Dual DIN (Director Identification Number. Is it possible to have dual DIN?

DIRECTOR’S DUAL DIN - Is it possible to hold dual DIN?

One of the important provision of Companies Act, relating to the management of the company is every person who want to become Director of a company should hold Director Identifiation Number (DIN). The very purpose of the provision is to identify and limit the number of director ship, to ensure the company is run for the best interest of every stake holders. Holding numerous directorships by a person can lead to fraud, improper management, creation shell companies, tax evasion, money laundering etc.

From the ethical side of the management, it is always advisable to have single unique identification document to identify a person holding positions in different corporates. So DIN is made compulsory for becoming director and having more than one DIN has made penalisable on ethical and practical grounds.

Section 155 of the Companies Act prohibits the possession of multiple DIN’s by any individual director. Registrar of Companies Tamilnadu on an order dated 10th July 2023, penalised MR Thiyagarajan Parthasarathy, a director for the violation of Section 155.

Facts

Mr Thiyagarajan Parthasarathy, a resident of Thiruvallur, Tamilnadu was holding a DIN numbering 09018479 and as a directror in a company. It is found that he have applied and obtained another DIN through Ministry Of Corporate Affairs website.

The investigation to the case revealed that Mr Thiyagarajan, has applied for a DIN on 23rd August, 2010 (DIN 03191514) and was linked to SPS Hundai Private Ltd. But on 4th January 2021 he acquired the DIN 09018479, to become director of SPS Motors Private Ltd.

The Registrar of Companies held that this a gross violation of Section 155 of the Companies Act and also Rule 11(f) of the Companies (Appointment and Qualification of Directors) Rules, 2014. The position is such that, once a DIN is issued, and if, even by mistake, another DIN is obtained and linked to a company, there is not provision for surrender of DIN.

Mr Thiyagarajan, requested for cancellation of DIN by submitting DIR 5, and the Regional Director (Northern Region) found out the violation. An opportunity of being heard has been given to him but his explanation was not found satisfactory.

A show cause notice has been issued to him on 19th October 2011 to provide with an opportunity to explain against the alleged violation. After receipt of the reply the authority asked Mr Thiyagarajan t oappear before the prescribed authorities, to address tha matter. His representatives appeared before the authorities on 30th June 2023 and admitted the violation.

Adjudification

As per the provisions of Section 159 of Companies Act any individual or director found in default of complying with the provisions of Section 152, 155 and 156 shall be liable to a penalty for first default up to 50,000 and in in case of continuing offenses, further penalty up to 500 rupees per day after the first day of default may apply.

In the present case the Registrar of Companies in excercise of powers under the law imposed a penalty of 5,03,500/- ( Rupees 50000 for the first default, and 500 per day for continuing default)