The Supreme Court’s ruling in Sanofi India Ltd. v. Central Bureau of Investigation establishes critical parameters for corporate criminal liability in India.
Core Rulings of the Supreme Court
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No Mandatory Indictment of Individuals: A criminal case against a company for offences requiring mens rea (guilty mind), such as cheating and criminal conspiracy, cannot be quashed merely because the investigating agency has failed to identify, name, or arraign a specific director, employee, or natural person as a co-accused.
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Prosecution of Juristic Persons: The court reaffirmed that a corporate entity can be prosecuted and convicted even though it lacks a physical body or a mind of its own. Where an offence carries a mandatory sentence of imprisonment, judicial discretion applies to substitute the jail term with a fine.
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Inference of Mens Rea: The mental state required for the crime can be inferred from the surrounding facts, corporate conduct, and circumstances of the case as a whole, and does not automatically collapse just because a specific individual has not yet been pinned down at the chargesheet stage.
The Established Three-Stage Framework for Attribution
To resolve how a human’s guilty mind can be attributed to an abstract corporate entity, the bench outlined a structured, hierarchical three-stage inquiry:
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Constitutional Documents: Courts must first inspect the company’s memorandum and articles of association to see who is formally vested with the power to act or undertake the specific transaction.
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Delegated Authority: If attribution is not clear from the constitutional structure, the court examines whether the relevant power or discretion was expressly or impliedly delegated to a person within the hierarchy.
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Statutory Purpose: If both prior stages fail, the court evaluates whether the underlying statute’s purpose warrants creating a special rule of attribution based on the transaction specifics.
The ruling stems from a CBI case involving allegations that Sanofi India conspired with a scientific officer from the Bhabha Atomic Research Centre (BARC) to supply pharmaceuticals at inflated rates. While no company employees were named in the 2017 chargesheet, the Supreme Court ruled that the lack of individual arraignment does not grant the corporation immunity from facing trial.
