Compounding of an offence

Article-68

Directors and officers of a Company are liable for violations of various provisions  of the Companies Act, 1956 and other laws such as income tax Act Customs Act, Sales tax Act, Excise Act, FEMA, Negotiable instruments Act, various Labour Laws, environmental laws etc. In this blog there is an article listing the sections of the Companies Act, 1956 imposing criminal liability on directors. Section 621A of the Companies Act, 1956   allowing certain offences to be compounded. It is a legal process.
Following are the types of offences under Companies Act, 1956: 

1. Offences punishable with fine only;
2. Offences punishable with imprisonment or fine;
3. Offences punishable with imprisonment or fine or with both;
4. Offences punishable with imprisonment only; and
5. Offences punishable with imprisonment and fine.

Among the five offences, the first three are permitted to be compounded under this Act. That is, 4^th and 5^th in the above list are offences, which cannot be compounded. This Section empowers the concerned authority to compound offences without any limit.

An offence was compounded and the same offence was committed again by the Company or its officer, within a period of three years, such offences  are not compoundable.