NO NAME? NO ESCAPE FROM CRIMINAL PROSECUTION: SUPREME COURT ANSWERS IN SANOFI V CBI1
The Supreme Court has held that criminal proceedings against a company cannot be quashed merely because no natural person acting for it has been identified or arraigned. Allegations must prima facie reveal that a natural person acted on behalf of the company and that the surrounding circumstances do not render the existence of the requisite mens rea patently absurd or inherently improbable.
Background
Sanofi supplied pharmaceutical products to the Bhabha Atomic Research Centre (BARC). There were certain irregularities in the procurement of medicines, following which CBI filed a chargesheet against Sanofi and one of BARC’s officers for criminal conspiracy, cheating and offences under the Prevention of Corruption Act. No Sanofi employee or official was identified or arraigned as an accused.
Sanofi sought quashing of the criminal proceedings before the Karnataka High Court which was declined. Sanofi appealed.
Decision
The Supreme Court dismissed Sanofi’s appeal. It held that a company can possess mens rea only through attribution of a natural person’s acts and accompanying state of mind to the company.
The Court adopted a three-stage framework to determine when such attribution applies:
- Whether the company’s constitutional documents or company law vest the person concerned with the power to perform the relevant act.
- Whether that power was expressly or impliedly delegated to the person with sufficient discretion and independence in performing the act.
- If attribution cannot be established at either of the first two stages, whether the purpose of the statutory provision imposing liability, requires a special rule of attribution treating the person’s act and accompanying state of mind as those of the company.
The Court held that at the quashing stage, it was not expected to weigh evidence or conduct a mini trial. The allegations require to show that a natural person acted for the company, that the conduct related to the offence and that the surrounding circumstances do not make mens rea inherently improbable. In Sanofi’s case, the chargesheet and material on record met this threshold.
Conclusion
The judgment marks a significant shift in the landscape of corporate criminal liability in India. It underscores that corporate decision-making can now be scrutinized as part of an investigation. Industry stakeholders appear to be aligned in their response, with a growing consensus that greater emphasis must be placed on delegation of authority, approval mechanisms, and robust record-keeping practices within organizations.
Footnote
1. 2026 SCC OnLine SC 1790.
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