In a recent adjudication, the Ministry of Corporate Affairs (MCA) imposed a penalty of ₹2.92 lakh on Harjinder Kaur Chawdhary for obtaining two Director Identification Numbers (DINs), a violation of Section 155 of the Companies Act, 2013.
Section 155 of the Companies Act, 2013, explicitly prohibits individuals from applying for or obtaining more than one DIN. This provision ensures transparency and accountability in the management of company directors. The breach of this provision was identified when Harjinder Kaur Chawdhary was found to have obtained two DINs: DIN 02978128 on March 9, 2010, and DIN 10076496 on March 16, 2023.
Sequence of Events
1. Identification of Violation: The violation came to light during the processing of DIR-5 filed on February 2, 2024, for the surrender of the second DIN. The Regional Director (Northern Region) observed the duplication and raised objections.
2. Admission of Violation: Harjinder Kaur Chawdhary, through her representative, admitted the inadvertent acquisition of the second DIN. She cited technical issues on the MCA V3 Portal that allowed the duplication without error.
3. Hearing and Penalty Imposition: A hearing was conducted on July 4, 2024, where the representative requested leniency due to the inadvertent nature of the violation. Despite this, the Registrar of Companies, Chandigarh, confirmed the breach and imposed a penalty as per Section 159 of the Companies Act, 2013.
Penalty Details
The penalty imposed for this violation is detailed as follows:
- Initial Penalty: ₹50,000 for the initial default.
- Additional Penalty: ₹2,42,000 for the continuing offence, calculated at ₹500 per day from March 16, 2023, to July 11, 2024 (484 days).
The total penalty amounts to ₹2.92 lakh.
Legal Provisions and Compliance
- Section 155: Prohibits obtaining more than one DIN.
- Section 159: Stipulates penalties for non-compliance with Sections 152, 155, and 156, with penalties extending up to ₹50,000 and ₹500 per day for continuing offences.
- Section 454: Outlines the adjudication process for penalties and the rights of the aggrieved to appeal the decision within 60 days.
- Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014: Provides procedural guidelines for penalty adjudication.
Appeal Process
Under Section 454(5) of the Companies Act, 2013, Harjinder Kaur Chawdhary can appeal the adjudication order to the Regional Director within 60 days of receiving the order. If the penalty is not paid within 90 days, further prosecution may ensue under Section 454(8).
Conclusion
The imposition of a ₹2.92 lakh penalty on Harjinder Kaur Chawdhary for obtaining two DINs highlights the MCA’s vigilance in enforcing corporate governance regulations. This case serves as a reminder to all company directors to adhere strictly to the provisions of the Companies Act, 2013. The MCA’s actions ensure that the integrity of the corporate structure is maintained, and any deviations are addressed promptly and effectively.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
PUNJAB AND CHANDIGARH,
CORPORATE BHAWAN,
PLOT NO.4-B, SECTOR 27B, CHANDIGARH
PHONE NO.172-2639415,2639416
Order No ROC/Chd/Adj Order/345 Dated: 11/07/24
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES 2014 FOR VIOLATION OF PROVISIONS OF SECTION 155 OF THE COMPANIES ACT, 2013 BY SMT. HARJINDER KAUR CHAWDHARY.
