The pandemic has forced us to adapt to a new normal, where everything, from working to networking, has gone digital. In this changing environment, a large number of deals and documents are being signed remotely or digitally. At this point, it has become essential to understand the legality of signing documents digitally.
Generally, the words ‘E-signature’ and ‘digital signature’ are used interchangeably. However, the two terms are quite different. While E-signature is generally any electronic form signature, a digital signature is characterized by encryption and decryption function. A digital signature certificate also can be obtained by following the procedure laid down in the Information Technology Act.
So, even a scanned copy of an actual written signature would qualify as an E- signature but would not qualify as a digital signature. It can be safely concluded that E-signature is actually a wider term than digital signature since it also encompasses digital signatures. Hence, all digital signatures would be E- signatures but not vice versa.
Now, digital signature tends to be a safer form of signature as compared to E- signatures, since the chances of tampering and forgery are minimal. Therefore, it is advisable that generally, signing of documents digitally, with the help of a singing software like DocuSign or emsigner, is a safer option than relying on a scanned signature.
From the Indian law perspective, all types of E-signatures have been given legal recognition as valid forms of signature under the Information Technology Act. However, from an evidentiary perspective, any form of the electronic signature would have to be proved under section 65 B of the Indian Evidence Act, 1872. So from the evidentiary perspective, any E- signature, whether digital or a scanned signature, would have to pass the additional test of section 65B of the Evidence Act, 1872. From a practical standpoint, since a digital signature has a more watertight process of affixation, it would be easier to prove its authenticity than a scanned written signature.
The legality of the electronically signed document would also depend on the type of document that is signed. For example, for a pleading [like plaint, written statement etc.] which has to be filed the courts in disputes, the concerned court's rules would apply. For example, during the lockdown period, all urgent matters were filed electronically, and the courts accepted a scanned signature. However, for physical filings in courts, electronic signatures are not accepted since the document must be affirmed before an affirmation officer of the court or before a notary.
Therefore, the law prescribes certain requirements like notarization and/or registration cannot be signed digitally. Documents like conveyance deeds, gift deeds, power of attorney etc. which require compulsory registration under section 17 of the registration act, 1908 cannot be signed digitally, since in such documents the document has to be done before the Sub- Registrar.
The Companies Act in India has provided for digital signature certificates that are mandatory for signing board resolution and other filings with the MCA. With Digital India policy of the Government gaining fast traction and a large number of government services going digital, digital signatures will only evolve in the coming decade thereby giving rise to an evolution of the law surrounding it.