The Supreme Court held that a company can be prosecuted for offences requiring mens rea even without arraigning any director or employee, laying down a framework for attributing criminal intent to corporations.
New Delhi: In a significant ruling on corporate criminal liability, the Supreme Court has held that a company can be prosecuted for an offence requiring a guilty mind (mens rea) even without any of its directors, officials or employees being named alongside it as an accused rejecting the argument that a corporation cannot be tried unless the natural person who acted for it is also arraigned, and laying down a framework for when the acts and intent of an individual can be attributed to the company itself [Sanofi India Ltd. v. Central Bureau of Investigation].
A Bench of Justices J.B. Pardiwala and Manoj Misra, in a detailed 98-page judgment authored by Justice Pardiwala, dismissed an appeal by Sanofi India Ltd. seeking to quash a CBI chargesheet, and directed that a copy of the judgment be circulated to all High Courts — a marker of the ruling’s intended significance as a statement of law on the criminal liability of corporations.
The question before the Court
The appeal arose from a CBI case alleging that a Scientific Officer at the Bhabha Atomic Research Centre (BARC) had conspired with pharmaceutical companies to procure medicines at inflated rates and in excess of requirements. Sanofi India was named as an accused, charged under Section 120B read with Section 420 of the IPC (criminal conspiracy and cheating) and provisions of the Prevention of Corruption Act but, crucially, no employee or official of the company was arraigned as an accused in the chargesheet. The company argued before the Karnataka High Court, and then the Supreme Court, that a corporation cannot be prosecuted for a conspiracy offence independently of the natural persons who act on its behalf, since only through such persons can a company be said to form a criminal intent at all.
The narrow legal issue was therefore whether the criminal proceedings against the company were liable to be quashed solely because no natural person had been identified or arraigned alongside it a question that goes to the heart of how the criminal law treats a company, which, being an artificial juristic person, can only ever act through human beings.
How a company can possess a ‘guilty mind’
The Court’s answer rested on the doctrine of attribution the legal mechanism by which the acts and mental state of certain individuals are treated as those of the company itself. Surveying the development of the law in England and Wales (through the Tesco, Meridian and Barclays lines of authority) and in India (from Kalpnath Rai and Velliappa Textiles through Standard Chartered Bank and Iridium India), the Court affirmed the now-settled position that corporations are no longer immune from prosecution for offences requiring mens rea on the ground that an artificial person cannot form a guilty mind.
The judgment set out a framework for determining when a natural person’s conduct and state of mind may be attributed to the corporation, fixing the company with direct liability meaning that, once the framework’s requirements are met, the act and the intent in question are treated as the company’s own, rather than the company being made liable vicariously for another’s wrong. Importantly, the Court clarified that attribution is not confined to directors or those in formal positions of authority: it is not only persons holding such positions who may attribute their acts to the corporation, and a quashing petition will not succeed merely because the individual identified does not occupy a particular status or post. Whether a given person’s act and state of mind ought to be attributed to the company, the Court held, requires the systematic application of the framework — an exercise that ordinarily can be undertaken only at trial.
Vicarious liability distinguished
A key part of the reasoning was the Court’s careful distinction between the present case and an earlier line of authority the company had relied upon — principally Aneeta Hada v. Godfather Travels & Tours, which held that a company must be arraigned as an accused before its directors can be prosecuted under Section 141 of the Negotiable Instruments Act.
The Court explained that Aneeta Hada is tied to the specific statutory scheme of Section 141, which creates vicarious liability where the individual’s liability is entirely derivative of the company’s own commission of the offence, so that the company must necessarily be a party. That principle, the Court held, cannot be read as a general rule that the arraignment of a natural person is a prerequisite for a corporation’s prosecution; it applies only where the statute imposes vicarious liability with a condition precedent of that kind. The present case involved no such provision and it was precisely the absence of vicarious liability that required recourse to the attribution framework, which fixes the corporation with direct liability. The contention that the proceedings should be quashed for non-arraignment of a natural person was therefore rejected.
When can a corporation’s prosecution be quashed?
The Court was careful to hold that its ruling does not immunise corporations from having baseless prosecutions quashed at the threshold under Section 482 of the CrPC. It clarified that the ordinary test is retained: the allegations must disclose the commission of the offence, and where they do not or where they amount to bald allegations unsupported by any material quashing remains warranted. The object, the Court said, is to avoid two undesirable outcomes: that genuine prosecutions against corporations are stifled at the threshold, and that vexatious prosecutions are allowed to continue merely because the accused is a company.
For a corporation, however, the Court held that the allegations must at least prima facie reveal three things: that some natural person or persons acted on behalf of the corporation; that such action is referable to the offence in question; and that the surrounding circumstances do not render the existence of mens rea patently absurd or inherently improbable. This inquiry, it emphasised, is broad rather than microscopic confined at the threshold stage to examining whether the allegations disclose acts undertaken on the company’s behalf and a context in which the requisite guilty mind could have been present. Applying that test, the Court found that the chargesheet against Sanofi India prima facie disclosed that natural persons had acted on the company’s behalf in relation to the alleged offences, and that the circumstances gave rise, at least prima facie, to the possibility of the requisite mens rea which was sufficient to sustain the prosecution at this stage.
The result, and its significance
Dismissing the appeal, the Court held that the Karnataka High Court had rightly declined to quash the proceedings, and left the questions of identification and attribution to be worked out at trial. Nothing in the judgment amounts to a finding that the company is guilty; the ruling is confined to holding that the prosecution cannot be terminated at the threshold merely because no individual was named alongside the company.
The judgment’s importance lies in its clarification of a question that had long remained unsettled at the level of principle — how, and when, a corporation can be said to bear criminal responsibility for offences requiring intent, and whether it can stand trial alone. By affirming that a company can be prosecuted for such offences on the basis of direct attribution, by distinguishing that regime from the vicarious-liability provisions like Section 141 NI Act, and by setting out a structured test for both attribution and threshold quashing, the Court has provided a framework of considerable practical consequence for the prosecution of companies in corruption, fraud and economic-offence cases. The direction that the judgment be circulated to all High Courts underscores its intended reach as a guiding statement of the law on corporate criminal liability.
Case Title: Sanofi India Ltd. v. Central Bureau of Investigation [Criminal Appeal No. 4250 of 2026, arising out of SLP (Crl) No. 3597 of 2019]
Bench: Justice J.B. Pardiwala and Justice Manoj Misra
Citation: 2026 INSC 957
Date of Judgment: September 7, 2026