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CMA Foundation · Fundamentals of Business Laws and Business Communication · E-Contracts and E-Signature - Meanings and Requirements

Trustline Secure Ltd. holds a licence granted under Section 21 of the IT Act, 2000 to issue electronic signature Certificates. It plans to sell the licence to Nexa Certs Pvt. Ltd. What is the legal position?

The licence cannot be sold. Under Section 21(3)(b) of the IT Act, 2000, a licence to issue electronic signature Certificates is not transferable or heritable. Notice to the Controller or consent of subscribers does not make a transfer valid.

  1. AThe licence can be sold freely with notice to the Controller
  2. BThe licence can be transferred only to a company
  3. CThe licence is not transferable or heritableCorrect
  4. DThe licence can be transferred only with the consent of the subscribers

Explanation

Section 21(3)(b) states that a licence granted under the section shall not be transferable or heritable. A sale to Nexa Certs would therefore not be permitted, and notice to the Controller or subscriber consent does not change this.

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