Company Can Be Prosecuted for Mens Rea Offences Even Without Arraigning Its Officers; Supreme Court Lays Down Three-Stage Test for Corporate Criminal Liability
Case Name: Sanofi India Ltd. v. Central Bureau of Investigation
Date of Judgment: 7 September 2026
Citation: 2026 INSC 957
Bench: Justice J.B. Pardiwala and Justice Manoj Misra
Held: The Supreme Court held that criminal proceedings against a company cannot be quashed under Section 482 CrPC merely because the investigating agency has neither identified nor arraigned a natural person, such as a director, officer or employee, alongside the company. A corporation may be prosecuted for an offence requiring mens rea because the acts and mental state of a natural person acting on its behalf can be attributed to it.
At the threshold stage, it is sufficient if the allegations prima facie disclose that some natural person acted on behalf of the corporation, the conduct is connected with the alleged offence, and the surrounding circumstances make the existence of the requisite mens rea reasonably possible rather than patently absurd or inherently improbable. The conclusive determination of whose acts and mental state are attributable to the company ordinarily requires evidence and must be undertaken during trial.
The Court clarified that corporate mens rea must exist in full in at least one natural person and cannot be constructed by combining the incomplete knowledge or mental states of different individuals.
Summary: Sanofi India Ltd. was prosecuted along with a BARC Scientific Officer for alleged offences under Sections 120B and 420 IPC and provisions of the Prevention of Corruption Act, 1988. The prosecution alleged that medicines were procured from the company through manipulated tender processes, resulting in wrongful loss to BARC and corresponding wrongful gain to the accused. It was also alleged that illegal gratification was paid by the company to the public servant. However, no director, employee or other official of Sanofi India was made an accused in the chargesheet.
Sanofi India sought quashing of the proceedings on the ground that a company cannot independently form the mens rea required for criminal conspiracy and cheating. It argued that unless the natural person constituting its “directing mind and will” was identified and prosecuted, the criminal proceedings against the company could not continue.
The Karnataka High Court rejected this contention and held that prosecution of a corporate entity was maintainable even without arraigning its directors or persons responsible for its affairs. Sanofi India consequently approached the Supreme Court.
The Supreme Court undertook an extensive examination of corporate criminal liability in India and comparative English law. It reiterated that a company can be prosecuted for offences involving mens rea and for offences prescribing both imprisonment and fine, although only a fine can effectively be imposed upon a juristic person. An exception may arise where imprisonment is the only prescribed punishment or where the offence necessarily involves personal malicious intent incapable of being attributed to a corporation.
Recognising that neither the IPC nor the Bharatiya Nyaya Sanhita, 2023 explains how an individual’s mens rea is to be attributed to a company, the Court formulated a hierarchical and sequential three-stage framework:
- The court must first determine whether the company’s constitutional documents or company law vest the concerned person with the authority to perform the relevant act.
- If attribution is not established at the first stage, the court must examine whether such authority was expressly or impliedly delegated to that person with sufficient discretion and independence.
- If the first two stages do not establish attribution, the court must consider whether the purpose of the penal provision requires the creation of a special rule of attribution and whether the concerned person falls within that rule.
The inquiry must be transaction-specific. A person’s status or seniority alone does not automatically make their acts those of the company. Conversely, attribution is not confined to directors or formally designated officers; the acts of other persons may also be attributed where the applicable test is satisfied.
The Court distinguished decisions such as Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd., observing that the requirement to arraign a company before prosecuting its officers arose from the specific vicarious-liability framework under Section 141 of the Negotiable Instruments Act. That principle cannot be reversed to create a general rule that an officer must invariably be arraigned before the company itself can be prosecuted.
Decision: The Supreme Court found that the chargesheet and the material on record prima facie indicated that natural persons had acted on behalf of Sanofi India in connection with the alleged procurement irregularities. The surrounding circumstances also disclosed the possibility that the acts were performed with the requisite mens rea.
The absence of identification or arraignment of a particular employee or officer was, therefore, insufficient to quash the proceedings. The appeal filed by Sanofi India Ltd. was dismissed, and the criminal proceedings were permitted to continue.