Sections 47 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.
Three sections of the Information Technology Act, 2000 deal with what happens around an adjudication. Section 47 lists the factors the adjudicating officer must weigh in fixing compensation. Section 63 allows a contravention to be compounded, with a three-year bar on repeat compounding. Section 64 says unpaid penalty or compensation is recovered as an arrear of land revenue. Sections 63 and 64 are printed in the copy inside Chapter X, which is headed "The Cyber Appellate Tribunal", although they concern contraventions and recovery.
In deciding the quantum of compensation, the adjudicating officer must have due regard to the gain of unfair advantage (where quantifiable), the loss caused to any person, and the repetitive nature of the default (s.47). A contravention may be compounded before or after adjudication proceedings start, on conditions, but not for a person who commits the same or similar contravention within three years of an earlier compounding (s.63). Unpaid penalty or compensation is recovered as an arrear of land revenue, and the licence or certificate is suspended till the penalty is paid (s.64).
Source and scope
This article follows the consolidated text consulted (the Act as amended by the Information Technology (Amendment) Act, 2008). Later amendments and the current position of these sections should be checked. In the copy no Chapter heading is printed between section 62 and section 63, so sections 63 and 64 appear under Chapter X as printed. If you are facing an adjudication, a legal dispute resolution consultation can help you weigh the options.
Section 47: factors for the quantum of compensation
"While adjudging the quantum of compensation under this Chapter, the adjudicating officer shall have due regard to the following factors, namely":
| Clause | Factor as printed |
|---|---|
| (a) | the amount of gain of unfair advantage, wherever quantifiable, made as a result of the default |
| (b) | the amount of loss caused to any person as a result of the default |
| (c) | the repetitive nature of the default |
Three notes. First, the duty is addressed to the adjudicating officer; see our article on section 46: adjudicating officer and power to adjudicate. Second, the words "wherever quantifiable" qualify only clause (a). Third, the section lists factors; it does not set a formula or a number. Section 43, which prints no amount for compensation, is explained in our article on compensation for damage to a computer and unauthorised access.
Section 63: compounding of contraventions
Printing note: the copy prints "63.Compounding" without a space; we write section 63.
Sub-section (1). "Any contravention under this Act may, either before or after the institution of adjudication proceedings, be compounded by the Controller or such other officer as may be specially authorized by him in this behalf or by the adjudicating officer, as the case may be, subject to such conditions as the Controller or such other officer or the adjudicating officer may specify."
The proviso: "such sum shall not, in any case, exceed the maximum amount of the penalty which may be imposed under this Act for the contravention so compounded." Printing slip: the proviso speaks of "such sum" although sub-section (1) mentions no sum; we quote it as printed and the reader should treat the sum as the amount payable on compounding.
Sub-section (2). "Nothing in sub-section (1) shall apply to a person who commits the same or similar contravention within a period of three years from the date on which the first contravention, committed by him, was compounded."
The Explanation: "any second or subsequent contravention committed after the expiry of a period of three years from the date on which the contravention was previously compounded shall be deemed to be a first contravention."
Sub-section (3). "Where any contravention has been compounded under sub-section (1), no proceeding or further proceeding, as the case may be, shall be taken against the person guilty of such contravention in respect of the contravention so compounded."
Who may compound, and when
| Question | Answer as printed |
|---|---|
| Who may compound | The Controller, or another officer specially authorized by him, or the adjudicating officer, as the case may be |
| When | Before or after the institution of adjudication proceedings |
| On what terms | Subject to such conditions as the compounding authority may specify |
| Limit on the sum | Not to exceed the maximum penalty that may be imposed under the Act for that contravention |
| Repeat compounding | Barred for the same or similar contravention within three years of the first compounding; after three years, the next is deemed a first contravention |
| Effect | No proceeding or further proceeding for the compounded contravention |
The section is about contraventions under the Act. Compounding of offences is dealt with in a different section, section 77A, covered in our article on compounding of offences and bailable offences. For the general difference between the two ideas, see our post on compounding versus adjudication of offences.
Section 64: recovery
"A penalty imposed or compensation awarded under this Act, if it is not paid, shall be recovered as an arrear of land revenue and the license or the Electronic Signature Certificate, as the case may be, shall be suspended till the penalty is paid."
Points from the words:
- The section applies to penalty imposed and compensation awarded under the Act.
- Recovery is as an arrear of land revenue. The Act does not describe the steps of that recovery and none is stated here.
- The licence of a Certifying Authority or the Electronic Signature Certificate is suspended till the penalty is paid. The sentence ends with "till the penalty is paid" and speaks of penalty only, although the opening speaks of penalty and compensation; we quote it as printed.
- The heading and some words appear in square brackets in the copy.
A worked example
Orchid Trust Services Private Limited, a Certifying Authority, is found by an adjudicating officer to have repeated a default. In fixing compensation payable to an affected subscriber, the officer weighs the unfair gain made (if it can be quantified), the subscriber's loss and the fact that the default was repeated (section 47). Before the order, Orchid asks to compound a different contravention; the Controller agrees on conditions and the sum does not exceed the maximum penalty for that contravention, and once compounded no further proceeding can be taken for it (section 63(3)). Eighteen months later Orchid commits a similar contravention; section 63(2) says sub-section (1) does not apply to it, since it falls within three years of the first compounding. If a penalty in a later order is not paid, section 64 provides for recovery as an arrear of land revenue and for suspension of the licence till the penalty is paid.
Need help with compounding or recovery?
Compounding can end proceedings for a contravention, but only on the conditions set, and only if the three-year bar does not apply. Our legal dispute resolution team can help you assess whether to compound and what to propose.
Key takeaways
- Section 47 lists three factors: unfair gain (where quantifiable), loss caused, and repetition.
- A contravention can be compounded before or after adjudication proceedings begin.
- The sum cannot exceed the maximum penalty that may be imposed for that contravention.
- Compounding is barred for the same or similar contravention within three years of an earlier compounding.
- Unpaid penalty or compensation is recovered as an arrear of land revenue; the licence or certificate is suspended till the penalty is paid.
Read next
- Section 46: adjudicating officer and power to adjudicate
- Sections 48 and 49: Cyber Appellate Tribunal, establishment and composition
- Sections 77A and 77B: compounding of offences and bailable offences
- Compounding vs adjudication of offences: key differences
Disclaimer: Based on a consolidated copy of the Information Technology Act, 2000 as amended by the Information Technology (Amendment) Act, 2008, on the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 as originally notified on 25 February 2021 and on the CERT-In Directions of 28 April 2022, read with the amendments made to the Act by the Jan Vishwas (Amendment of Provisions) Act, 2023 and by section 44 of the Digital Personal Data Protection Act, 2023, as consulted on 2 October 2026. Commencement notifications, other amendments, rules, directions and the current position of each provision are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.