Section 96 of CPA : Section 96: Compounding Of Offences

Explanation using Example

Imagine that a local electronics store has been found guilty of selling defective products and not providing adequate after-sales service, which is a violation under sections 88 and 89 of the Consumer Protection Act, 2019. Before the prosecution begins, the store owner approaches the Central Authority to compound the offence. The Central Authority, upon being satisfied with the store owner's commitment to rectify the issues and compensate affected consumers, agrees to compound the offence. The store owner pays the prescribed amount, which is less than the maximum fine for the offence. The court grants leave for the compounding, and as a result, the store owner is not prosecuted.

However, the act also states that if the store owner commits a similar offence within the next three years, the compounding option will not be available for this subsequent offence. If after three years the store owner commits a similar offence, it will be treated as a first offence in terms of compounding eligibility.

After the compounding of the offence, no further legal proceedings are pursued against the store owner for this particular violation, and the acceptance of the compounding fee by the Central Authority is considered an acquittal.