Section 93: Compounding of offences

The Occupational Safety, Health and Working Conditions Code, 2020 (Act No. 37 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter XI: Offences and Penalties
Competent Labour Forum
Act No. 37 of 2020

Legal Commentary & Landmark Judgments: Section 93

Section 93 of the Code provides a modern mechanism for the compounding of offenses, authorizing designated compounding officers to compound non-hazardous and minor offenses before or after the institution of prosecution upon payment of prescribed compounding sums.

  • Decriminalization via Statutory Compounding: Allows employers to settle designated first-time regulatory offenses through monetary compounding, avoiding prolonged criminal trials and criminal convictions.
  • Strict Exclusion of Fatal & Hazardous Offenses: Explicitly bars compounding for offenses causing death or serious bodily injury (Section 85) or hazardous process contraventions (Section 87), preserving criminal accountability for grave defaults.
  • Social Security Fund Credit Mandate: Mandates that all compounding fees collected under this section must be credited to the Social Security Fund established under the Code for the welfare of unorganized workers.
Key Landmark Precedents:
  • P. Mohanraj v. Shah Brothers ISPAT Pvt. Ltd. (2021) 6 SCC 258: Supreme Court highlighted that compounding mechanisms are vital statutory tools that balance commercial efficiency with regulatory deterrence.
  • M.C. Mehta v. Union of India (1987) 1 SCC 395: Supreme Court affirmed that fatal industrial disasters and toxic gas releases cannot be settled through monetary compounding or private compromise.
  • State of M.P. v. Kedar Narain AIR 1969 MP 110: Affirmed that statutory compounding completely extinguishes criminal liability for the compounded violation.
Courtroom Practice & Strategic Litigation Guidance:

Upon receiving an inspection notice for administrative or record-keeping lapses, management should immediately file an application for compounding under Section 93, paying the prescribed percentage to secure a complete release from prosecution.