1. Whereas Ms Harjinder Kaur Chawdhary D/o Sh Rajinder Singh having DIN 02978128 and residing at SCO 3, Sirhand Road Chowk, Gurdwara Dukhniwarn Sahib, Patiala Punjab
2. Whereas the section 155 of the Companies Act, 2013 reads as under
“No individual, who has already been allotted a Director Identification Number under Section 154, shall apply for, Obtain or process another Director Identification Number”
3. Whereas upon processing of DIR-5 filed vide SRN AA6743176 dated 02 02 2024 by the Office of the Regional Director (Northern Region) with respect to surrender of second DIN (10076496), it was observed that, the applicant has applied for and obtained two DINs on MCA portal i e DIN 02978128 dated 09 03 2010 (old DIN) and DIN 10076496 dated 16 03 2023 (Second DIN)
4. The Hon’ble Regional Director raised the objection to approve the e-form DIR-5 and directed to get adjudication of penalty saying that “The applicant has not submitted proof of filing of compounding/adjudication of offence” Further, the applicant herself has admitted and the same has been verified from e-records that the DIN being surrendered has been deactivated as per MCA Portal DIN surrender can be allowed pursuant to Rule 11 of the Companies (Appointment & Qualifications of Directors) Rules, 2014 subject to compliance of certain conditions mentioned in the Rule Furthermore, applicant’s clarification with respect to obtaining of second DIN does not seem satisfactory and it is clear that the 2nd DIN was obtained in violation of Section 155 of the Companies Act, 2013.
5. Whereas Ms Harjinder Kaur Chawdhary , filed Suo-Moto application/petition under section 454 of the Companies Act, 2013 read with section 155 and 159 of the Companies Act, 2013 for Adjudication of Penalty for obtaining Second DIN inadvertently
6. Whereas the undersigned has reasonable cause to believe that the aforesaid provisions of the Act have not been complied with and accordingly, this office had issued Adjudication hearing notice to the applicant/authorized representative on 02 07 2024 Whereas in pursuance of the adjudication hearing notice issued to Ms Harjinder Kaur Choudhary, Ms Yogita, Practicing Company Secretary, a representative of Ms Harjinder Kaur Choudhary has appeared before the undersigned on 04 07 2024 and requested The Registrar of Companies, Chandigarh to consider the technical issue persists on MCA V3 Portal while issuing Duplicate DIN on serious note There is no option available in MCA V3 portal to match DIN Pan Details and the online system does not provide any error while issuing duplicate DIN She also admitted the violation on behalf of Ms Harjinder Kaur Chowdhary and requested to impose lesser penalty as the second DIN was obtained inadvertently
7. In view of the above, upon examination and hearing, the Violation of Section 155 of the Companies Act, 2013 is established for which penalty shall be imposed as per Section 159 of the Companies Act, 2013
8. Whereas Provision of section 159 which reads as under –
Section 159
“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 “
9. Therefore, in view of the above said violation of Section 155 of the Companies Act, 2013, the undersigned in exercise of the powers vested under Section 454(1) & (3) of the Companies Act, 2013 hereby impose following penalty
| S. No | Name of the Officer default | Amount of Penalty for 1st default | Additional Penalty for Continuing Offence | Total amount of Penalty Imposed |
| 1 | Harjinder Kaur Chaudhary | Rs 50,000/- | Delay days 16 03 2023 to 11.07 2024 (484*500) = Rs 242000/- | Rs. 292000/- |
(Total Rs.292000/- as penalty amount) for Violation of Section 155 of the Companies Act, 2013.)
10. Whereas sub-section (5) of Section 454 of the Companies Act, 2013 provides that any person aggrieved by an order made by the adjudicating officer under sub-section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter and further sub-section (6) provides that every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed
11. Please note that as per Section 454 (8) which reads as under
(i) Of the Companies Act, 2013, “where company [ fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be,] within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees
(ii) Where an officer of a company or any other person] who is in default [fails to comply with the order made under sub-section (3) or subsection (7), as the case may be,] within a penned of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may be extended to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees
In case of default in payment of penalty, prosecution will be filed under section 454(8) (i) and (ii) of the Companies Act, 2013 without any further notice
12. In terms of the provisions of sub-rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to the following
(a) Ms Harjinder Kaur Chawdhary, SCO 3, Sirhand Road Chowk, Gurdwara Dukhniwarn Sahib, Patiala Punjab
(b) Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi and this order will be uploaded on the website of Ministry of Corporate Affairs
(Kamna Sharma)
Adjudicating Officer
Registrar of Companies
Punjab and Chandigarh
