Legislative Framework for Victim Compensation in India

When a crime is committed, the focus of the criminal justice system almost instinctively shifts toward the accused – investigation, trial, conviction, sentence. The victim, meanwhile, is often left to navigate trauma, financial loss, and broken lives with little formal support. India’s legislative framework, particularly through the Code of Criminal Procedure (CrPC), recognised this gap and built a set of provisions specifically to compensate crime victims. Sections 357, 358, 359, and the landmark Section 357A together form the statutory backbone of victim compensation in India – a framework that has only grown stronger with the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

The starting point: Section 357 CrPC and court-ordered compensation 🔗

Section 357 of the CrPC is the foundational provision for victim compensation in the Indian criminal justice system. It empowers a court, at the time of passing judgment, to direct that the whole or any part of the fine recovered from the convict be applied toward compensating the victim who suffered injury or loss due to the offence.

The section operates across several sub-clauses. Sub-section (1) links compensation to the fine imposed in the sentence – meaning a court can order payment from the fine amount to cover costs of the prosecution or to compensate any person for loss or injury caused by the offence. Sub-section (3) is particularly significant: it allows a court to order compensation even where the sentence does not impose a fine. This was a major expansion of the original provision, allowing courts to direct the accused to pay compensation independently of whether a fine was part of the sentence.

The Supreme Court, in Ankush Shivaji Gaikwad v. State of Maharashtra, made it clear that courts carry a mandatory duty to apply their mind to the question of victim compensation in every criminal case. A court cannot simply skip over this question – it must record reasons for either awarding or refusing compensation. The quantum, the court noted, must be determined based on factors such as the gravity of the offence, the severity of mental and physical harm suffered, financial losses sustained, and the capacity of the accused to pay.

Sub-section (4) further extends this power to appellate courts, including the High Court and Court of Session, which can also make or modify compensation orders while exercising their appellate jurisdiction.

Section 358: Compensation for groundless arrest 🔗

While Section 357 focuses on compensating victims of crime after conviction, Section 358 addresses a different, but equally important, scenario – wrongful arrest. Under this provision, if a person causes the arrest of another individual without sufficient grounds, and the Magistrate holds the arrest to be unjustified, the Magistrate may award compensation to the wrongly arrested person for loss of time and costs incurred.

The compensation under Section 358 is capped at ₹1,000 per person – a figure that reflects the provision’s age rather than the actual economic harm a wrongful arrest can cause in modern times. Where multiple persons are wrongfully arrested in the same incident, compensation can be awarded to each of them individually. If the compensation is not paid, it is recoverable as a fine, and failure to recover it can even result in simple imprisonment of up to 30 days for the person liable to pay.

The provision serves a dual purpose: it compensates the victim of a baseless arrest and acts as a deterrent against arbitrary misuse of arrest powers. The Bharatiya Nagarik Suraksha Sanhita, 2023 has retained this provision under Section 399 of the BNSS, preserving its protective function in the reformed criminal procedure framework.

Section 359: Costs in non-cognizable cases 🔗

Section 359 CrPC operates in a more specific context – non-cognizable cases. When a complaint in a non-cognizable case is dismissed or results in a conviction, the court has the power to order the accused to pay costs to the complainant, or the complainant to pay costs to the accused, depending on the outcome. These costs can include compensation for any loss caused.

This provision ensures that parties in non-cognizable cases – matters where the police cannot arrest without a warrant – also have a remedy for compensation where they have suffered as a result of the other party’s conduct, particularly if a complaint is found to be frivolous or vexatious.

The real shift: Section 357A and state-funded victim compensation 🔗

Despite the breadth of Section 357, it had a structural limitation: compensation was ultimately contingent on the conviction of the accused and the accused’s own financial capacity to pay. If the accused was acquitted, discharged, unidentified, or simply too poor to pay, the victim received nothing. For a large number of crime victims in India – particularly victims of sexual offences, trafficking, and violent crime – this meant justice remained out of reach.

Section 357A, inserted into the CrPC through the 2008 amendment (effective December 31, 2009), fundamentally changed this calculus. It introduced the concept of state-funded rehabilitative compensation, independent of whether the offender is convicted, acquitted, or even identified. It was added based on the recommendations of the 154th Report of the Law Commission of India and the Malimath Committee Report on Reforms of Criminal Justice System, 2003.

What Section 357A mandates 🔗

Section 357A places a statutory obligation on every State Government, in coordination with the Central Government, to prepare a scheme providing funds for compensating victims or their dependents who have suffered loss or injury due to crime and require rehabilitation. This is not a discretionary measure – it is a legislative mandate.

The provision operates through a structured mechanism. When a trial court concludes that the compensation awarded under Section 357 is inadequate for the victim’s rehabilitation, or when the accused is acquitted or discharged yet the victim requires support, the court can recommend compensation to the District Legal Services Authority (DLSA) or the State Legal Services Authority (SLSA). These bodies then determine the actual quantum to be awarded under the state’s Victim Compensation Scheme.

Four scenarios where compensation applies 🔗

Compensation under Section 357A can be granted in four distinct scenarios: first, upon conviction of the accused; second, where the accused is acquitted; third, where the accused is discharged; and fourth – crucially – where the offender is neither traced nor identified but the victim is known. In this last scenario, the victim or their dependents can directly apply to the DLSA or SLSA without waiting for any trial to conclude.

