Concerned with the misuse of compensation law by the fake rape victims, the High Court issued a series of guidelines which are as follows:

1. The obligation of the criminal court to consider direction for payment of compensation under Section 357 Cr. PC (as indeed under other provision of law such as Section 5 of Probation of Offenders Act) is a matter of inquiry by the criminal court and the amount paid there-under is subject to recovery from the person found guilty for the offence the commission of which has been proved.
2. The Victim Compensation Fund set up by the State in terms of the Victim Compensation Scheme under Section 357A Cr. PC is at the disposal of Legal Services Authority and the criminal court in seisin of the case may only “make recommendation” to, but not “direct”, such authority to pay compensation to the victim (or his dependents) from such fund. In this view, the legal services authority before it decides to award compensation and disburses the amount must make proper inquiry to independently find whether a case is made out in law, and under the scheme, for such compensation to be paid guided, of course, by the evidence led at trial and conclusion of the court based thereupon.
3. Before making a recommendation under sub-Section (2) of Section 357A Cr. PC for compensation to be paid in a criminal case wherein a person has been found guilty of complicity in the crime which has been proved, the criminal court must make inquiry as to whether : (a). The victim (or his dependents) had suffered “loss or injury as a result of the crime” and “require rehabilitation”; (b). the compensation can be ordered to be paid under Section 357 Cr. PC by the convict; (c). the compensation awarded under Section 357 Cr. PC is “not adequate” for “rehabilitation”;
4. If a criminal case ends in “acquittal” or “discharge” of the person arraigned as the accused, the criminal court may “make recommendation for compensation” if : (a). the commission of the offence has been duly proved; (b). the victim of such offence has been duly identified; and (c). there is a case made out of “loss or injury as a result of the crime” suffered by such victim requiring “rehabilitation”.
5. If the investigation into the crime which is alleged does not lead to the offender being “traced” or “identified”, the legal services authority may award “adequate compensation” but, before it does so, it must hold an enquiry and find, on the basis of “tangible material”, that : (a). the crime was in fact committed; (b). there is a victim duly identified who has “suffered loss or injury as a result of the crime” and requires “rehabilitation”.
6. The authorisation in law by virtue of subsection (6) of Section 357A Cr. PC to arrange for “immediate first-aid facility or medical benefits” or “any other interim relief‖ to be made available to the victim, on the certificate of police or the magistrate also necessarily requires due proof, on the basis of “tangible material”, of commission of an offence and it having resulted in loss or injury on which account the victim is in need of being helped “to alleviate the suffering”
7. The payment of interim compensation under the Victim Compensation Scheme is “subject to final determination” of the right to receive compensation under the law and, therefore, it must be awarded and disbursed with appropriate riders to take care of the possibility of being recovered back in the event of it being ultimately concluded that the accusations were unfounded.
8. Unless the exigencies of the case so demand, compensation (whether interim or final) ought not be released by DSLSA in lump sum, care to be taken that the money meant for rehabilitation of the victim is not frittered away and also such that in the event of superior courts in hierarchy upturning the decision, the money if wrongly paid, can be recovered back and, for such purposes, the existing practice of DSLSA, as also ordained by various provisions of the Delhi Victim Compensation Scheme, 2018, to release the compensation in a phased manner should be scrupulously followed and ensured to be complied with by all concerned including the bankers of the authority and the beneficiary.
9. Unless the exceptional circumstances of the case so demand, the final compensation awarded by DSLSA in terms of the Victim Compensation Scheme under sub-Section (3) of Section 357 Cr. PC ought not be released by DSLSA unless and until the period allowed for bringing a challenge to the decision of the trial court (by appeal or a petition) has elapsed or if an appeal (or petition) be presented, before decision thereupon, it being incumbent on DSLSA to approach the superior hierarchal court to seek early release of compensation in case the prevalent circumstances concerning the victim so justify.