in the Second Schedule of the Information Technology Act, 2000.

The legal position with regard to tapping and other means of manipulations in the field of videoconferencing/teleconferencing is an area that touches several complex legal issues in the Indian context. Since videoconferencing/teleconferencing basically gets done through the electronic format, tapping of the same may be permissible under law. Under Section 69 of the Information Technology Act, the Controller of Certifying Authorities has got the power to direct the interception of any information transmitted through any computer resource, including through videoconferencing/teleconferencing, if he feels and is satisfied that it is necessary or expedient to do so in the interest of the sovereignty/integrity of India, the security of the state, friendly relations with foreign states or public order or for preventing incitement to the commission of any cognizable offence.

Section 66 of the IT Act, relevant for hacking, can also be invoked in case of any tampering of electronic records relating to holding a company’s board meetings through videoconferencing/ teleconferencing. However, the IT Act, 2000 does not specifically deal with issues relating to tapping.

A majority of the companies want to hold board meetings through videoconferencing/teleconferencing in order to save time, money and energy. So, it would be prudent to expect the law to legally recognize such board meetings held through videoconferencing/ teleconferencing. The regulations, which the Government needs to make in this regard, must be simple, clear and easy to follow. They should not impose an undue burden upon the companies to follow long-winding procedures. Of course, the law must take into consideration the fact that unscrupulous elements would try to show board meetings happening through videoconferencing/ teleconferencing without them actually being held. Or else, they could tamper with the electronic records pertaining to the board meetings held through videoconferencing/teleconferencing, so as to materially change the nature of the decisions taken in the board meetings. Thus, the issue of tampering with electronic records of board meetings held through videoconferencing/ teleconferencing cannot be dismissed.

This is the time for India to act. If these enabling provisions are implemented, then they can be a good starting point for a lot of companies to hold board meetings through videoconferencing/teleconferencing. This is also likely to herald in an era of golden corporate e-governance.

The author is a cyberlaw consultant  and a practicing advocate at the Supreme Court of India