Chapter XI - Appointment and Qualifications of Directors
Section 159
Section 159: penalty for default of certain provisions
Section 159 is the penalty provision for three director-identification and appointment provisions: section 152 (appointment of directors), section 155 (prohibition on obtaining more than one Director Identification Number) and section 156 (director to intimate the DIN to companies).
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Need advice on Section 159?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
If any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and section 156, such individual or director of the company shall be liable to a penalty which may extend to fifty thousand rupees and where the default is a continuing one, with a further penalty which may extend to five hundred rupees for each day after the first during which such default continues.
Introduction
An individual or director who makes any default in complying with sections 152, 155 or 156 is liable to a penalty of up to fifty thousand rupees and, for a continuing default, a further penalty of up to five hundred rupees for each day after the first.
The current text was substituted by section 25 of the Companies (Amendment) Act, 2019, deemed in force from 2 November 2018, replacing a criminal punishment with a civil penalty. Section 159 originally commenced on 1 April 2014 under S.O. 902(E).
Key takeaways
Three provisions covered
Defaults under section 152, section 155 and section 156.
Civil penalty
Up to fifty thousand rupees, plus up to five hundred rupees for each day after the first while the default continues.
Who is liable
The individual or director who defaults, not the company.
Decriminalised
The 2019 Amendment Act replaced imprisonment and fine with a penalty, deemed effective from 2 November 2018.
What the section penalises
Section 159 applies where any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and section 156. In practice these cover the appointment process and DIN-related duties, such as holding more than one DIN or failing to intimate the DIN to the companies where the person is a director.
Amount of penalty
The individual or director is liable to a penalty which may extend to fifty thousand rupees. Where the default is a continuing one, a further penalty which may extend to five hundred rupees applies for each day after the first during which the default continues. Both figures are maximums.
Penalties under the Act are imposed by an adjudicating officer under section 454.
Amendment history
Section 25 of the Companies (Amendment) Act, 2019 substituted the whole section. Under section 1(2) of that Act the substitution is deemed to have come into force on 2 November 2018. The earlier text made the contravention punishable with imprisonment or fine.
Practical preparation
Confirm that each director holds only one DIN; make sure each director has intimated the DIN to every company where he or she is a director; check that appointments followed section 152; if a default is found, rectify it promptly, because the daily penalty runs until the default ends.
Practical checklist
Do
- Maintain a register of each director’s DIN and the companies to which it has been intimated.
- Rectify any DIN default promptly to limit the continuing penalty.
Avoid
- Do not apply for a second DIN; section 155 prohibits holding more than one.
Illustrative example
Hypothetical: director holding two DINs
A director discovers that an earlier consultant obtained a second DIN for him, in breach of section 155.
Identify
The director lists both DINs and the companies where each was used.
Rectify
He takes steps to surrender the extra DIN and regularise records.
Exposure
Under section 159 he may face a penalty of up to fifty thousand rupees, plus up to five hundred rupees per day while the default continues.
Outcome
- Early rectification limits the continuing component of the penalty.
Glossary
- DIN
- Director Identification Number allotted by the Central Government under section 154.
- Continuing default
- A default that continues after the first day, attracting the further daily penalty.
- Adjudicating officer
- The officer who imposes penalties under section 454.
Frequently asked questions
Is the company also liable under section 159?
No. Section 159 imposes the penalty on the individual or director who makes the default.
Is a section 159 default still a criminal offence?
No. Since the 2019 Amendment Act substitution, deemed in force from 2 November 2018, the section provides for a civil penalty instead of imprisonment or fine.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026