22 August 2016
A person guilty of committing an offence is liable to be prosecuted under the relevant provisions of law. Compounding of an offense in the context of law means “to settle a matter by a money payment, in lieu of other liability.
The meaning of word ‘Compounding’ is not defined under Companies Act, 2013 or in the erstwhile Companies Act, 1956. However its substance can be deciphered from a thorough reading of Section 441 under the Companies Act, 2013. In the context of the framework, compounding of an offence is a process by which a corporate entity may come forward suo-moto or on receipt of notice of default/initiation of prosecution by making an application before the Tribunal, admitting to the commission of the offense and praying for condonation of the same.
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