Compensation in Lieu of Sentencing in Criminal Trials – “Can a criminal court replace jail time… with money?”

The Supreme Court just clarified this in Parameshwari v. State of Tamil Nadu (2026).Compensation is not a shortcut to avoid punishment. It cannot trivialize the offence. Sentencing must balance Gravity of offence, Impact on victim, Circumstances of accused, Societal interest. Compensation can supplement justice. but cannot substitute accountability in serious crimes.

Parameshwari v State of Tamil Nadu

17 February 2026

Citations: 2026 INSC 164 | 2026 SCO.LR 2(4)[17]

Bench: Justices Rajesh Bindal and Vijay Bishnoi

The Supreme Court held that compensation cannot always be treated as a substitute for a reduced sentence. Sentences cannot be reduced mechanically and should have a visible application of mind. 

The accused persons were convicted for offences of attempt to murder (Section 307), voluntarily causing hurt (Section 324) and grievous hurt (Section 326) under the India Penal Code, 1860. The Trial Court had ordered three years of rigorous imprisonment with a fine of ₹5000/- each. The High Court upheld the convictions and remitted the sentence to the period already undergone, with an enhanced compensation of ₹50,000/- each to the victim’s wife.

The Supreme Court set aside the High Court Judgement and observed that such compensation was a kind of “blood money”. The Court recognised that Section 395 of the Bharatiya Nagarik Suraksha Sanhita, 2023 granted monetary compensation to the victim, but only in addition to the sentence awarded and not as an alternative. The Court identified proportionality, facts and circumstances, societal impact, and aggravating and mitigating factors as basic considerations to be kept in mind when imposing a sentence.

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Keywords/phrases: Compensation in criminal cases—Section 395 of Bharatiya Nagarik Suraksha Sanhita, 2023—mechanical reduction of sentence—application of mind—payment of compensation not an alternative to prison sentence—compensation should consider facts and circumstances—aggravating and mitigating factors

Read the Judgement here

Parameshwari v. State of Tamil Nadu (2026)
Bench: Justices Rajesh Bindal & Vijay Bishnoi

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