In the course of discussing whether a person who commits an act that will theoretically obligate him to receive two separate punishments will only receive the more severe one, the Gemara quotes the teaching of Tanna dvei Rabbi Hizkiyya that a person who kills another as a consequence of poking out his eye will not be responsible for the eye and the murder. The source brought for this is the famous passage, “Ayin tahat ayin – an eye for an eye” (Shemot 21:24) – which is interpreted to limit the punishment. “An eye for an eye,” but not “a life and an eye for an eye.”
The Torah’s statement that we punish “an eye for an eye” is understood by the Sages to refer to a monetary obligation rather than a physical punishment. In a lengthy discussion that appears in Massekhet Bava Kamma (dapim 83–84), a number of Sages take turns responding to the Gemara’s suggestion that perhaps the pasuk should be understood according to its simple meaning. All are in agreement that it is to be interpreted as payment, not losing an eye.
In his Mishneh Torah (Hilkhot Hovel U’Mazik 1:3-6) the Rambam explains that the Torah chose to use this language, rather than simply state that personal injury will result in monetary compensation, in order to emphasize that someone who injures another really deserves to suffer the same injury that he inflicted on his fellow. This notwithstanding, the laws of the Torah only require restitution, and not corporeal punishment. In a clear attempt to dispel any doubts about this interpretation, the Rambam further states that this ruling was an oral tradition received by Moses on Mount Sinai, and that this was the practical ruling of the courts in the Land of Israel beginning with the time of Yehoshua and Shmu’el haRamati and continuing until contemporary times.