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CS Professional · Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

Kaveri Textiles Ltd had an offence compounded on 10 March 2024. A similar offence was committed again on 15 January 2026, and the company now applies for compounding. What is the position under section 441?

It cannot be compounded. Section 441(2) says compounding is unavailable for a similar offence committed within three years of the date on which an earlier similar offence was compounded. The new offence falls within that period, so it is not treated as a first offence.

  1. AIt can be compounded as a first offence because the earlier one was compounded
  2. BIt cannot be compounded, because the similar offence occurred within three years of the earlier compoundingCorrect
  3. CIt can be compounded only if the sum paid is doubled
  4. DIt can be compounded only by the Regional Director

Explanation

Section 441(2) bars compounding of an offence committed within three years of the date a similar offence was compounded. The second offence on 15 January 2026 falls within three years of 10 March 2024. A fresh offence would count as a first offence only after the three-year period expires.

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