The plea, which is likely to be taken up tomorrow by a bench headed by Chief Justice G Rohini, refers to an earlier statement given by the Centre that it does not "recognize any signature other than a digital signature as an electronic signature" under the Information Technology Act.
There are may internet users who do not have registered digital signatures but enter into various business activities on the internet, it said.
"In view of the above, all the transactions wherein digital signatures are not used may not have any legal validity, which may cause immense problems, huge loss to Indian parties and adversely affect the whole economy of India, the application, filed through lawyer Virag Gupta, said.
It said that besides increasing internet transactions, there is "huge E-Commerce market in India which currently is around USD 13 billion according to a joint report of KPMG and Internet and Mobile Association of India which are using the electronic signatures other than digital signatures."
The plea has sought a direction for safeguarding the interest of internet users by making it mandatory that users use digital signatures.
It has also sought a direction to Facebook Inc to "modify the grievance mechanism by making the specific provision for redressal of grievances/complaints to be authenticated through digital signatures."
The plea has sought initiation of contempt proceedings against the Secretary, Information and Technology Ministry, for failure "to comply with provisions to place grievance officers by other intermediaries companies as per orders dated 23rd August 2013 passed by this Court which is causing huge risk to safety of children and citizens of this country."
Earlier, the court had asked the Centre to put in place the proposed e-mail policy for government employees which will ensure that they will not use internet services of "external service providers" for official communications.
The Department of Electronics and Information Technology had apprised the court that the Committee of Secretaries (CoS) has met recently and undertaken a wider consultation process among stake-holders in the country for devising the proposed e-mail policy.
The court had also asked the Centre to issue an advisory to the employees, who have already been given e-mail accounts by the National Informatics Centre (NIC), not to use internet services of external service providers for official purposes.
Govindacharya, in the PIL, has raised various issues including use of e-mail services, provided by offshore providers, by government officials for official purposes.
The websites evade taxes and make public the personal details of Indian users, it said, adding even minors below 13 years of age are being allowed to use Facebook due to lack of proper mechanism.
Government officials usually use Gmail accounts, whose servers are outside India, and transfer the official data through them, which is violative of the Public Records Act, it said.
The plea has also sought a direction to ensure safety of the data of 50 million Indian users which is transferred "to the US and is being used for commercial gains in violation of the right to privacy."