Director Identification Number

[Mr. M. GOVINDARAJAN]

Section 153 of the Companies Act, 2013 (‘Act’ for short) requires the Director of a Company to obtain Director Identification Number (‘DIN’ for short) by making an application to the Central Government. The Central Government shall allocate DIN to the Director who applied for it. Section 155 of the Act prohibits a Director to obtain more than one DIN. Section 156 of the Act makes an obligation of the Director to inform the DIN to the company within one month from the date of receipt of DIN. The Company, within 15 days from the date of receipt of information about allotment of DIN, from a director, is to furnish the said particulars to the Registrar of Companies.

Obligation to indicate DIN

Section 158 of the Act provides that every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of any director.

Penalty

Section 172 of the Act provides that if a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of Rs. 50,000/-. In case of continuing failure, with a further penalty of Rs. 500/- for each day during which such failure continues, subject to a maximum of Rs. 3 lakhs in case of a company and Rs. 1 lakh in case of an officer who is in default.

Adjudication

The Central Government may appoint any of its officers, not below the rank of Registrar, as adjudicating officers for adjudging penalty under the provisions of the Act. The adjudicating officer shall issue a written notice to the company/the Director who contravenes the provisions of Section 158 of the Act, to show cause, within such period as may be specified in the notice (not being less than fifteen days and more than thirty days from the date of service thereon), why the penalty should not be imposed on it or him. The reply to such notice shall be filed in electronic mode only within the period as specified in the notice.

After considering the reply submitted by such company, its officer, or any other person, as the case may be, the adjudicating officer is of the opinion that physical appearance is required, he shall issue a notice, within a period of 10 working days from the date of receipt of reply fixing a date for the appearance of such company, through its authorized representative. or officer of such company, or any other person, whether personally or through his authorized representative.

With effect from 16.09.2024 all proceedings (including issue of notices, filing replies or documents, evidences, holding of hearing, attendance of witnesses, passing of orders and payment of penalty) of adjudicating officer and Regional Director under these rules shall take place in electronic mode only through the e-adjudication platform developed by the Central Government for this purpose.

The Adjudicating Officer shall pass an order within 30 days from the date of receipt of reply to the notice, if the person is not required to appear in person; 90 days from the date of receipt of reply to the notice, if the person is required before the Adjudicating Authority.

Case laws

IN RE : M/S KHATTU HOUSING SOLUTIONS PRIVATE LIMITED - 2024 (11) TMI 881 - GOVERNMENT OF INDIA, the Company failed to mention of DIN of the Directors in the Financial Statement of the Company for the year 2014-15 and also in the Directors’ Report for the same financial year. The Adjudicating Authority, West Bangal, issued show cause notice to file reply. The company or the Director did not file reply to the show cause notice. The Adjudicating Authority imposed penalty of Rs.50,000/- to the company and Rs. 50,000/- to one Director Ishan Agarwal. Another director Viswanath Agarwal was expired. Therefore, no penalty was imposed on the deceased director.

IN RE : M/S SOUNDARAMBIGAI BENEFIT FUND NIDHI LIMITED - 2024 (11) TMI 880 - GOVERNMENT OF INDIA, the Ministry vide order dated 28.06.2023 rejected the form NDH-4 (Form for filing application for declaration as Nidhi and for updation of Status by Nidhi) filed by the company Soundarambigai Benefit Fund Nidhi Limited the company did not mention the DIN of the Directors in the financial statements attached with Form AOC-4 for 31.03.2022, resulting in violation of Section 158 of the Companies Act, 2013. The Adjudicating Authority had issued Adjudication Notice No. ROC/CHN/SOUNDRAMB IGAI/ADI / 2023 dt 31.08.2023 to the company. The company did not file reply to the said notice. The RoC fixed a personal hearing on 09.07.2024. Since there was no representation by the company the Adjudicating Authority decided the case in the absence of the company.

The Adjudicating Authority observed that the company being a Nidhi company does not fall under the definition of small company as per provision of section 2(85) of the Companies Act, 2013. Therefore, imposing the provision lesser penalty as per section 446B) shall not be applicable in this case. The Adjudicating Authority imposed a penalty of Rs. 50,000/- on the company and Rs.50,000/- on the Director Shri Kanniah Reddiar.

In ‘Calcutta South Club Limited’ – the Adjudicating Authority issued a notice to the company 04.11.2022 for violation of Section 158 of the Companies Act. No reply was filed by the Company or its directors. Therefore, in the absence of the parties the Adjudicating Authority imposed a penalty of Rs. 50,000/- on the company and Rs. 50,000/- to each of the three Directors and thus a total amount of Rs. 2,00,000/-. An appeal was filed before the Regional Director by the parties. The personal hearing was represented by the authorized representative. The Authorized representative has no valid ground in his submissions. Therefore, the Regional Director confirmed the penalties imposed by the Adjudicating Authority.