Restitution sets out important purposes for the victim, the offender, and society. As a matter of fact, full restitution in the number of a victim’s losses is recognized as a critical step in the victim’s recovery.
Determination by court refers to a key part of the restitution analysis that an individual qualifies as a crime “victim” in that jurisdiction for purposes of asserting the right to restitution and that the defendant is legally responsible for the victim’s losses. If the victim who is sustaining the injury or loss is a poly victim, the analysis does not change.
Justice Krishna Iyer opined, “Victimology must find fulfillment not through barbarity but by compulsory recoupment by the wrongdoer of the damage inflicted, not by giving more pain to the offender but by lessening the loss of the forlorn”.
We saw that the traditional system fails when it comes to criminal justice for criminals.
The Court and the Legislature offer the mechanism of restitution, damages, and compensation. And the criminal court must recognize that the offender has found guilty. Victim  of the crime can obtain both, restitution as well as civil damages.
Restitution’s Purposes and Policy
Restitution laws are sui generis, emerged from a unique historical framework. These frameworks focus on correctional aims, including rehabilitation and deterrence.
The concept of restitution is not a new concept to the criminal justice system. In fact, in many ancient societies offenders were routinely required to recompense their victims for the losses they caused. While long available as a sanction, restitution has recently drawn increased interest as an alternative to incarceration. Viewed from the perspective of punishing a defendant, restitution will be termed as an effective rehabilitative penalty. Because it forces defendants to confront concretely—and take responsibility for—the harm they have inflicted. It appears to offer a greater potential for deterrence.
The Supreme Court regrets the failure of the Courts in awarding compensation to the victims in respect of Sec. 357 (1)  of the Crpc. The court endorses to all the courts to exercise the power available u/s 357 liberally, to meet the ends of justice.
To Recover in Restitution
Before awarding restitution, courts must determine that the individual seeking restitution is a victim. And for the purposes of claiming the right to restitution and that the defendant caused the victim’s losses. Generally, in determining whether an individual is a victim, the court considers whether the injury stems from the offense of conviction, or the conduct underlying that conviction.
A court can determine that the individual is a victim when causation comes to knowledge. Causation is of two types. “Factual” cause (also referred to as “direct” or “but for” cause) and legal cause (also referred to as “proximate” cause). Some statutes demand for both types of causation for a victim to entitle as restitution, while others require only one.
Under the factual cause test for causation, the party must prove that the harmful result would not have occurred but for the defendant’s conduct—in other words, it is the factual question of whether a particular event produced a particular result. Legal causation focuses on whether legal policy supports the defendant being held responsible for the injury caused by that conduct. The legal causation inquiry typically focuses on whether the result was reasonably foreseeable or whether defendant’s conduct was a substantial factor in bringing about the result.”
Far from being into a novel approach to sentencing, restitution has been employed as a punitive sanction. In earlier societies, it was standard practice to require an offender to recompense the victim or his family for any loss caused by the offense. The primary focus of restitution was not to compensate the victim. But to protect the offender from violent retaliation by the victim or the community. It was a means by which the offender could buy back the peace he had broken. As the state gradually established a monopoly over the institution of punishment, and a division between civil and criminal law emerged. Civil Law describes the victim’s right to compensation.
 Section 2(wa) of the Cr.PC defined “victim”. “Victim” means a person who has suffered any loss or injury caused by reason of the act or omission for which the accused person has been charged and the expression “victim” includes his or her guardian or legal heir.”
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 Hari Singh vs. Sukhbir Singh & Ors (1988) 4 SCC 551