New Delhi: The Supreme Court has dismissed an appeal by Sanofi India Ltd. seeking quashing of criminal proceedings against it in a bribery case linked to the Bhabha Atomic Research Centre (BARC), holding that a corporation can be prosecuted for offences requiring mens rea even without identifying or arraigning the individual employee whose acts and state of mind are to be attributed to it, and laying down a three stage framework for determining when such attribution should occur.
A Bench of Justice J.B. Pardiwala and Justice Manoj Misra was hearing an appeal against a judgment of the Karnataka High Court dated 15.02.2019, which had declined to quash proceedings pending before the Special Judge for CBI Cases, Bengaluru, against Sanofi India, arrayed as accused no. 2 alongside Dr. P. Anand, a Scientific Officer at BARC, arrayed as accused no. 1.
According to the chargesheet, Dr. Anand had, during procurement of medicines for BARC's Rare Materials Project between 2011 and 2016, either misclassified items as proprietary, omitted competing bidders, or declined to place orders with the lowest bidder, so as to favour Sanofi, causing a wrongful loss of about Rs 3,53,361 to BARC, and had received illegal gratification of Rs 42,750 from the company. No employee or official of Sanofi was named as an accused in the chargesheet.
Before the High Court and the Supreme Court, Sanofi's counsel argued that under the identification principle recognised by English courts in Tesco Supermarkets Ltd. v. Nattrass, a corporation can be held liable for offences requiring mens rea only through its directing mind and will, and that since no such alter ego of the company had been identified or arraigned in the chargesheet, the prosecution against the company alone could not be sustained.
The CBI opposed the appeal, relying on the Supreme Court's earlier decisions in Iridium India Telecom Ltd. v. Motorola Inc. and Standard Chartered Bank v. Directorate of Enforcement to submit that a corporation can be prosecuted without identifying or arraigning any individual employee, and that there was sufficient material on record to prima facie establish a conspiracy between Sanofi and Dr. Anand.
Undertaking an extensive review of corporate criminal liability jurisprudence, including the English decisions in Tesco Supermarkets, Meridian Global Funds Management Asia Ltd. v. Securities Commission and the Barclays cases, as well as Indian precedents, the court laid down a sequential three stage test for determining when the act and state of mind of a natural person should be attributed to a corporation: first, whether the company's constitutional documents or rules implied by company law vest that person with the power to act; second, if not, whether such power was validly delegated to the person along with genuine discretion and independence; and third, where neither stage applies, whether the purpose of the statute in question calls for a special rule of attribution having regard to the facts of the case.
Applying this framework to the question of quashing under Section 482 of the CrPC, the court held
neither identification nor arraignment of a natural person is a mandatory prerequisite for prosecuting a corporation, and that what the chargesheet must disclose is that the corporation itself committed the offence, which can be shown through averments about its own conduct and dealings without naming the individual who acted on its behalf.
The court distinguished its earlier rulings in Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd. and Hindustan Unilever Ltd. v. State of M.P., which had held that a company must be arraigned for prosecution of individuals to proceed under provisions such as Section 141 of the Negotiable Instruments Act, on the ground that those decisions were confined to statutes creating vicarious liability with an express condition precedent, and did not lay down a general rule applicable to a corporation's own direct prosecution.
The court clarified that quashing would still remain warranted where the allegations amount to bald assertions unsupported by material, and held that for a corporation, the allegations must at least prima facie reveal that some natural person acted on its behalf, 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 improbable. On a prima facie reading of the chargesheet in the present case, the court found these requirements satisfied, noting that natural persons had evidently acted on behalf of Sanofi and that the surrounding circumstances disclosed the possibility of the requisite mens rea, leaving the question of actual attribution to be determined at trial.
The court further clarified that the framework it had laid down was not confined to directors or persons formally in charge of a corporation's affairs, and that a quashing petition would ordinarily not succeed merely because the person concerned did not hold a particular position, since attribution requires the systematic application of the framework and answers to questions that can legitimately be considered only at trial.
Holding that the High Court had rightly declined to quash the proceedings, the Supreme Court dismissed the appeal, with the Registry directed to forward a copy of the judgment to all High Courts.
Case Title: Sanofi India Ltd. vs. Central Bureau of Investigation, Criminal Appeal No. 4250 of 2026 (arising out of Special Leave Petition (Criminal) No. 3597 of 2019)
