The Supreme Court ruled that Corporate Criminal Liability can arise even when investigators have not identified or charged an individual officer. The Court held that authorities cannot quash criminal proceedings against a company at the initial stage under Section 482 of the Code of Criminal Procedure, 1973 (CrPC), simply because no employee or director faces charges.
A Bench comprising Justice J.B. Pardiwala and Justice Manoj Misra delivered the judgment on September 7, 2026. The case was Sanofi India Ltd. v. Central Bureau of Investigation [2026 LiveLaw (SC) 904 / 2026 INSC 957].
Justice Pardiwala wrote the judgment for the Bench. He noted that a company acts through human agents. However, the prosecution does not always need to identify a specific individual before the trial begins.
The Court held that allegations can support prosecution when they show the company’s direct involvement in the alleged offence.
Procurement Irregularities at BARC
The case arose from a CBI investigation into alleged irregularities in pharmaceutical procurement at the Bhabha Atomic Research Centre (BARC).
The CBI registered FIR No. RC.17(A)/2015. It later filed a chargesheet in 2017.
The chargesheet named Dr. P. Anand, Scientific Officer (Medical) at BARC, as Accused No. 1. It also named Sanofi India Ltd. as Accused No. 4.
According to the CBI, Dr. Anand conspired with the company to procure medicines at inflated prices. The agency also alleged that the purchases involved excessive quantities.
The CBI further alleged that the accused bypassed lower bids. It claimed that officials misclassified certain items as proprietary products to benefit Sanofi India Ltd.
The agency estimated a loss of ₹3,53,361 to the public exchequer. It also alleged that the company gained an equivalent wrongful benefit.
The CBI further alleged that Dr. Anand received illegal gratification of ₹42,750 from the company.
The charges included criminal conspiracy and cheating under the Indian Penal Code. The prosecution also invoked provisions of the Prevention of Corruption Act.
Sanofi Challenges Karnataka High Court Order
Sanofi India Ltd. approached the Karnataka High Court under Section 482 CrPC. The company argued that the CBI had not identified or charged any director, manager, or employee.
The company relied on the corporate “alter ego” or identification principle. It argued that a company has no physical body or independent mind.
Senior Advocate Siddharth Luthra represented Sanofi India Ltd. He referred to the House of Lords decision in Tesco Supermarkets Ltd. v. Nattrass.
Luthra argued that the prosecution must identify a natural person who represents the company’s “directing mind and will.” Without such identification, he argued, the company could not face prosecution for an offence requiring mens rea.
The Karnataka High Court rejected the argument. It refused to quash the chargesheet.
Sanofi India Ltd. then appealed to the Supreme Court.
Supreme Court Sets Evidentiary Threshold
The Supreme Court upheld the Karnataka High Court’s decision. It said the prosecution does not need to establish the final identity or precise role of a natural person before trial.
The Court noted that investigators may uncover those details during the investigation or trial.
However, allegations against the company must meet certain requirements. The Court identified three key conditions.
- Agency Relationship: The material must indicate that one or more people acted for the company.
- Connection With Offence: Their actions must relate directly to the offence alleged against the company.
- Plausible Mens Rea: The surrounding facts must make attribution of criminal intent to the company plausible.
The Court stressed that these requirements must exist at the preliminary stage. Courts should not conduct a detailed trial while deciding a Section 482 petition.
Three-Stage Corporate Attribution Framework
The Supreme Court also established a three-stage framework for Corporate Criminal Liability under Indian law.
Stage 1: Corporate Structure
Courts must first examine the company’s constitutional documents. These include the Memorandum and Articles of Association.
The court should determine whether the relevant individual had authority over the disputed transaction.
Stage 2: Delegated Authority
If the corporate documents do not establish attribution, courts must examine delegated authority.
The individual must have sufficient managerial discretion and independence to make the relevant decision.
The Court clarified that ordinary employment or participation in negotiations does not automatically satisfy this requirement.
Stage 3: Statutory Interpretation
If the first two stages do not establish attribution, courts may examine the relevant criminal statute.
They must determine whether the statute requires a special rule for attributing conduct or intent to the company.
The Court described this stage as a matter of statutory interpretation.
Supreme Court Dismisses Sanofi Appeal
The Supreme Court found sufficient prima facie material connecting human agents with Sanofi India Ltd. in the BARC procurement transactions.
It therefore found no error in the Karnataka High Court’s refusal to quash the chargesheet.
The Bench dismissed Sanofi India Ltd.’s appeal. It also warned that courts should not turn Section 482 proceedings into mini-trials.
The Supreme Court directed its Registry to circulate the judgment to all High Courts. The direction aims to promote consistent application of the corporate attribution framework across India.
