Compounding of corporate offences allows settlement to avoid litigation but is barred where custodial punishment applies.
Compounding under the Companies Act, 1956 allows settlement of many corporate offences punishable by fine or by fine and imprisonment where permitted, providing a procedural alternative to litigation. The regime excludes offences attracting custodial sentences and those barred by a prior compounding restriction, and identifies representative compoundable and non compoundable provisions. When compounding is unavailable, directors and officers may face prosecution, arrest and criminal sanctions; arrested persons retain procedural safeguards. The article recommends compliance checklists to avoid penalties and notes companies often elect compounding to avoid economic offence proceedings and collateral regulatory consequences. (AI Summary)

Alternate dispute resolution expands court-ordered referrals to arbitration, conciliation, mediation and settlement to reduce case pendency.
Courts are empowered by amendment to the Civil Procedure Code to refer pending disputes to Arbitration, Conciliation, Judicial settlement including Lok Adalat, and Mediation; the courts may formulate and reformulate settlement schemes and effect compromises during ongoing trials to promote out-of-court resolution and reduce case pendency, supplemented by measures like electronic case management and administrative prioritisation of long-pending matters. (AI Summary)