Section 96 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.
Section 96 lets the offences in sections 88 and 89 be compounded: that is, settled by paying a prescribed sum, either before or after a prosecution begins. The sum can never exceed the maximum fine for the offence, the Central Authority or a specially authorised officer may compound, a repeat offence within three years cannot be compounded, and acceptance of the sum is deemed to be an acquittal. If you face a notice under section 88 or 89, our legal dispute resolution team can help you weigh this option.
An offence under section 88 or 89 may be compounded, before or after the institution of prosecution, on payment of such amount as may be prescribed (96(1)). After a complaint is filed under section 92, compounding needs the leave of the court. The sum cannot exceed the maximum fine for the offence. The Central Authority or a specially authorised officer may compound (96(2)). A same or similar offence within three years of a compounded one cannot be compounded (96(3)). Once compounded, no further proceeding lies (96(4)), and acceptance of the sum is deemed an acquittal (96(5)).
Section 96 at a glance
| Sub-section | Subject | Key point |
|---|---|---|
| 96(1) | Compounding on payment | Offences under ss.88 and 89; before or after prosecution; amount as prescribed |
| 96(1) first proviso | Court's leave | Needed once a complaint has been filed under s.92 |
| 96(1) second proviso | Cap | The sum cannot exceed the maximum fine for the offence |
| 96(2) | Who compounds | Central Authority or an officer specially authorised by it |
| 96(3) | Repeat offence | Not available for same or similar offence within three years of the earlier compounding |
| 96(4) | Effect | No proceeding or further proceeding for the compounded offence |
| 96(5) | Acquittal | Acceptance of the sum is deemed an acquittal |
Section 96(1): what can be compounded and on what terms
"Any offence punishable under sections 88 and 89, may, either before or after the institution of the prosecution, be compounded, on payment of such amount as may be prescribed."
- Only sections 88 and 89. Section 88 punishes failing to comply with a Central Authority direction under sections 20 and 21; section 89 punishes a false or misleading advertisement. See sections 88–89 on those offences. The offences in sections 90 and 91 (adulterant and spurious goods) and the offence in section 72 are not within the words of section 96.
- Before or after prosecution. The offence may be compounded before a case is filed or while it is pending.
- "As may be prescribed". The amount is set by the rules; section 101(2)(zh) lists "the amount for compounding offences under sub-section (1) of section 96" as a rule-making head. This article gives no figure.
The two provisos
First proviso. "No compounding of such offence shall be made without the leave of the court before which a complaint has been filed under section 92." Once the Central Authority or its officer has filed a complaint in court, the court's leave is needed. Before a complaint is filed, the proviso does not apply. See sections 92–93 on cognizance of offences.
Second proviso. "Such sum shall not, in any case, exceed the maximum amount of the fine, which may be imposed under this Act for the offence so compounded." So for section 88 the sum cannot exceed twenty lakh rupees. For section 89, the maximum fine is ten lakh rupees for a first offence and fifty lakh rupees for a subsequent one, as printed in that section. The text does not say which maximum applies where the offence is a subsequent offence under section 89, but the wording ("the maximum amount of the fine, which may be imposed under this Act for the offence so compounded") points to the maximum for that offence.
Section 96(2): who may compound
"The Central Authority or any officer as may be specially authorised by him in this behalf, may compound offences under sub-section (1)." The word "him" refers back to the Central Authority; the text does not say who in the Authority authorises, and it is another drafting point flagged here without correction. The section does not give compounding power to the court or to a Commission; the court's role is to give leave where a complaint is pending.
Section 96(3): the three-year bar
"Nothing in sub-section (1) shall apply to person who commits the same or similar offence, within a period of three years from the date on which the first offence, committed by him, was compounded."
The Explanation: "any second or subsequent offence committed after the expiry of a period of three years from the date on which the offence was previously compounded, shall be deemed to be a first offence."
| Situation | Position |
|---|---|
| Same or similar offence within three years of the compounding | Cannot be compounded |
| Offence after three years from the compounding | Deemed a first offence; compounding again is open |
Two points: the period runs from "the date on which the first offence ... was compounded", not from the date of the offence; and "same or similar" is not defined. The text does not say whether an offence under section 88 is "similar" to one under section 89.
Section 96(4) and (5): effect of compounding
96(4). "Where an offence has been compounded under sub-section (1), no proceeding or further proceeding, as the case may be, shall be taken against the offender in respect of the offence so compounded."
96(5). "The acceptance of the sum of money for compounding an offence in accordance with sub-section (1) by the Central Authority or an officer of the Central Authority empowered in this behalf shall be deemed to amount to an acquittal within the meaning of the Code of Criminal Procedure, 1973."
Note on the statutes cited: the Code of Criminal Procedure, 1973 was replaced from 1 July 2024 by the Bharatiya Nagarik Suraksha Sanhita (BNSS). This article gives no new section numbers.
- Because acceptance is deemed an acquittal, the person is not treated as convicted of the compounded offence.
- The text does not say whether a compounded offence counts as a "subsequent offence" under section 89 for later penalties; it speaks of acquittal and of the three-year bar for compounding.
Example. The Central Authority files a complaint against a company under section 89 over a misleading advertisement. The company applies to compound. The court grants leave, and the company pays the prescribed sum, which cannot exceed the maximum fine for the offence. Once the sum is accepted, the matter ends and is deemed an acquittal. If the company runs a similar advertisement within three years of that date, compounding is not available.
Where the money goes
Section 97 says the amount collected under section 96 is credited to such fund as may be prescribed. See sections 95, 97 and 98.
What the text leaves out
- The amount, and how the Central Authority decides it within the cap.
- Whether the offender or the Authority must apply, and in what form.
- Whether the court may refuse leave and on what grounds.
- Whether compounding is available for an offence by an officer under section 93; it is not mentioned.
Need help considering compounding?
Compounding depends on the offence, the stage of the case and your history in the last three years. Our team can review the notice or complaint and the likely amount, which the rules fix. Begin with a legal dispute resolution consultation and bring the complaint, any direction and past records.
Key takeaways
- Only offences under sections 88 and 89 can be compounded under section 96.
- Compounding is by payment of an amount as prescribed, before or after prosecution; court's leave is needed once a complaint is filed.
- The sum cannot exceed the maximum fine for the offence.
- The Central Authority or a specially authorised officer compounds.
- A repeat within three years cannot be compounded; compounding is deemed an acquittal.
Read next
- Sections 88–89: non-compliance with CCPA directions and misleading advertisement offence
- Sections 92–93: cognizance of offences and vexatious search
- Sections 99–100: Central Government directions and Act not in derogation
- Penalties Under Consumer Protection Act 2019
Disclaimer: Based on the Consumer Protection Act, 2019 as enacted, as consulted on 1 October 2026. Monetary limits, fees and procedure are set or revised by rules and regulations made under the Act and should be checked in their current form. This article is general information, not legal advice; check the official text before acting.