What is DIN compliance and penalty for not mentioning DIN in all returns, information

What is DIN compliance and penalty for not mentioning DIN in all returns, information. In this article, we will take you through the provisions of Section 158 of the Companies Act, 2013 mandates that every person appointed as a director of a company must provide their Director Identification Number (DIN) under Section 152(3), and the company must mention this DIN in all returns, information, or particulars related to the director submitted under the Act. This provision ensures transparency and proper identification of directors in corporate records. Failure to comply with any of the provisions of this act will leads to fine to both company and officers in default which shall not be less than fifty thousand rupees, but which may extend to five lakh rupees.
Applicable Provisions
The case involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the MCA adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (ER), Kolkata, for consideration.
Facts of the Case with ROC and RD
MPS Distributors Private Limited, a company, was found to be in default of Section 203 of the Companies Act 2013. The appellants have filed the appeal under section 454 (4) of the Companies Act, 2013 against the adjudication order dated 13.06.2024 passes by the ROC for violation of section 158 of the companies Act 2013.
Considering the fact and circumstances of the case, the adjudicating authority had imposed penalty for violation of section 158 of companies Act, 2013.
The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 28.10.2024.
The authorised representative was asked to make submissions regarding the infirmity if any in the order of Registrar of Companies. The authorised representative had no valid submissions in this regard at the time of hearing.
On the other date 14.11.2024, authorised representative stated that being a small company under section 2(85) o the companies act 2013, the said company and its directors are liable for penalty under section 446B of the companies Act for the violation of section 158 of the companies Act 2013
Imposed Penalty
The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty, are  as follows

On Company: Rs, 2,50,000

On 2 Directors: Rs 1,00,000

Reduction in Penalty
Upon hearing the appeal, the RD reviewed the circumstances surrounding the non-compliance. The company’s arguments, including mitigating factors and potential rectifications under section 446B, were considered. Consequently, the RD reduce the penalty amount as follows:
For non-appointment of Company Secretary:

On Company: Rs, 1,25,000

On 2 Director: Rs 50,000

Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. This ensures that smaller entities, which may not have the same financial capacity as larger corporations, are not unduly burdened by heavy penalties. In this adjudication order company has claim the benefit of section 446B and concerned RD has granted the same.
Our observations:
In conclusion, Section 158 of the Companies Act, 2013 plays a crucial role in ensuring transparency and accountability by mandating the use of Director Identification Numbers (DIN) in corporate records. Non-compliance with this provision can lead to significant penalties, as seen in the case of MPS Distributors Private Limited. However, the Companies Act also provides relief to small companies through Section 446B, which allows for a reduced penalty, ensuring a fair balance between enforcement and support for smaller entities.
Download MCA Adjudication Order

In this article, we will take you through the provisions of Section 158 of the Companies Act, 2013 mandates that every person appointed as a director of a company must provide their Director Identification Number (DIN) under Section 152(3), and the company must mention this DIN in all returns, information, or particulars related to the director submitted under the Act. This provision ensures transparency and proper identification of directors in corporate records. Failure to comply with any of the provisions of this act will leads to fine to both company and officers in default which shall not be less than fifty thousand rupees, but which may extend to five lakh rupees.

Applicable Provisions

The case involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the MCA adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (ER), Kolkata, for consideration.

Facts of the Case with ROC and RD

MPS Distributors Private Limited, a company, was found to be in default of Section 203 of the Companies Act 2013. The appellants have filed the appeal under section 454 (4) of the Companies Act, 2013 against the adjudication order dated 13.06.2024 passes by the ROC for violation of section 158 of the companies Act 2013.

Considering the fact and circumstances of the case, the adjudicating authority had imposed penalty for violation of section 158 of companies Act, 2013.

The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 28.10.2024.

The authorised representative was asked to make submissions regarding the infirmity if any in the order of Registrar of Companies. The authorised representative had no valid submissions in this regard at the time of hearing.

On the other date 14.11.2024, authorised representative stated that being a small company under section 2(85) o the companies act 2013, the said company and its directors are liable for penalty under section 446B of the companies Act for the violation of section 158 of the companies Act 2013

Imposed Penalty

The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty, are as follows

On Company: Rs, 2,50,000
On 2 Directors: Rs 1,00,000

Reduction in Penalty

Upon hearing the appeal, the RD reviewed the circumstances surrounding the non-compliance. The company’s arguments, including mitigating factors and potential rectifications under section 446B, were considered. Consequently, the RD reduce the penalty amount as follows:

For non-appointment of Company Secretary:

On Company: Rs, 1,25,000
On 2 Director: Rs 50,000

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. This ensures that smaller entities, which may not have the same financial capacity as larger corporations, are not unduly burdened by heavy penalties. In this adjudication order company has claim the benefit of section 446B and concerned RD has granted the same.

Our observations:

In conclusion, Section 158 of the Companies Act, 2013 plays a crucial role in ensuring transparency and accountability by mandating the use of Director Identification Numbers (DIN) in corporate records. Non-compliance with this provision can lead to significant penalties, as seen in the case of MPS Distributors Private Limited. However, the Companies Act also provides relief to small companies through Section 446B, which allows for a reduced penalty, ensuring a fair balance between enforcement and support for smaller entities.