The Command and the Wisdom behind the Law of Equality
Allah states: O believers! The Law of equality has been ordained on you (for cases of murder), the free for the free, the slave for the slave and the female for the female. Therefore, do not transgress the set limits, as others before you transgressed them, and thus changed what Allah has ordained for them. The reason behind this statement is that (the Jewish tribe of) Banu An-Nadir invaded Qurayzah (another Jewish tribe) during the time of Jahiliyyah (before Islam) and defeated them. Hence, (they made it a law that) when a person from Nadir kills a person from Quraizah, he is not killed in retaliation, but only pays a hundred Wasq of dates. However, when a person from Quraizah kills a Nadir man, he would be killed for him. If Nadir wanted (to forfeit the execution of the murderer and instead require him) to pay a ransom, the Quraizah man pays two hundred Wasq of dates double the amount Nadir pays in Diyah (blood money). So Allah commanded that justice be observed regarding the penal code, and that the path of the misguided and mischievous persons be avoided, who in disbelief and transgression, defy and alter what Allah has commanded them. Allah said:
From the brief introduction to the nature of righteousness appearing in verses before this, the text now enters into the description of related subsidiary injunctions. Under the first injunction in this connection, the verse prescribes the law of Qisas (even retaliation), that is, the killer will be killed, irrespective of the status of the parties involved. If the aggrieved party somewhat relents on its own and forgives the Qisas قصاص ، but does not forgive the offence totally, it will become necessary for the killer to pay diyah (دیۃ) or blood-money as fixed, in a fair manner, and promptly. The claimant too, should pursue the matter in a recognized manner causing no harassment to the defendant. This law of blood-money and pardon is a relief granted by Allah Almighty in His grace, otherwise, there would have been no choice but to face the punishment of death. If, after all that, anyone crosses the limit set by Allah, such as, the filing of a false or doubtful case of murder, or a post-pardon re-opening of a murder case, he will be severely punished. In the end, the verse points out that wise people should have no difficulty in seeing that the law of even retaliation does not take life, instead, it gives life, for such a deterrent law will make people fear the punishment of killing somebody and thus lives will be saved.
Islam has laid down the principle of retaliation in like measure (qisas). For example, ‘an eye for an eye and a tooth for a tooth’. Retribution for a killer means the forfeiture of his own life. In this way, on the one hand, a capital crime like the taking of life is effectively discouraged, for the fear of losing one’s own life deters one from taking another’s life and, as a result, the life of all the members of a society become protected. The killing of the killer guarantees the saving of lives in a society. Thus the objective of qisas is the protection of the members of society, and not revenge. Moreover, the vengeful feelings of the family of the murdered person are cooled, thus obviating the possibility of any further injurious activity. However, qisas in Islam permits a settlement to be arrived at between the killer and the killed. The heirs of the deceased person may, of course, opt for the execution of the killer, but they may also, if they so wish, accept blood-money instead, or even forgive him. The main aim of these alternatives is to guarantee the prevalence of brotherly feeling in Islamic society, and to prevent an atmosphere of rivalry taking root. Then the principle of blood-money has the special advantage of giving the bereaved family monetary compensation for the death of one of its members.
Uthmani text of the Madinah mushaf (King Fahd Complex). Translation: Saheeh International. Tafsir via Quran.com.