[Opinion] Non-disclosure of Director’s DIN in company documents – Case Study

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1. Director Identification Number (DIN)

Director Identification Number (DIN) is a unique identification number, allotted by the Central Government to each of the aspiring individual who would like to be director of any company. The DIN number is allotted by the Central Government and is valid for the lifetime of the director. As per the provisions of Companies Act 2013, that an individual should have a valid DIN number for him / her to be appointed as a director in any company. Obviously, it means, any individual who is already a director would be having the DIN number.

2. Obligation to mention DIN number

It is a mandatory requirement under the provisions of the Companies Act 2013 that the DIN number is always required to be mentioned underneath the signature of the director whenever any document, information, or a return would be submitted to the regulator under any law.

The documents referred in this section would include, annual financial statements, board report and all attachments to board report, annual return, particulars of employees and related disclosures information pursuant to section 197(12) of Companies Act, 2013, report on corporate governance & management discussion & analysis, certified copies of any resolutions / extract of board minutes etc., inter-alia amongst others and other documents even based documents submitted to the Registrar of Companies.

3. Responsibility of the Company Secretary/Directors

In view of the above facts, the company secretaries in an organization who is a compliance officer and also a key managerial persons needs to ensure, the DIN number is mentioned on any document when the person is signing in the capacity of director or on any document which is necessary to be furnished under the Companies Act, 2013. Also the company secretary to ensure, the DIN number is mentioned beneath the signature of the director on any information, document and return submitted to the regulator by the company whenever such documents are signed by the director. The companies where the company secretary is not there, then the directors of the company is required to ensure this.

4. Relevant provisions of the Companies Act

Section 158 of the Companies Act, 2O13: – provides that every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number (DIN) in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of any director.

5. Penal provisions as per section 172 of the Companies Act, 2013 in case of non-compliance

If a company contravenes any of the provision of this chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

5.1 Subsequent amendments with enhanced penalties

Section 172 of the Companies Act, 2013 got amended with effect from 21st July 2020 vide Notification dated 28th September 2020 and Companies (Amendment) Act, 2020. As per the amended section 172, now the penalty clause reads as that if a company is in default in complying with any of the provisions of this chapter and for which no specific penalty or punishment is provided therein, the company and every officer the company who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.

6. Regulatory actions

To understand the regulatory action in cases of non-disclosure off DIN in the financial statements (even in other documents) filing, it would be worthwhile to go through a decided case law on this matter.

7. The relevant case law on this matter

We shall go through a case relating an adjudication order passed by the Registrar of Companies, Gujarat, Dadra & Nagar Haveli on 08th September 2022, in the matter of Premier Solution Private Limited, Alkapuri, Vadodara, Gujarat under section 454 (3) of the companies act 2013 read with rule 3 of the companies (adjudication of penalties) rules, 2014 for violation of section of the Companies Act

8. Details of the company

M/s. Premier Solution Private Limited is a company incorporated on 07th May 2008 having its registered office at Universal House, 50/A-1 Shreekunj Society, Alkapuri, Vadodara, Gujarat. The company falls under the jurisdiction of Registrar of Companies is of Gujarat and the Registrar of Company is situated at Ahmedabad. The company is a distributor of various IT products like Dell, Lenovo, HP, Cisco, LG etc. The company is having three directors on its board.

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