CEV INTEGRAL APPRAISERS FOUNDATION RVO

ONE OF THE BEST RVO IN INDIA

What the Google Search Engine Reflects About CEV IAF RVO

Empowering Engineers and Valuers Across India

USE OF DIGITAL SIGNATURES IN VALUATION REPORTS:

LEGAL VALIDITY, PROFESSIONAL RESPONSIBILITY, AND BEST PRACTICES UNDER INDIAN LAW

In recent years, the valuation profession in India has undergone a decisive digital transformation. With banks, financial institutions, insolvency professionals, courts, and regulators increasingly accepting and insisting upon electronically signed documents, the Digital Signature Certificate (DSC) has become an indispensable tool for valuers, engineers, architects, and other technical professionals.

This article explains the concept, legal standing, types, usage, liabilities, and best practices relating to digital signatures in valuation reports, with reference to Indian law and regulatory expectations.

Understanding Digital Signatures under Indian Law

A Digital Signature Certificate (DSC) is an electronic form of authentication issued by a licensed Certifying Authority (CA) under the Information Technology Act, 2000. It serves two critical purposes:

Authentication of Identity – It confirms the identity of the signer.
Integrity of Document – It ensures that the document has not been altered after signing.

Under Section 5 of the Information Technology Act, 2000, electronic signatures are granted legal recognition, making digitally signed documents legally equivalent to physically signed documents, provided they comply with the prescribed standards.

For valuation professionals, this means that a digitally signed valuation report carries full legal sanctity, similar to a manually signed and sealed report.

Types of Digital Signature Certificates Relevant to Valuers

Earlier, Class 2 DSCs were commonly used for filing returns and regulatory submissions such as MCA and GST. However, these have now been merged into Class 3, making Class 3 DSC the prevailing standard.

Class 3 DSC

Class 3 DSCs are currently used for:

Banking and secured lending valuations
Income-tax related submissions
MCA filings
Insolvency and Bankruptcy Board of India (IBBI) processes
E-tendering and e-procurement

These certificates involve a higher level of verification and are therefore preferred by banks and regulators.

Sign and Encrypt Variants

DSCs are further categorized based on their usage:

Sign only – Used for signing valuation reports and professional documents.
Encrypt only – Used for data security.
Sign & Encrypt – Used for both authentication and confidentiality.

For valuation reports, “Sign only” or “Sign & Encrypt” DSCs are typically sufficient.

Procedure to Obtain a Digital Signature Dongle

A DSC is obtained through licensed Certifying Authorities such as eMudhra, Sify, Capricorn, and others authorized by the Controller of Certifying Authorities (CCA), Government of India.

The standard process involves:

Submission of PAN, Aadhaar, identity proof, and address proof (KYC)
Verification by the Certifying Authority
Issuance of the DSC, which is stored in a secure USB token (dongle)

This dongle acts as a digital equivalent of a handwritten signature and must be handled with utmost care.

Cost and Validity

Typically, the cost of a DSC ranges between ₹1,000 and ₹2,500, depending on:

The issuing vendor
Validity period (2 years or 3 years)
Inclusion of the USB dongle

The validity of a DSC is usually two or three years, after which it must be renewed.

Legal Acceptance of Digitally Signed Valuation Reports

A frequently asked question among valuers is whether a hard copy of a valuation report is required after submitting a digitally signed PDF.

The legal position is clear:

A digitally signed PDF is legally valid
Physical copies are not mandatory, unless specifically demanded by a bank, authority, or court

This position aligns with the IT Act, 2000 and is widely accepted by banks and financial institutions across India.

Seal, “Original”, and “True Copy”: Are They Required?

In traditional practice, valuation reports often carried physical seals and handwritten endorsements such as “Original” or “True Copy”.

In a digitally signed environment:

Affixing a seal is not necessary
“Original” or “True Copy” markings are not required
The digital signature itself serves as proof of authenticity, integrity, and authorship

This significantly reduces redundancy while maintaining legal robustness.

Digital Signature Placement: All Pages or Last Page?

From a legal standpoint:

Digitally signing the last page of the valuation report is sufficient
There is no statutory requirement to sign every page

However, professionals must be cautious:

Some banks and institutions mandate DSC on all pages
In such cases, the institution’s specific instructions must be followed

Liability of the Digital Signature Holder

One of the most critical aspects of digital signatures is liability.

Under Indian law:

The DSC holder is fully responsible for every document signed using their digital signature
Any misuse is presumed to be the act of the DSC holder unless proven otherwise

This legal presumption places a high degree of responsibility on valuers and engineers.

Misuse by Staff or Associates: Who Is Accountable?

If a staff member or associate misuses the DSC—such as in cases of over-valuation or unauthorized signing—the law is unambiguous:

The DSC holder is responsible
The legal system presumes that only the holder has control over the dongle and password

Therefore:

The dongle password must remain strictly confidential
The dongle should never be shared, even within the organization

Multiple Digital Signatures for One Professional

Professionals may require different DSCs for different roles, such as:

One for IBBI assignments
One for bank valuations
One for corporate filings

Indian law permits holding multiple DSCs, provided:

Each DSC is issued separately
Each is stored in its own individual dongle

Best Practice for Valuation Professionals

A DSC should be treated with the same seriousness as:

A bank ATM card
A professional license
A physical seal and signature combined

It is personal, confidential, and legally binding.

As valuation practice becomes increasingly digital and regulator-driven, the correct and responsible use of digital signatures is no longer optional—it is a core professional obligation.

CEV’s Advice

Digital signatures are not merely a technological convenience; they are a legally enforceable extension of professional responsibility. For valuers, engineers, and technical experts in India, understanding and respecting the legal implications of DSC usage is essential to safeguarding professional credibility, compliance, and integrity.