Doctrine of Attribution: How Courts Determine a Company’s Criminal Intent

Overview

The Case of Sanofi India Ltd. v. CBI, 2026 INSC 957 , governs the law on corporate criminal liability and the doctrine of attribution. Although the investigating agency did not identify the individual through whom the company acted, the Supreme Court allowed the prosecution to proceed and dismissed the appeal. The court also laid down a structured three-stage framework governing how corporate criminal liability is to be fixed under the law in cases involving mens rea.

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Facts

The Appellant, Sanofi India Ltd., a pharmaceutical company, supplied medicines to Bhabha Atomic Research Centre (BARC) for its Rare Materials Project between 2011 and 2016.

The Appellant was named as Accused No. 4 in FIR No. RC.17(A)/ 2015. The CBI alleged that Dr. P. Anand conspired with various pharmaceutical companies, including the Appellant, to purchase medicines at inflated rates and in excess of requirement. In 2017, after investigation, the chargesheet was filed against Dr. P. Anand (Accused no.1) and the Appellant (Accused no. 2) under Section 120B r/w Section 420 of the Indian Penal Code (IPC) and Sections 11, 12, 13(2) r/w 13(1)(b) of the Prevention of Corruption Act, 1988. The CBI did not arraign any officer or employee of Sanofi. Further, Dr. P. Anand allegedly received an illegal gratification of ₹ 42,750 from the Appellant without consideration.

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The Special CBI Court, Bengaluru, took cognizance of the offences against the Appellant. Aggrieved by this, the Appellant filed a petition before the High Court of Karnataka, seeking to quash the proceedings. The High Court dismissed the petition on 15 February 2019, relying on Iridium India Telecom Ltd. v. Motorola Inc. The Appellant then appealed to the Supreme Court.

Issue

A. Can a company be prosecuted for criminal offences without its directors or persons-in-charge being arraigned?

B. Can criminal proceedings against Sanofi India Ltd. Continue, or should they be quashed because no natural person through whom it acted was named?

Held

The High Court of Karnataka relied on Iridium India Telecom Ltd. v. Motorola Inc. and recognised that a company can be held criminally liable for offences requiring mens rea. It also held that a complainant is entitled to an opportunity to prove the allegations made in the complaint. It held that a criminal prosecution against a corporate entity is maintainable even without its directors and persons-in-charge of its affairs being arraigned.

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The Supreme Court dismissed the appeal and upheld the High Court’s refusal to quash, and introduced a three-stage legal framework to determine whether the criminal acts and guilty intention (mens rea) of an individual can be attributed to a company. The framework considers the individual’s authority under the company’s constitutional documents, delegated powers, and the circumstances justifying special attribution.

The Court followed Standard Chartered Bank v. Directorate of Enforcement and Iridium India Telecom Ltd. V. Motorola Inc., which recognise that a company can possess mens rea and be prosecuted. It distinguished Aneeta Hada v. Godfather Travels and Tours, which concerns vicarious liability under Section 141 of the Negotiable Instruments Act. Sanofi relied on Tesco Supermarkets Ltd. V. Nattrass, and the Court’s approach drew on the rules of attribution in Meridian Global Funds Management Asia Ltd. V. Securities Commission.

Obiter Dicta

The Supreme Court explained the three-stage legal framework, noting that a company is not automatically held liable for an individual’s criminal acts merely because the individual holds an important position. The Court said that courts cannot make it easier to prosecute companies. If changes are needed, Parliament must make appropriate laws

Conclusion

The Supreme Court clearly defined the principles governing the criminal liability of companies for offences requiring mens rea. It emphasised that a company cannot be held criminally responsible merely because an individual in that company committed an offence. The three-stage framework provides a structured approach to determining when an individual’s acts and intentions can be attributed to a company. The Court dismissed the appeal and held that failure to identify the individual is not a ground to quash, leaving the prosecution to proceed to trial. This judgment is significant because it brings clarity to the law relating to corporate criminal liability while recognising the role of the legislature in introducing any necessary changes.

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