Digital Signature Compliance Under It Act

16 Jan 2026 --
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Digital Signature Compliance under the Information Technology Act, 2000

1. Legal Recognition of Digital Signatures

The IT Act gives legal validity to:

Electronic records

Digital signatures / electronic signatures

A valid digital signature = same legal effect as handwritten signature.

2. What is a Digital Signature?

A digital signature uses:

Asymmetric cryptosystem

Private key (signing)

Public key (verification)

Digital Signature Certificate (DSC)

It ensures:

✔ Authentication
✔ Integrity
✔ Non-repudiation

3. Legal Provisions Governing Digital Signatures

Provision	Purpose
Section 3	Authentication of electronic records
Section 3A	Electronic signatures
Section 5	Legal recognition
Section 15	Secure electronic records
Section 16	Secure digital signatures
Controller of Certifying Authorities (CCA)	Supervises CAs

4. Compliance Requirements for Companies

A. Use of Licensed Certifying Authority

Digital signatures must be issued by a licensed CA.

B. Secure Key Management

Company must ensure:

Private keys not compromised

Controlled access

Secure storage

C. Use in Statutory Filings

Mandatory in:

MCA filings

Income tax filings

GST returns

SEBI disclosures

D. Record Integrity

Electronic records must be maintained without alteration.

E. Revocation & Expiry Management

DSC must be revoked if compromised

Expired signatures invalid

F. Employee Use Controls

Where employees sign on behalf of company:

Authorization records

Role-based access

5. Legal Effect of Digital Signatures

A properly affixed digital signature:

Binds the company

Creates enforceable contracts

Valid for evidence in court

6. Risks of Non-Compliance

Violation	Consequence
Forged digital signature	Criminal liability
Compromised key	Invalid transactions
Unauthorised use	Corporate liability
Failure to secure system	IT Act penalties

7. Key Case Laws on Digital Signatures & Electronic Records

Case 1: Anvar P.V. v. P.K. Basheer (2014)

Held: Electronic records must meet statutory standards.
Principle: Authenticity of digital evidence critical.

Case 2: Arjun Panditrao Khotkar v. Kailash Kushanrao (2020)

Principle: Electronic evidence integrity requirements reaffirmed.

Case 3: Trimex International FZE v. Vedanta Aluminium (2010)

Held: Contracts formed electronically are valid.
Principle: E-communications can create binding contracts.

Case 4: Shafhi Mohammad v. State of Himachal Pradesh

Principle: Admissibility of electronic records requires procedural safeguards.

Case 5: State of Maharashtra v. Dr. Praful B. Desai

Principle: Technology-enabled processes legally valid.

Case 6: Gujarat Urja Vikas Nigam v. Essar Power

Principle: Electronic communications in corporate transactions enforceable.

Case 7: Global Reference — Adobe E-Signature Litigation Trends

Principle: Digital authentication creates enforceable obligations.

8. Corporate Digital Signature Governance Policy Should Include

Area	Policy Element
DSC issuance	Authorized personnel only
Key storage	Secure hardware/token
Revocation process	Immediate action
Logging	Signature activity logs
Audit	Periodic compliance review

9. Legal Principles

Principle	Meaning
Functional equivalence	Digital = physical signature
Authentication	Identity verification
Integrity	Record must remain unchanged
Non-repudiation	Signer cannot deny
Accountability	Company liable for use

Conclusion

Digital signatures are:

Legal identity tools + contract authentication mechanism + compliance requirement

Poor governance over digital signatures can invalidate transactions and create civil + criminal exposure.