The most common and most likely answer to this crossword clue is the 2 plus 4 plus 2 plus 5 letter word ON PAIN OF DEATH
I've seen this crossword clue in The Daily Telegraph
O
N
P
A
I
N
O
F
D
E
A
T
H
Buddy explains!
The straight part
We know that "having dire penalties" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case having dire penalties = on pain of death.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.