Ministry of Corporate Affairs (MCA) has taken stringent action against Thiyagarajan Parthasarathy for obtaining two Director Identification Numbers (DINs), imposing a penalty of Rs. 5,03,500. The penalization has been carried out in adherence to Section 155 of the Companies Act, 2013, which prohibits any individual from applying for, obtaining, or possessing more than one DIN.
This case came to light when the Office of the Regional Director (Northern Region) noticed a duplication during the processing of a DIR-5 form related to the surrender of a second DIN. It was observed that Thiyagarajan Parthasarathy had acquired two DINs on the MCA portal and the same were associated with two different companies. Further, the justification provided for the duplication did not satisfy the Office, leading to the determination that Section 155 of the Companies Act, 2013 had been violated.
The MCA issued a Show Cause Notice and an Adjudication Hearing Notice to Thiyagarajan Parthasarathy. At the hearing, the violation was admitted. As per Section 159 of the Companies Act, 2013, a penalty was then imposed for the violation and the continuing offense, leading to a total penalty of Rs. 503,500.
Conclusion: This incident underlines the serious implications of violating Section 155 of the Companies Act, 2013. The MCA’s action is a clear signal to uphold the principles of corporate governance and to ensure that all legal requirements are met. Thiyagarajan Parthasarathy has been given 90 days to pay the penalty, failure of which will lead to further prosecution under Section 454(8) of the Companies Act, 2013.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES, TAMIL NADU
SHASTRI BHAVAN, II FLOOR, 26, HADDOWS ROAD, CHENNAI-6.
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F.No.ROC/CHN/THIYAGARAJAN /ADJ Order/S.155/2023 Date: 10 JUL 2023
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 SHRI. THIYAGARAJAN PARTHASARATHY.
1. Whereas Thiyagarajan Parthasarathy S/o Parthasarathy, Aged 53 having DIN 09018479 and residing at No. 24, Old No. 33, Mettu Street, Periyakuppam, Thiruvallur — 602 001.
2. Whereas per the section 155 of the Companies Act, 2013 which read 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 by the Office of the Regional Director (Northern Region) with respect to surrender of your second DIN, it was observed that, the applicant has applied for and obtained two DINs on MCA portal, namely Din 03191514 dated 23.08.2010 (old DIN) and DIN 09018479 dated 04.01.2021 (Second DIN). Further, applicant himself has admitted and the same has been verified in e-records that the DIN being surrendered has been /is still associated with a company namely SPS Hyundai Private Limited and new DIN was applied, while forming the new company SPS Motors Private Limited. DIN surrender cannot be allowed pursuant to Rule 11(f) of the Companies (Appointment and Qualification of Directors) Rules, 2014. Furthermore, applicant’s clarification with respect to duplication does not seem satisfactory and it appears that the 2nd DIN was obtained in violation of Section 155 of the Companies Act, 2013.
4. Whereas the Office of the Regional Director (Northern Region) vide letter dated 05.09.2022 has requested this office to take necessary action for violation of Section 155 of the Companies Act, 2013 and this office have issued a Show Cause Notice to the director Shri. Thiyagarajan Parthasarathy on 19.10.2022 for Violation of Provisions of Section 155 of the Companies Act, 2013.
5. 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 company vide letter dated 15.06.2023 to Shri Thiyagarajan Parthasarathy.
6. Whereas in pursuance of the adjudication hearing notice issued vide dated 15.06.2023 to Shri Thiyagarajan Parthasarathy, SHRI FRANCIS Practising Company Secretary representative of the Thiyagarajan Parthasarathy has appeared before the undersigned on 30.06.2023 and admitted the violation on behalf of Shri Thiyagarajan Parthasarathy.
7. In view of the above, upon examination and hearing, the Violation of Section 155 of the Companies Act, 2013 for which penalty shall be imposed as per Section 159 of the Companies Act, 2013.
8. Whereas according to Section 159 which reads as under:-
“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 days 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 to him under Section 454(1) & (3) of the Companies Act, 2013 hereby impose a penalty:
| S. No | Name of the Officer deauflt | Amount of Penalty for 1st default | Additional Penalty for of Continuing Offence | Total amount Penalty Imposed |
| 1 | Shri. Thiyagarajan Parthasarathy – Director | Rs. 50,000/- | Delay days 907 (500*907) = Rs. 4,53,500/- | Rs. 5,03,500/- |
(Total Rs. 5,03,500/- 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 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 tiled 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 read as under:
(i) of the Companies Act, 2013, “where company does not pay the penalty imposed by the adjudicating officer or the Regional Director 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 who is in default does not pay the penalty within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both”.
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.
(K.LATHA PARIMALA VADANA, ICLS)
REGISTRAR OF COMPANIES, ADJUDICATING OFFICERS
TAMIL NADU, CHENNAI, ANDAMAN & NICOBAR ISLANDS
Related post Links:
| 1 | Step-by-Step Process for Surrendering Director Identification Number (DIN) | https://taxguru.in/company-law/process-surrendering-director-identification-number.html |
| 2 | Whether a person can Surrender DIN After Strike off of Company? | https://taxguru.in/company-law/person-surrender-din-after-strike-off-company.html |
| 3 | Can a Person Hold Multiple Director Identification Numbers (DIN)? | https://taxguru.in/company-law/person-multiple-director-identification-numbers-din.html |
