What is meant by contravention and compounding of contravention ?

'Contravention' is a breach of the provisions of any Act and Rules/ Regulations/ Notification/Orders/Directions/Circulars issued there under. 'Compounding of contravention' refers to the process of voluntarily admitting the contravention, pleading guilty and seeking redressal. According to Section 13 of Foreign Exchange Management Act, 1999 (FEMA) , the Reserve Bank of India is empowered to compound any contraventions except the contravention under Section 3(a) of the Act, for a specified sum after offering an opportunity of personal hearing to the contravener. It is a voluntary process in which an individual or a corporate seeks compounding of an admitted contravention. It provides comfort to any person who contravenes any provisions of FEMA, 1999 [except Section 3(a) of the FEMA ] by minimizing transaction costs. Willful, malafide and fraudulent transactions are, however, viewed seriously, which will not be compounded by the Reserve Bank of India.