Obtaining 2nd DIN without malafide intent: MCA Regional Director reduces Penalty from Rs. 5 Lakh to 50k [Read Order]
Observing that the 2nd DIN was obtained without any malafide intents, the MCA Regional Director reduced the Penalty imposed to Rs. 50000/-
MCA Regional Director – MINISTRY OF CORPORATE AFFAIRS – Second DIN application penalty reduction – MCA Regional Director decision on DIN penalty – MCA Regional Director’s discretion on penalties – TAXSCAN
MCA Regional Director – MINISTRY OF CORPORATE AFFAIRS – Second DIN application penalty reduction – MCA Regional Director decision on DIN penalty – MCA Regional Director’s discretion on penalties – TAXSCAN
In a recent development before the Regional Director (Southern Region), Ministry of Corporate Affairs, Chennai, the appellant representing SPS Motors Private Limited, faced a penalty reduction in a case related to the violation of Section 155 of the Companies Act, 2013.
Section 155 states about Prohibition to obtain more than one Director Identification Number ( DIN ). No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number.
The appeal was filed against an Adjudication Order passed by the Registrar of Companies, Chennai, dated July 10, 2023, which imposed a penalty of Rs. 5,03,500 on the Director for obtaining a second Director Identification Number ( DIN ) in violation of the regulations.
SPS Motors Private Limited, incorporated on January 4, 2021, came under scrutiny when it was discovered that the appellant, Shri Thiyagarajan Parthasarathy, had applied and obtained two DINs. The first DIN (03191514) was dated August 23, 2010, and the second DIN (09018479) was dated January 4, 2021. The surrender of the first DIN was associated with another company, M/s. SPS Hyundai Private Limited, and the new DIN was applied for while incorporating SPS Motors Private Limited.
The Registrar of Companies, Chennai, issued an Adjudication Order on July 10, 2023, citing a huge delay of 907 days under Section 454 (3) & (4) of the Companies Act, 2013. A substantial penalty of Rs. 5,03,500 was imposed on Shri Thiyagarajan Parthasarathy at a rate of Rs. 500 per day.
Aggrieved by the order, the appellant filed an appeal within the stipulated time frame on September 8, 2023. The appeal, made in Form ADJ, requested a lenient view, citing no intentional or deliberate action on the part of the appellant to violate any laws.
The hearing of the appeal took place on October 3, 2023, where the authorized representative reiterated the submissions made in the appeal.
Upon review, the Regional Director found grounds to interfere with the adjudication order. In the hearing held on October 31, 2023, the penalty initially set at Rs. 5,03,500 was reduced to Rs. 50,000. The appellant was directed to pay the revised penalty within 15 days from the date of the hearing.
Following the Regional Director's directions, the appellant promptly remitted the penalty amount and submitted the relevant receipt as evidence of payment.
The Regional Director directed the appellant to file the order in Form No. 1NC-28 within 30 days from the date of the order with the MCA-21 Portal.
The penalty imposed on SPS Motors Private Limited for the DIN violation has been reduced from Rs. 5,03,500 to Rs. 50,000, bringing a resolution to the case. The company is now required to file the order with the Ministry of Corporate Affairs, ensuring compliance with the directive within the stipulated time frame.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
