Prohibition on penalties for minor breaches: penalties must be proportionate, specified, and preceded by an opportunity to be heard. Officers must not impose penalties for minor breaches or easily rectifiable documentation errors made without fraudulent intent or gross negligence; penalty quantum must be commensurate with the breach. No penalty may be imposed without an opportunity to be heard, and orders imposing penalty must specify the nature of the breach and the legal basis. Voluntary disclosure before discovery is a mitigating factor. The section excludes cases where penalties are prescribed as a fixed sum or fixed percentage.