Rule 54 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 54 is the last rule of the Central Rules. It sets out how an accused person applies to compound an offence under section 56 of the Code: an application in Form VI, a decision by the Gazetted Officer notified under section 56(1), payment of fifty per cent of the maximum fine within thirty days, and a composition certificate in Part B of Form VI within ten days of receipt. If the sum is not paid in time, prosecution follows. For a case under way, a legal dispute resolution adviser can prepare the Form VI application and manage the steps.
The accused applies in Form VI (Part A), electronically or manually, to the Gazetted Officer notified under section 56(1). The officer checks that the offence is compoundable, and if the accused agrees, compounds it for fifty per cent of the maximum fine, payable within thirty days of the composition order. The officer issues the composition certificate in Part B of Form VI within ten days of receiving the amount. If the amount is not deposited in time, prosecution is instituted before the competent court. Where composition follows the start of a prosecution, a copy of the order goes to the section 53(1) officer. The Rules apply where the Central Government is the appropriate Government; otherwise the State's own wage rules apply.
The section behind this rule
Section 56 of the Code lets an accused compound an offence, before or after a prosecution begins, for fifty per cent of the maximum fine, unless the offence is punishable with imprisonment only, or with imprisonment and also with fine; it bars composition for a second similar offence within five years of an earlier compounded offence or conviction; and it says composition before prosecution bars prosecution, and after prosecution leads to discharge. Section 56(4) says every application is made in the prescribed manner. See section 56 for the full analysis of eligibility. This article is about the Rule 54 procedure and Form VI. The Code refers to the Code of Criminal Procedure, 1973; from 1 July 2024 that has been replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023.
Rule 54, sub-rule by sub-rule
| Sub-rule | What it says |
|---|---|
| (1) | An accused person desirous of composition under section 56(1) may apply in Form VI, electronically or manually, to the Gazetted Officer notified under that sub-section |
| (2) | On receipt, the officer satisfies himself whether the offence is compoundable under the Code; if it is, and the accused agrees, compounds it for fifty per cent of the maximum fine for that offence, "to be paid by the accused within thirty days of the order of composition issued by such officer" |
| (3) | The compounding officer issues a composition certificate in Part-B of Form-VI within ten days of receipt of the composition amount, to the person from whom it was received "in compliance of the composition notice" |
| (4) | If the person noticed fails to deposit the amount within the time specified by the compounding officer, prosecution shall be instituted before the competent court for the offence in respect of which the compounding notice was issued |
| (5) | Where the offence has been compounded under sub-rule (2) after the institution of prosecution, the officer sends a copy of the order for intimation to the officer referred to in section 53(1) for action under section 56(6) |
The clock
| Event | Time |
|---|---|
| Application | any time; "before or after" prosecution under section 56(1) |
| Composition order | after the officer is satisfied the offence is compoundable and the accused agrees |
| Payment | within thirty days of the order of composition |
| Certificate | within ten days of receipt of the amount |
| Default | prosecution instituted |
Illustration (hypothetical). An employer is accused of an offence under section 54(2) for which the maximum fine is Rs 10,000 (the figure printed in section 54(2), see section 54). The officer compounds the offence for fifty per cent, Rs 5,000, and issues the order on 1 March. The employer pays by 31 March. If it pays on 10 March, the certificate must issue by 20 March. If it does not pay by 31 March, prosecution can be instituted for that offence.
Form VI
Part A: application (headed "Application under sub-section (4) of section 56 for composition of offence"; "See sub rule (1) of rule 54"). Fields:
- name of applicant;
- father's or spouse's name;
- address of the applicant;
- particulars of the offence;
- section of the Code under which the offence is committed;
- maximum fine provided for the offence under the Code;
- whether prosecution against the applicant is pending or not;
- whether it is the first offence or the applicant has committed any other offence before it, and if so full details of the prior offence;
- any other information the applicant wishes to provide;
then the applicant's name and signature and date.
Items 7 and 8 are tied to the section 56 conditions: composition may happen before or after prosecution, and the five-year bar looks at an earlier compounded offence or conviction. An applicant must be candid on item 8; the officer's view on compoundability depends on it.
Part B: composition certificate ("See rule 54 (3)"). It carries a reference to a Notice number and date; certifies that "the offence under sub-section ... of section 54 in respect of which Notice No. ... Dated ... was issued to Sh... (Applicant), the employer of ... (name and registration number of establishment) has been compounded on account of remission of full amount of Rs ... towards the composition of offences to the satisfaction of the said notice"; and is signed by the officer with name and designation, addressed to the employer or establishment.
Drafting slips and silences
- Section reference in Form VI. Rule 54(1) says the application is for composition under section 56(1); the Form VI heading says "under sub-section (4) of section 56". Section 56(4) is the sub-section that says applications are made in the prescribed manner. Both appear in the printed text.
- The "notice". Rule 54(3) and (4) and Part B speak of a "composition notice" or "compounding notice" and a "Notice No.", but rule 54(2) speaks of an "order of composition". The Rules do not describe a separate notice. The officer's order and the notice are presumably the same document; the text does not say.
- Intimation to the court. Rule 54(5) sends the order to the section 53(1) officer for action under section 56(6), but section 56(6) says the compounding officer brings the composition in writing to the notice of the court. The rule's route is as printed; confirm with the notified officer how the court is informed.
- Part B and section 54 only. Part B refers to an offence "under sub-section ... of section 54", though section 56 applies to any offence under the Code.
- Who is the Gazetted Officer. The rule does not name the officer; the appropriate Government notifies one under section 56(1). Check the notification.
- Mode and place of payment. Not stated. The rule says only that the sum is paid "by the accused" within thirty days.
Composition is not a refund of wages
The composition sum settles the fine. Unpaid wages and other dues remain payable and recoverable separately, for example through a claim under section 45.
Need help with a composition application?
The decision to compound uses up your one chance within five years and depends on the facts in Form VI. Our legal dispute resolution team can assess eligibility, prepare Part A and manage the payment and certificate steps.
Key takeaways
- Application in Form VI, electronically or manually, to the notified Gazetted Officer.
- Composition sum is fifty per cent of the maximum fine, payable within thirty days of the order.
- Part B certificate is issued within ten days of receipt of the amount.
- Non-payment in time leads to prosecution.
- After prosecution has begun, a copy of the order goes to the section 53(1) officer; the Rules and section 56(6) do not match exactly.
- Composition does not clear unpaid wages.
Read next
- Section 56: composition of offences
- Rule 53: manner of holding enquiry
- Forms V, VI and VII: wage slip, composition and nomination
- Section 54: penalties for offences
Disclaimer: Based on the Code on Wages, 2019 (as enacted) and, where noted, the Code on Wages (Central) Rules, 2026 (G.S.R. 343(E), 8 May 2026), as on 1 October 2026. The Code is in force from 21 November 2025; State Governments make their own rules for establishments where the State is the appropriate Government, and wage rates are notified separately. Verify the current position before acting.