ROC Bangalore levies penalty for holding multiple DINs in breach of Companies Act

The Registrar of Companies, Bangalore, has passed an adjudication order under Section 454 of the Companies Act 2013, imposing a monetary penalty on a director for contravention of the statutory bar on holding more than one Director Identification Number (DIN) under Section 155. The matter highlights the strict compliance framework around DIN allotment, the continuing nature of such defaults, and the manner in which adjudicating officers exercise discretion while determining penalties under Section 159.

This order is an important reference point for individuals and professionals dealing with DIN applications, particularly where a second DIN has been obtained inadvertently and the assessee seeks to regularise the position through surrender and adjudication.

Statutory background: DIN compliance and penal framework

Under the scheme of the Companies Act 2013, every person intending to be appointed as a director must obtain a DIN. However, Section 155 clearly stipulates that an individual is not permitted to acquire or possess more than one DIN. Once a DIN is allotted, all further appointments as director must be mapped to that single DIN.

Penalty provisions under Section 159

Section 159 of the Companies Act 2013 deals with penalty for non-compliance with, inter alia, Section 152, Section 155 and Section 156. The section provides that:

  • Where an individual or director fails to comply with these provisions, such person is liable to a penalty up to ₹50,000, and
  • Where the contravention is a continuing default, there is an additional penalty up to ₹500 per day after the first day, for the period during which the default persists.

Accordingly, holding more than one DIN constitutes a continuing violation from the date the second DIN is allotted until the date the defect is rectified (e.g., by surrender of the duplicate DIN), and penalty computation must factor in this duration.

Adjudication under Section 454

Section 454 empowers the Central Government to appoint adjudicating officers for levying penalties under the Companies Act 2013. The Ministry of Corporate Affairs, through notification S.O. 831(E) dated 24/03/2015, appointed the Registrar of Companies (ROC), Bangalore, as Adjudicating Officer for such purposes, read with the Companies (Adjudication of Penalties) Rules, 2014.

In this case, the ROC, Bangalore exercised these powers to adjudicate the default relating to multiple DINs and to determine the appropriate quantum of penalty, keeping in view the statutory maximum and the assessee’s specific circumstances.

Facts of the case: Inadvertent acquisition of second DIN

Identity of the individual and original DIN

The adjudication proceedings related to JACOB MUNDATTUCHUNDAYIL THOMAS, an individual holding DIN 06685204 and residing at the address stated in the order under the jurisdiction of ROC Bangalore.

  • The individual initially obtained DIN 06685204 on 09.09.2013.
  • At the time of grant of this first DIN, he was not associated as director with any company.

Incorporation of company and second DIN allotment

Subsequently, the individual became a director in Harasol Concepts Private Limited, a company incorporated on 31.05.2022 under the jurisdiction of ROC Bangalore.

During the process of incorporation and filing of relevant forms, the individual applied afresh for a DIN, which inadvertently resulted in allotment of a second DIN, bearing number 10000197, on 06.04.2022.

By doing so, he came to hold two active DINs simultaneously, which is directly in conflict with the prohibition contained in Section 155 of the Companies Act 2013.

Realisation of violation and attempt to surrender second DIN

Upon later recognising that he already had an existing DIN and that the second DIN was obtained in contravention of the Act, the assessee took corrective steps:

  1. He filed a suo-motu adjudication application for violation of Section 155 read with Rule 11 of the Companies (Appointment of Directors) Rules, 2014.