Non-disclosure of DIN in Financial Statements: Adjudication Order Against KASHI GRAMIN VIKAS MUTUAL BENEFIT NIDHI LIMITED

The Registrar of Companies, Uttar Pradesh (ROC Kanpur) has passed an adjudication order under Section 454 of the Companies Act, 2013 in the case of KASHI GRAMIN VIKAS MUTUAL BENEFIT NIDHI LIMITED, holding the company and certain directors liable for violation of Section 158, read with Section 172, for failure to mention Director Identification Numbers (DINs) in the financial statements.

This order is an important reminder that even procedural lapses, such as omission of DIN below the signatures on financial statements, can attract monetary penalties under the Companies Act, 2013.

Background of the Adjudication Proceedings

Appointment of Adjudicating Officer

The Ministry of Corporate Affairs, through Gazette Notification No. S.O. 831(E) dated 24/03/2015, appointed the Registrar of Companies as the Adjudicating Officer under Section 454 of the Companies Act, 2013. This appointment authorises the ROC to levy penalties in accordance with the Companies (Adjudication of Penalties) Rules, 2014 for contraventions of various provisions of the Act.

Pursuant to this delegation of power, ROC Kanpur initiated proceedings in relation to non-compliance detected in the filings of KASHI GRAMIN VIKAS MUTUAL BENEFIT NIDHI LIMITED.

Company and Directors Involved

The adjudication relates to KASHI GRAMIN VIKAS MUTUAL BENEFIT NIDHI LIMITED, a company incorporated under the Companies Act, 2013/1956, having:

  • CIN: U65923UP2016PLC077103
  • Registered office: PLOT NO. 250, WORD NO. 5, LOKMANYA TILAK NAGAR, DAK BANGLA ROAD, NA, CHANDAULI, UTTAR PRADESH, INDIA, 232104

The order also concerns the following individuals in their capacity as present or past directors/officers of the company:

  • JAI SHANKAR AGRAHARI
  • . BANARASI
  • PAVAN KUMAR CHAUBEY
  • PETER DAMIEN
  • RAJ KUMAR PANKAJ
  • MAHENDRA NATH PANKAJ

Statutory Framework: Sections 158, 172 and 454

Requirement under Section 158

Section 158 of the Companies Act, 2013 mandates that every director must mention his/her Director Identification Number (DIN) in all documents where such director’s signature or name appears in the capacity of a director. This includes, among others, the financial statements and the balance sheet of the company.

The objective of this requirement is to:

  • Ensure traceability and identification of directors
  • Promote transparency in corporate records
  • Facilitate regulatory oversight and maintain integrity in corporate filings

General Penalty under Section 172

In this case, penalty has been levied under Section 172 of the Companies Act, 2013, which provides a general penalty where no specific penalty is prescribed for contravention of provisions of a particular Chapter.

Under Section 172:

  • The company and every officer in default are each liable to a penalty of ₹50,000 for the default; and
  • In case the default continues, a further penalty of ₹500 per day is leviable, subject to a maximum of ₹3,00,000 for the company and ₹1,00,000 for each officer in default.

In this adjudication, the ROC has invoked Section 172 in conjunction with Section 158 for non-mention of DINs in the financial statements for the relevant financial year.

Adjudication Mechanism under Section 454

Section 454 empowers designated officers (including Registrars of Companies) to adjudicate penalties for contraventions of the Companies Act, 2013, following the prescribed procedure and after providing reasonable opportunity of being heard to the concerned company and its officers.

Chronology of Events and Inquiry Proceedings

Initiation of Inquiry under Section 206(4)

The process began with directions issued by the Serious Complaint Analysis (SCA) mechanism of the Ministry of Corporate Affairs.