Why Director Identification Number (DIN) is important?

A Director who does not possess DIN would not be legally entitled to participate in the proceedings of the meeting of Board of Directors and consequently, a resolution passed by a Board of Directors of which no Director possesses a DIN would be no resolution in the eyes of law and such Board Resolution would be a nullity in the eyes of law.

The Hon’ble High Court of Punjab and Haryana in the matter of Union of India vs. M/s. H.S. Tuli & Sons Builders (P) Ltd. observed that a person not possessing a DIN under Section 154 of the Companies Act 2013 (‘Act’) is not eligible to be appointed as a Director or to continue as a Director of a Company as he incurs a disqualification for appointment as a Director in terms of Section 164(1)(h) of the Act and in terms of Section 167 of the Act, the office of such a Director becomes vacant as he incurs the disqualification specified under Section 164 which inter alia includes ineligibility for appointment as a Director of a Company in the absence of allotment of DIN read with Rule 2(1)(d) of the Rules, which defines DIN as an identification number allotted to an individual intending to be appointed as director or to any existing director of a company for the purpose of his identification as a director of a company. In this present case, Shri Tuli purporting to act as Managing Director of M/s. H.S. Tuli & Sons Builders (P) Ltd. was not competent to function/exercise such powers as a Director in view of the aforementioned provisions as per which his office as director stood vacated for incurring disqualification under Section 164 for want of DIN. In view of this, it follows that a Director who does not possess DIN would not be legally entitled to participate in the proceedings of the meeting of Board of Directors. Consequently, a resolution passed by a Board of Directors of which no Director possesses a DIN would be no resolution in the eyes of law, therefore, any proceedings instituted by the company pursuant to such a Board resolution would be a nullity in the eyes of law.

(Link : https://www.phhc.gov.in/download_file.php?auth=L2RhdGEwMS9hcHAvb3JhY2xlL3Byb2R1Y3QvMTEuMi4wL2RiXzEvYXBhY2hlL3BkZi9mby9DUl8xNDM5NV8yMDE4XzA3XzAyXzIwMTlfRklOQUxfT1JERVIucGRm)