Penalty of Rs.5,03,500 levied on Director for having 2 DINs

The Ministry of Corporate Affairs(MCA) in the matter of Shri. Thiyagarajan Parthasarathy has imposed Penalty of Rs.5,03,500 on Director for having 2 DINs.

As 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 DN) 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 & Qualifications 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.

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.

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 Thiyagaraj an Parthasarathy.

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.

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,20l3.

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.”

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.

Total of Rs.5,03,500 as penalty amount imposed for Violation of 155 of the Companies Act, 2013.

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 filed with 60 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.

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