Scanned Signature vs. Digital Signature

What's actually admissible under India's IT Act & Evidence Act? A deep dive for SMEs facing the 'scanned PDF' dilemma.

In today's fast-paced business environment, the need for speed often leads to shortcuts. One of the most common? Scanning a handwritten signature and pasting it onto a PDF. It's quick, easy, and seems harmless. But when a dispute arises, is that 'signed' contract worth the digital paper it's written on? This article unpacks the critical legal differences between various electronic signatures under Indian law, revealing the hidden risks for businesses.

I. The Statutory Landscape: What the Law Says

The Information Technology Act, 2000 (IT Act) is the cornerstone of India's digital legal framework. It creates a two-tiered system: one that provides a low barrier for simple electronic contract formation to facilitate commerce, and another that sets a very high bar for secure, verifiable signatures that receive special legal status.

The Three Pillars of Digital Validity

• Section 4: Legal Recognition of Electronic Records. This is the bedrock. It states that if any law requires information to be in writing, that requirement is met if the information is in an electronic form and accessible for future reference.
• Section 5: Legal Recognition of Electronic Signatures. This provision gives legal equivalence to electronic signatures, stating that if a law requires a signature, an electronic signature that meets the Act's standards will suffice.
• Section 10A: Validity of Electronic Contracts. This is crucial for everyday business. It confirms that a contract cannot be denied enforceability just because it was formed electronically (e.g., via email or a 'click-to-agree' button).

II. The "Reliability Threshold": The Litmus Test for Secure Signatures

What makes DSC and Aadhaar e-Sign legally superior to a simple scanned image? They both pass the mandatory "reliability" test laid out in Section 3A of the IT Act. For any electronic signature to be considered reliable and secure, it must prove that:

A scanned signature fails these tests spectacularly, which is why it has such weak legal standing.

III. The Scanned Signature: A Legal House of Cards

Pasting a scanned signature is legally classified as a "Simple Electronic Signature." While Section 10A prevents the contract from being instantly void, it enjoys zero legal presumptions of validity. The entire burden of proof falls on the person trying to enforce it.

Why is it so weak?

• Not Uniquely Linked: The image file can be copied and used by anyone.
• Not Under Sole Control: Once created, you lose control over where the image goes.
• Alterations are Undetectable: There's no built-in way to prove the document wasn't changed after the signature image was added.
• High Risk of Forgery: Courts are highly skeptical of scanned signatures, knowing how easily they can be forged.

IV. The Gauntlet of Admissibility: Section 65B

Even if you have a signed document, it's useless if you can't get it admitted as evidence in court. For electronic records, this is governed by the strict rules of Section 65B of the Indian Evidence Act, 1872.

The Power of Presumption (Sections 85A, 85B & 85C)

This is the legal "superpower" of secure signatures. When you use a DSC or Aadhaar e-Sign, the Evidence Act grants you massive advantages:

• The court shall presume the signature is authentic and was affixed with the intent to sign.
• The court shall presume the document has not been altered since it was signed.
• The burden of proof shifts. The person challenging the signature must prove it's fake, which is nearly impossible.

For scanned signatures, this presumption does not exist. You have to prove everything from scratch.

V. The "Negative List": What You CANNOT Sign Electronically

The IT Act's First Schedule lists specific documents that are excluded from electronic execution and still require a physical, wet-ink signature. As of the latest amendment in 2022, this list includes:

• A will and any other testamentary disposition.
• A trust deed.
• A power of attorney (unless it's for a regulated financial entity).
• A negotiable instrument like a promissory note (unless it's a cheque, DPN, or Bill of Exchange for a regulated entity).

VII. Strategic Recommendations for Your Business

To navigate this complex landscape, your business needs a clear strategy. Relying on ad-hoc methods is a recipe for future legal battles.

1. Create a Tiered E-Signature Policy

Don't use a one-size-fits-all approach. Classify your documents by risk and mandate the appropriate signature type:

• Tier 1 (Low Risk): Click-wrap for internal policy acknowledgements.
• Tier 2 (Medium Risk): Aadhaar e-Sign as the default for customer and vendor contracts.
• Tier 3 (High Risk): DSC for high-value financial agreements, IP contracts, and regulatory filings.
• Tier 4 (Prohibited): Wet-ink only for documents on the "Negative List".

2. Prioritize Audit Trails & Evidence Preservation

Your ability to produce a Section 65B certificate depends on your audit trail. Ensure your e-sign platform captures a detailed, tamper-evident log of every step in the signing process: who signed, when, from what IP address, and how they were authenticated. Securely store this record for the entire statutory retention period.

3. Don't Forget Stamp Duty & Registration

An electronic signature doesn't exempt you from other laws. Ensure you comply with your state's e-stamping requirements. For property documents, always verify the local Sub-Registrar's rules before proceeding with electronic execution.