The Code of Criminal Procedure, 1973 (CrPc)
250. Compensation for aceusation without reasonabie cause.
(1) lf in any case instituted upon complaint or upon information given to a police officer or to Magistrite, one or more persons is or are acccused before a Magistrate of any offence triable by a Magistrate, and the Magistrate by whom the case is beard discharges or acquits all or any of the accused, and is of opinion that there was no reasonabie ground for making the accusation against them or any of them, the Magistrate may, by his orde of discharge or accuital , if the person upon whose complaint or information or the accusation is present, call upon him forth how cause why y be should not pay compensation to such accused or to cach or any of such accused when there are more than one or, if such peson is not present direct the issue of a summons to him to appear and show cause as aforesaid.
(2) The Magistrate shall record and consider any cause which such complainant or informant may show, and if he is satisfied that there was no reasonable ground for making the accusation, may for reasons to be recorded, máke an order that compensatíon to such amount not exceeding the amount of fine he is empowered to impose, as he may determine, be paid by such complainant or informant to the accused or to each or any of them.
(3) The Magistrate may, by the order directing payment of the compensation under sub-section (2) further order that, in default of payment, the person ordered to pay such compensation shall under go simple imprisonment for a period not exceeding thirty days.
(5) No person who has been directed to pay compensation under this section shall, by reason of such order, be exempted from any civil or criminal liability in respect of the complaint made or information given by him:
Provided that any amount paid to an accused person under this section shall be taken in to account in awarding compensation to such person in any subsequent civil suit relating to the ssame matter.
(6) A complainant or informant who has been ordered under sub-section (2) by a Magistrate of the second class to pay compensation exceeding one hundred rupees, may appeal from the order as if such complainant or infonnant had been convieted on a trial had by such Magistrate.
(7) When an order for payment of compensation to an accused person is made in a case which is subject to appeal under sub-section (6), the compensation shall not be paid to him before the period allowed for the presentation of the appeal has elapsed, or, if an appeal is presented, before the appeal has been decided; and where such order is made in a case which is not so subject to appeal the compensation shall not be paid before the expiration of one month from the date of the order.
(8) The provisions of this section apply to summons-cases as well as to warrant cases.