(2) In such cases, if more persons than one are arrested, the Magistrate may, in like manner, award to each of them such compensation not exceeding one thousand rupees, as such Magistrate thinks fit.
(3) All compensation awarded under this Section may be recovered as if it were a fine and if it cannot be so recovered, the person by whom it is payable shall be sentenced to simple imprisonment for such term not exceeding thirty days as the Magistrate directs, unless such sum is sooner paid.
There must be direct and proximate nexus between the complaint and the arrest for the award of compensation under Section 358 of the Code. Before making an order for compensation, an opportunity to show cause against the order must be given to the complainant by following the natural justice.
Where an arrested person is discharged for want of evidence and no cognizance of any offence is taken and no case is heard, no compensation can be awarded under Section 358 of the Code.
In some cases, the judiciary ordered compensation by the State to be paid to the victims because of the failure of the police to process prosecution. In some cases, the judiciary ordered the police to bear the cost of petition against them filed by victims of their illegal acts.
In one case, Bombay High Court ordered the complainant to pay compensation to the harassed defendant. In another case, Bombay High Court ordered the complainant to pay the cost to the Government, rather than to the defendant.