HYDERABAD ROC IMPOSED A WHOOPING PENALTY OF ₹27,46,500 ON A DIRECTOR FOR HOLDING MORE THAN ONE DIN NUMBER

 

HYDERABAD ROC IMPOSED A WHOOPING

 PENALTY OF ₹27,46,500 ON A DIRECTOR

 FOR HOLDING MORE THAN ONE DIN

 NUMBER

ROC Hyderabad vs Chukkamamba Sri Velamati (ECMAT LIMITED)

FACTS OF THE CASE

The Hyderabad Registrar of Companies (ROC) imposed a penalty on Chukkamamba Sri Velamati (din 00218567), for violating section 155 of the companies act, 2013, which prohibits holding more than one director identification number (DIN).

VIOLATION

Ms. Chukkamamba Sri Velamati obtained a second DIN (02749222) on August 21, 2009, while already possessing an existing DIN (00218567) obtained on July 1, 2006. This constitutes a violation of Section 155.

ACTION TAKEN BY THE DIRECTOR:

Ms. Velamati submitted an application for adjudication of the offense under Section 159 of the Companies Act, 2013, acknowledging the violation.

COMPLIANCE

The order required the penalty to be paid from the individual's personal sources through the MCA's e-Adjudication portal within 90 days of receiving the order.

APPLY FOR ADJUDICATION

The action taken by the individual was to apply for adjudication and, presumably, surrender the duplicate DIN (02749222) after the adjudication process was initiated, as the violation (holding duplicate DINs) is a prerequisite for penalty under Section 159.

FINAL THOUGHTS

ROC ,Hyderabad passed the  order on 25/09/2025 vide order number  PO/ADJ/09-2025/HD/00681. Levy of penalty of ₹27,46,500 is too exorbitant considering the level of offence committed.

Director can appeal to RD , Hyderabad to reduce the penalty by substantiating with adequate reason.

It is really perplex to note why ROC Hyderabad has levied such a huge penalty for obtaining a duplicate DIN due to inadvertence.  

R V SECKAR   FCS, LLB 79047 19295

OBTAINING TWO DINS BY A DIRECTOR – IS IT AN OFFENCE UNDER CA 2013 ?- IMPORTANT CASE LAWS

 

OBTAINING TWO DINS BY A DIRECTOR –

IS IT AN OFFENCE UNDER CA 2013 ?-

IMPORTANT CASE LAWS

SECTION 155 OF THE COMPANIES ACT, 2013 STATES:

“No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number.”

SECTION 159 PROVIDES THE PENALTY FOR DEFAULT OF CERTAIN PROVISIONS (INCLUDING SECTION 155):

“Such individual or director of the company who has obtained more than one DIN 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.”

WHETHER SURRENDER OF DUPLICATE IS ALLOWED?

The surrender of DIN application could not be allowed as per Rule 11(f) of the Companies (Appointment & Qualifications if Directors) Rules 2014 since the second DIN was obtained in violation of section 155 of the Companies Act 2013.

CASE LAWS ON DIRECTORS HAVING MORE THAN ONE DIN

1.RD REDUCED THE PENALY  INT THIYAGARAJAN PARTHASARATHY CASE

·      He had an earlier DIN (DIN 03191514 dated 23 Aug 2010) and later obtained a second DIN (DIN 09018479 on 4 Jan 2021) while forming another company.

·      Adjudication order imposed a penalty of Rs 5,03,500 for violation of section 155.

·      In an appeal to the Regional Director, due to absence of deliberate malicious intent, the penalty was reduced (in one commentary) to Rs 50,000.

2.MRS ANUBAMA (CHENNAI CASE)

First DIN obtained 9 Jan 2008; second DIN obtained 23 Apr 2013.

The period of violation was calculated from 1 Apr 2014 to 27 Aug 2024 (3,802 days) and a penalty of Rs 19.51 lakhs (i.e., 50,000 + 3,802×500=19,01,000) was imposed.

3.LAXMAN KRANTI ALLAGADDA KUMAR

First DIN (00933931) on 18 Nov 2006; a second DIN (10495519) on 6 Feb 2024.

Violation for 170 days; penalty of Rs 1,35,000 (50,000 + 170×500) was imposed.

4.SHASHI SINGLA (PUNJAB/CHANDIGARH)

First DIN 00599311; second DIN 10008811 on 1 July 2022.

Penalty imposed: Rs 50,000 + Rs 500×729 days = Rs 4,14,500

SIGNIFICANT TAKEAWAYS

Regulatory bodies (like the RoC / Regional Director) have initiated aggressive action: e.g., in one instance, the Central government stated action had been initiated against 469 persons for multiple DIN

In determining penalty, factors taken into account include: length of period of violation, whether the person was aware, the usage of second DIN (linked to companies), whether the person sought to voluntarily surrender, etc.

SIGNIFICANT REDUCTION IN PENALTY

 For instance, in the Thiyagarajan case the RD significantly reduced the penalty citing absence of deliberate intention

SURRENDER OF THE DUPLICATE DIN

Surrender of the unwanted/duplicate DIN is to be done via Form DIR-5. However, surrendering the second DIN will only be accepted once the violation is adjudicated.

CHECK BEFORE APPLYING FOR DIN

For compliance professionals and persons intending to be directors: it is advisable to check on the portal whether any prior DIN exists (linked to your PAN/identity) before applying for one, to avoid inadvertently obtaining a second one.

R V SECKAR FCS, LLB 79047 19295