Penalty Imposed for Duplicate DIN: Key Takeaways from ROC Mumbai Adjudication Order

The Registrar of Companies, Mumbai, has passed an adjudication order under Section 454 of the Companies Act, 2013 for violation of Section 155, read with Section 159. The order reiterates that holding more than one Director Identification Number (DIN) is a strict statutory prohibition, and even an unintentional or bona fide mistake can attract monetary penalty.

This article analyses the facts, legal framework, reasoning, and implications of the order passed in the matter of Mr. ANKIT BHAGERIA, where a penalty of ₹50,000 was levied for obtaining and holding a duplicate DIN for a continuing period of default.

Prohibition on Multiple DINs – Section 155

Section 155 of the Companies Act, 2013 provides a clear and absolute restriction:

“No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number.”

Once an assessee has been allotted a DIN under Section 154, the individual is legally barred from:

  • Applying for a second DIN
  • Obtaining an additional DIN
  • Continuing to possess more than one DIN at any point in time

The provision does not carve out any exception based on intention, knowledge, or bona fide mistake.

Penalty Provision – Section 159

Section 159 lays down the consequences where an individual or director fails to comply with specified DIN-related provisions:

If any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and section 156, such individual or director of the company shall be liable to a penalty which may extend to fifty thousand rupees and where the default is a continuing one, with a further penalty which may extend to five hundred rupees for each day after the first during which such default continues.

Thus, the statutory scheme is:

  • A basic/initial penalty up to ₹50,000
  • In case of continuing default, an additional daily penalty up to ₹500 per day post the first day of default

This penalty is personal to the individual in default and is not to be borne by any company.

Power to Adjudicate – Section 454 and Adjudication Rules

Under Section 454, read with the Companies (Adjudication of Penalties) Rules, 2014, the Central Government has empowered certain officers as Adjudicating Officers to:

  • Examine instances of non-compliance
  • Determine whether penal provisions are attracted
  • Quantify and impose penalties

By Gazette Notification No. S.O. 831(E) dated 24/03/2015, the designated officer (Registrar of Companies, Mumbai) was appointed as the Adjudicating Officer for this purpose.

Brief Facts of the Case

Original DIN Allotment and Initial Directorship

  • The assessee, Mr. ANKIT BHAGERIA, was first allotted DIN 02221058 on 25.06.2008.
  • Using this DIN, he was appointed as an Additional Director in Optimix Advisors Private Limited with effect from 08.06.2012.
  • He resigned from this company on 28.08.2012.

Subsequently, the company Optimix Advisors Private Limited was converted into Optimix Advisors LLP, and a fresh certificate of registration was issued to the LLP on 24.10.2017.

Second DIN Application and Allotment

According to his submissions:

  • From 2012 onwards, he was not associated with any company or LLP.
  • In 2023, due to lack of awareness and familiarity with the Ministry of Corporate Affairs (MCA) processes and his prior DIN, he unknowingly applied for a fresh DIN.
  • As a result, a second DIN 10118021 was allotted to him on 14.04.2023.
  • This second DIN was used for his appointment as a Designated Partner in Optimix Advisors LLP.

Consequently, for a period, he held two active DINs simultaneously, namely:

  1. First DIN – 02221058
  2. Second DIN – 10118021