Overview of victim compensation scheme in India

Compensation can be used to achieve a variety of goals. One goal is to assist victims of crime in their recovery. Margery Fry, a British penal reformer and magistrate, was an early proponent of victim compensation stated that “the state could not absolve itself of all responsibility for its failure to protect, and as a result, it had an obligation to help victims”. The early development of India’s Penal Code emphasised victim reparation due to poverty. Section 545 of the Criminal Procedure Code, 1898 allowed courts to use fines for victim compensation, later Section 545 of the Cr.PC, 1898, replaced with Section 357, with major conceptual improvements in the Criminal Procedure Code, 1973 and includes various compensation avenues. Courts can now order compensation for losses, litigation costs, and wrongful detention, with specific provisions for false accusations and police misconduct.

Section 357 of the Cr.PC, 1973, adopts a fragmented approach to victim compensation, permitting courts to grant compensation to crime victims at the time of sentencing. Section 357(1) permits courts to impose fines and award victims a portion as compensation, while Section 357(3) allows for unlimited compensation amounts. Later, the Law Commission of India in 1973 recommended the introduction of Section 357-A into the Cr.PC (Section 396 of the Bharatiya Nagarik Suraksha Sanhita, 2023). Thereafter, in 2008, Section 357-A was inserted in the Code of Criminal Procedure, 1973 vide Criminal Law (Amendment) Act, 2008 also central government established the non-lapsable Nirbhaya Fund in 2013, with an initial corpus of Rs. 1000 crore and in 2015 Government of India set up the Central Victim Compensation Fund (CVCF) with initial corpus of Rs 200 crore, to provide support to the victims of rape, acid attack, human trafficking, and women killed and injured in cross border firing covering medical expenses and rehabilitation and also impose the duty on the court make such provisions effective and meaningful. The scheme empowered the courts to direct the State to pay compensation to the victim where “the compensation awarded under Section 357 is not adequate, or where the cases end in acquittal or discharge and the victim has to be rehabilitated”. The aforesaid scheme enables the District Legal Services Authority (DLSA) or the State Legal Services Authority (SLSA) to determine the payment of compensation on the basis of recommendation with the limit set by the State and on the basis of a recommendation made by the judge. The intention of the legislature appears to assist the victim at whatever stage his plight is noticed, both the current victims (including kith and kin) as well as the victims of the cases committed before the amendment introduced in 2009 to ensure restoration, reparation and rehabilitation of the victim. Each state must collaborate with the central government to implement this scheme, with the District Legal Service Authority determining compensation amounts. The law also allows victims to claim compensation even if the offender is unidentified. However, it limits judicial discretion and lacks clarity, as victims cannot seek additional compensation through the Legal Service Authority in certain cases.

The apex court in Manohar Singh v. state of Rajasthan (2015 AIR SCW 928) observed that we find that the Court of Sessions and the High Court have not fully focused on the need to compensate the victim, which cannot be taken to be integral to just sentencing. The order of sentences in a criminal case needs due application of the mind. The court has to give attention not only to the nature of the crime, prescribed sentence, mitigation and aggravating circumstances to strike a just balance in the needs of society and fairness to the accused, but also to keep in mind the need to give justice to the victim of the crime. In spite of legislative changes and decisions of this court, this aspect at times escapes attention. Rehabilitating the victim is as important as punishing the accused. Although a crime may go unpunished due to insufficient evidence, the victim’s plight shouldn’t be overlooked.

The implementation has been inconsistent, despite this provision. Some states have been more proactive in establishing comprehensive compensation schemes, while others have lagged, frequently due to financial constraints or bureaucratic inefficiencies. This inconsistency has resulted in substantial disparities in the manner in which victims are assisted across various regions of India, with numerous victims experiencing compensation that is either inadequate or delayed.

According to data up to 2023, the unutilized sum of the Nirbhaya Fund is ₹2,000–2,100 crore, while the unutilized amount in the Central Victim Compensation Fund is not officially specified; however, information indicates that hundreds of crores remain unutilized.

In order to strengthen the victim compensation framework, the Supreme Court recently discovered that trial courts are neglecting to provide explicit orders for compensation at the time of conviction or sentencing, resulting in a significant number of eligible victims not receiving compensation under statutory victim-compensation schemes (e.g., Section 357A CrPC). The Court further ruled that all Special and Sessions Courts in India were to issue appropriate directions for the payment of victim compensation in eligible cases. The Court emphasised that issuing these types of orders is not an option; rather, it is a legal obligation as stipulated by the law. Failure to comply may result in the victim’s legal rights being violated.

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