Interim relief and immediate support 🔗

Section 357A also addresses the urgency of post-crime support. Sub-section (6) empowers the DLSA or SLSA to order immediate first-aid or medical benefits free of cost, or any other interim relief, even before the final determination of compensation. This statutory recognition of interim relief is significant – victims do not have to wait until the end of a lengthy trial to access basic support.

Retrospective application 🔗

The Kerala High Court, in District Collector Alappuzha v. District Legal Services Authority, Alappuzha, held that Section 357A(4) is a substantive provision with retrospective character. This means victims are entitled to compensation even for crimes that occurred before the provision came into force, provided they satisfy the conditions under sub-section (4). This prevents technicalities of timing from denying relief to deserving victims.

Sections 357B and 357C: Additional layers of protection 🔗

The 2013 amendment to the CrPC, effective February 3, 2013, added two further provisions that strengthen the victim compensation framework, particularly for survivors of sexual violence.

Section 357B clarifies that compensation awarded by the State Government under Section 357A shall be in addition to – not in substitution of – any fine paid to the victim under Sections 326A, 376AB, 376D, and 376DB of the IPC. This ensures victims are not shortchanged by being offered state compensation as a trade-off against fine-based compensation from the convict.

Section 357C mandates that all hospitals – public or private – must immediately provide first-aid or medical treatment, free of cost, to victims of offences covered under Sections 326A, 376, 376A to 376E of the IPC, and must immediately inform the police. This removes any financial barrier to emergency care for survivors of acid attacks, rape, and related offences.

The Central Victim Compensation Fund (CVCF) 🔗

To support states in implementing their compensation schemes and to ensure some degree of national uniformity, the Ministry of Home Affairs introduced the Central Victim Compensation Fund (CVCF) Scheme in 2015, revised in 2017. The CVCF provides financial support particularly to victims of rape, acid attacks, human trafficking, and women killed or injured in cross-border firing. It prescribes minimum compensation amounts for heinous crimes and aims to standardize the otherwise fragmented state-level compensation landscape.

The BNSS, 2023: Carrying the framework forward 🔗

The Bharatiya Nagarik Suraksha Sanhita, 2023, which came into effect on July 1, 2024, has replaced the CrPC while preserving and strengthening the victim compensation architecture. Section 396 of the BNSS replaces Section 357A of the CrPC, retaining the mandate on state governments to run victim compensation schemes and the authority of DLSAs and SLSAs to disburse compensation and interim relief. Section 395 of the BNSS corresponds to the old Section 357. Sections 397 to 399 deal with free medical treatment for victims of specified offences, witness protection, and compensation for groundless arrest respectively – creating a more integrated cluster of victim rights within the new code.

Unlike Section 357A, which sometimes suffered from interpretive ambiguity and uneven state implementation, Section 396 of the BNSS signals a clearer legislative intent to enshrine victim dignity and rehabilitation at the heart of criminal procedure – consistent with the constitutional guarantee of life and personal liberty under Article 21.

Challenges in the current framework 🔗

Despite the legislative progress, the framework faces real-world challenges. Lack of awareness, especially in rural areas, means many victims never claim compensation they are legally entitled to. The quantum of compensation varies dramatically across states – from as low as ₹25,000 in some states to ₹10 lakh in others for similar crimes. Administrative delays in disbursal remain a persistent concern. Many states historically relied on general relief funds rather than framing dedicated Victim Compensation Schemes as required by Section 357A, creating gaps in implementation.

The judiciary has pushed back against these lapses. In Suresh v. State of Haryana, the Supreme Court directed that interim compensation should be awarded immediately in deserving cases without waiting for the conclusion of proceedings. In Mallikarjuna Kodagali v. State of Karnataka, the Court stressed that victims hold rights equivalent in seriousness to those of the accused – rights that cannot be overlooked simply because a trial is ongoing.

What this framework means for justice 🔗

The progression from Section 357 to Section 357A – and now to Section 396 of the BNSS – represents a fundamental shift in how Indian law conceptualises justice. Justice is no longer solely about punishing the offender; it also requires restoring the victim. The state is no longer a passive observer waiting for the trial to run its course; it has an active, constitutional obligation to step in, compensate, and rehabilitate. When the offender cannot pay, or when no one is even identified, the state must still ensure the victim does not bear the loss alone.

This is compensatory jurisprudence at its most meaningful – an acknowledgment that the criminal justice system must serve those in whose name it operates: the victims.

What do you think? If a crime victim receives compensation from the state under Section 357A even when the accused is acquitted, does this risk blurring the line between criminal liability and state welfare? And given the wide disparity in compensation amounts across states, should India move toward a uniform national victim compensation standard rather than leaving it to individual state schemes?

References

1. https://www.lexology.com/library/detail.aspx?g=6a02687b-b95a-498f-91ce-a0053747e0c7
2. https://capitalvakalat.com/blog/section-358-crpc/
3. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1812410&reg=3&lang=2
4. https://www.legalservicesindia.com/law/article/1783/5/Section-357A-4-CrPC-Is-A-Substantive-Provision;-Victims-Entitled-To-Compensation-Even-For-Crimes-That-Occurred-Prior-To-Its-Enactment
5. https://nja.gov.in/Concluded_Programmes/2022-23/P-1341_PPTs/3.Victim%20compensation%20scheme%20-Session%20V.pdf
6. https://www.ijrti.org/papers/IJRTI2507052.pdf
7. https://juriscentre.com/2025/04/14/victim-compensation/
8. https://www.vintagelegalvl.com/post/study-on-victim-compensation-scheme-under-section-357a-of-the-crpc