Compounding, adjudication and condonation: choosing the right route, and the scheme that closes on 31 August 2026

3 August 2026 9 min read Scheme closes 31 August 2026 Three different things are routinely called the same thing. Adjudication is what happens when a provision says a person shall be liable to a penalty — it is civil, and the Registrar imposes it. Compounding is what happens when a provision says an offence is punishable with a fine — it is criminal, and you apply to buy peace. Condonation excuses a delay where the underlying act was otherwise lawful. Choosing the wrong one costs a quarter and achieves nothing, because the authority you have applied to has no jurisdiction over what you have asked it to do. In short The commonest error is applying to compound a default under section 92 or section 137. Those were decriminalised. They now carry penalties, not fines, so there is no offence to compound and the Regional Director cannot help you. Compounding threshold: the Regional Director where the maximum fine does not exceed ₹25 lakh; the NCLT above...