Supreme Court ruling: Company criminal liability upheld even without director indictment in cheating cases

New Delhi: The Supreme Court on Monday held that a criminal case against a company for offences requiring mens rea (guilty mind) cannot be quashed merely because the investigating agencies have not identified or arraigned a particular director, employee or any other person as an accused in the cheating case.

Rejecting Sanofi India's appeal to quash a criminal case relating to criminal conspiracy and cheating on allegations of receiving undue favours from a scientific officer from Bhabha Atomic Research Centre on supply of pharmaceutical products, a bench of Justices JB Pardiwala and Manoj Misra said that "corporate criminal liability is a notoriously vexed issue and the difficulty traces back to two fundamental notions we simultaneously hold about corporations.

First, a corporation is an artificial person with an identity distinct from that of its members. Second, a corporation is merely an abstraction, that is, an impalpable thing or, as is famously said, a corporation has 'no soul to damn and no body to kick'."