Adjudication Order u/s 454 for violating Sec.155 against SPS Motors Pvt Ltd by ROC-Kerala

Adjudication Order u/s 454 for violating Sec.155 against SPS Motors Pvt Ltd by ROC-Kerala. In this article, we will take you through the mandatory provisions under Section 10A of the Companies Act, 2013. As per section 155 of the Companies Act, 2013, No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number. 
Failure to comply with these requirements may result in penalties for both the company and the officers in default, as specified under the Companies Act, 2013. Therefore, it is essential to adhere to these provisions to avoid any legal consequences. 
Applicable Provisions:- 
As per section 155 of the Companies Act, 2013, No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number. 
As per section 153 of the Companies Act, 2013, Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed. 
As per section 154 of the Companies Act, 201,. The Central Government shall, within one month from the receipt of the application under section 153, allot a Director Identification Number to an applicant in such manner as may be prescribed. 
Provided that the Central Government may prescribe any identification number which shall be treated as Director Identification Number for the purposes of this Act and in case any individual holds or acquires such identification number, the requirement of this section shall not apply or apply in such manner as may be prescribed. 
Facts of the case: 
The Ministry of Corporate Affairs (MCA) recently reduced penalties for the delayed surrender of a second Director Identification Number (DIN), impacting SPS Motors Private Limited. This case was addressed before the Regional Director in Chennai. 
SPS Motors Private Limited was incorporated on January 4, 2021. The company faced regulatory issues related to DINs when it attempted to surrender the appellant's second DIN. 
The appellant held two DINs: 
1. First DIN: DIN 03191514, issued on August 23, 2010. 
2. Second DIN: DIN 09018479, issued on January 4, 2021. 
According to Section 155 of the Companies Act, 2013, an individual with an allotted DIN should not apply for a second DIN. Consequently, the surrender of the second DIN was denied due to a violation of Rule 11(f) of the Companies (Appointment & Qualifications of Directors) Rules, 2014. 
Penalty Imposed by Registrar of Companies on Company and Officers in Default 
Taking into consideration the facts of the appeal and submissions made by the authorized representative, the penalty imposed by Registrar of Companies is reduced to.

Violation of section

Penalty imposed on company/ directors

Penalty imposed by ROC

Revised penalty imposed by RD

Sec. 155 of the Companies Act, 2013

Director

5,03,500

50,000

Total

5,03,500

50,000

Reduction in penalty 
The ground stated for the reduction of penalty are as follows:

That there was no intentional or deliberate action on the part of the appellant to violate the provisions of the law.

Exemption to Startup/ Small Company/OPC under section 446B: 
As per sec. 446B of the Companies Act, 2013, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.  
In this case, Section 446 will not appy as the company does not meet the criteria. 
Conclusion 
The MCA's decision to reduce the penalty for the delayed surrender of a second DIN demonstrates a fair and responsive regulatory approach. SPS Motors Private Limited's successful appeal highlights the importance of considering individual circumstances and the lack of intentional wrongdoing in corporate compliance matters. This case sets a positive precedent for future regulatory decisions. 
The appellant complied with the directive, remitting the penalty and submitting the relevant receipt on November 7, 2023. As of January 12, 2024, the Regional Director has directed the appellant to file the order in Form No. INC-28 within 30 days with the MCA-21 Portal. 
Download MCA adjudication order:

In this article, we will take you through the mandatory provisions under Section 10A of the Companies Act, 2013. As per section 155 of the Companies Act, 2013, No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number.

Failure to comply with these requirements may result in penalties for both the company and the officers in default, as specified under the Companies Act, 2013. Therefore, it is essential to adhere to these provisions to avoid any legal consequences.

Applicable Provisions:-

As per section 155 of the Companies Act, 2013, No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number.

As per section 153 of the Companies Act, 2013, Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed.

As per section 154 of the Companies Act, 201,. The Central Government shall, within one month from the receipt of the application under section 153, allot a Director Identification Number to an applicant in such manner as may be prescribed.

Provided that the Central Government may prescribe any identification number which shall be treated as Director Identification Number for the purposes of this Act and in case any individual holds or acquires such identification number, the requirement of this section shall not apply or apply in such manner as may be prescribed.

Facts of the case:

The Ministry of Corporate Affairs (MCA) recently reduced penalties for the delayed surrender of a second Director Identification Number (DIN), impacting SPS Motors Private Limited. This case was addressed before the Regional Director in Chennai.

SPS Motors Private Limited was incorporated on January 4, 2021. The company faced regulatory issues related to DINs when it attempted to surrender the appellant's second DIN.

The appellant held two DINs:

1. First DIN: DIN 03191514, issued on August 23, 2010.

2. Second DIN: DIN 09018479, issued on January 4, 2021.

According to Section 155 of the Companies Act, 2013, an individual with an allotted DIN should not apply for a second DIN. Consequently, the surrender of the second DIN was denied due to a violation of Rule 11(f) of the Companies (Appointment & Qualifications of Directors) Rules, 2014.

Penalty Imposed by Registrar of Companies on Company and Officers in Default

Taking into consideration the facts of the appeal and submissions made by the authorized representative, the penalty imposed by Registrar of Companies is reduced to.

Violation of section	Penalty imposed on company/ directors	Penalty imposed by ROC	Revised penalty imposed by RD
Sec. 155 of the Companies Act, 2013	Director	5,03,500	50,000
	Total	5,03,500	50,000

Reduction in penalty

The ground stated for the reduction of penalty are as follows:

That there was no intentional or deliberate action on the part of the appellant to violate the provisions of the law.

Exemption to Startup/ Small Company/OPC under section 446B:

As per sec. 446B of the Companies Act, 2013, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.

In this case, Section 446 will not appy as the company does not meet the criteria.

Conclusion

The MCA's decision to reduce the penalty for the delayed surrender of a second DIN demonstrates a fair and responsive regulatory approach. SPS Motors Private Limited's successful appeal highlights the importance of considering individual circumstances and the lack of intentional wrongdoing in corporate compliance matters. This case sets a positive precedent for future regulatory decisions.

The appellant complied with the directive, remitting the penalty and submitting the relevant receipt on November 7, 2023. As of January 12, 2024, the Regional Director has directed the appellant to file the order in Form No. INC-28 within 30 days with the MCA-21 Portal.