1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act for any contravention, not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may, on receipt of an application from the person committing such contravention either before or after the institution of any proceeding, be compounded by an officer of the Reserve Bank duly authorised by it in this behalf.
(2) Where a contravention has been compounded under sub-section (1), no proceeding or further proceeding, as the case may be, shall be initiated or continued, as the case may be, against the person committing such contravention under that section, in respect of the contravention so compounded.
Simplified Explanation
Section 31 of the Payment and Settlement Systems Act, 2007 grants the Reserve Bank of India (RBI) the authority to compound offences for certain contraventions under the Act. This provision provides a mechanism for the settlement of offences that do not involve imprisonment, allowing the offender to avoid further legal proceedings by paying a penalty or taking corrective actions.
Key Provisions:
- Compounding of Offences:
- The RBI has the power to compound offences that are punishable under the Act, except for those punishable with imprisonment only or imprisonment along with a fine.
- The offence may be compounded if the person committing the contravention applies to the RBI.
- The application for compounding can be made either before or after any legal proceedings have been initiated.
- Procedure for Compounding:
- The RBI officer duly authorised to deal with such matters can accept the application and decide whether to compound the offence.
- If the contravention is compounded, the person who committed the offence may avoid any further legal action in relation to the contravention that has been compounded.
- Effect of Compounding:
- Once an offence is compounded, no further legal proceedings will be initiated or continued against the person for the same contravention.
- This provision offers a chance to resolve the matter without the need for prolonged litigation or punishment.
Practical Implications:
- Alternative to Prosecution:
- This section provides an alternative to prosecution, which can be a significant relief for parties who may have inadvertently violated the law and prefer to settle the matter rather than face potential legal consequences.
- No Imprisonment-Only Offences:
- Compounding is not available for offences punishable with imprisonment alone, or those involving both imprisonment and a fine. This ensures that serious violations that warrant imprisonment are not eligible for settlement through compounding.
- Discretion of the RBI:
- The decision to compound an offence is at the discretion of the RBI officer. This gives the RBI flexibility in handling contraventions based on the circumstances of each case.
- Finality of Compounded Offences:
- Once an offence has been compounded, no further action will be taken, ensuring that the matter is considered resolved, provided the compounding fee is paid or any corrective measures are taken.
Conclusion:
Section 31 provides a compounding mechanism for minor contraventions under the Payment and Settlement Systems Act, allowing the offender to avoid prolonged legal proceedings. It also ensures that offences involving imprisonment cannot be compounded, thus keeping serious violations within the criminal justice system. The provision promotes flexibility and efficiency in resolving regulatory breaches while preventing unnecessary litigation.
