The Correction Centre was a section underneath the Collector's palace on Pluto. Lawbreakers who offended the Company were taken there as punishment and were subjected to torture. Many lost the memories due to the hardships they endured.
The Fourth Doctor was taken to the Induction Therapy Section of the centre after he had used an invalid consumcard and been rendered unconscious by balerium gas. He was put in a straitjacket in a cell alongside Bisham, another prisoner.
The Doctor managed to stand upright and hop across to a control bank to tamper with it. A man entered and fitted them both with helmets. When he went to turn them on, he was electrocuted and the control exploded. Marn visited the Doctor and had him released.
Leela and K9, believing the Doctor to still be a prisoner, broke into the Centre. Killing a guard and blasting the door open, they entered the Doctor's former cell. They freed Bisham and set off in search of the Doctor.
Later, Leela was herself taken to the Correction Centre. There she recovered, ready for an audience with the Collector, who visited her during this time. Following this, she was "placed under pending", which meant being tied to a wall in punishment. (TV: The Sun Makers)