Corporate entities have long been regarded as incapable of being prosecuted for offences which constitute of mens rea, the mental component of criminality. The Supreme Court has dislodged this roadblock, and held that mens rea of natural persons can be attributed to corporate entities, making them liable for commission of such crimes.

On 7 September 2026, in Sanofi India Ltd. v. Central Bureau of Investigation, the Supreme Court has made initial inroads towards creating a legal framework, for attributing mens rea of a natural person (i.e, a human) to corporate entities, rendering them guilty of criminal offences. This opens new avenues for companies to be prosecuted for criminal offences and, effectively, alters the status quo.

In conducting the above-stated exercise, two primary questions have been evaluated by the Supreme Court:

First question: whether a corporation can be said to possess mens rea, and accordingly be held criminally liable for offences which require proof of mens rea?

Second question: when the first question is answered in the affirmative, on what basis can a corporation be said to possess such mens rea?

The first question has been readily answered basis a review of available jurisprudence in India.

The Court dwelled upon two decisions, of the Bombay High Court in State of Maharashtra v. Syndicate Transport Co. (P) Ltd., and of the Madras High Court in A.D. Jayaveerapandia Nadar & Co. v. Income-Tax Officer.

The Bombay High Court in its decision formulated the principle that a corporate entity is capable of conceiving mens rea. It held that the criminal act or omission of an agent including his state of mind, intention, knowledge or belief ought to be treated as the act or omission of including the state of mind, intention, knowledge or belief of the company.

The Madras High Court reflected that the acts of the organs of the corporation were attributed to the corporation and treated for legal purposes as though they were acts of the corporation itself. Based on this position of law, it went to hold that when the ingredients of a criminal offence include mens rea, then no person shall be punished for such offence, unless that person has a guilty mind. This principle will apply to the corporations also.

The above line of decisions culminated in Supreme Court's decision in Iridum India Telecom Ltd. v. Motorola Inc. where the Court laid down that corporate entities can be prosecuted for offences constituting men rea and held “In such circumstances, it would be necessary to ascertain that the degree and control of the person or body of persons is so intense that a corporation may be said to think and act through the person or the body of persons. … Mens rea is attributed to corporations on the principle of “alter ego” of the company.”

However, the available jurisprudence in India, does not answer the second question.

MENS REA OF A CORPORATE ENTITY

The Supreme Court's answer to the second question is complex and involves a review of principles of common law as applied by the courts of law in England.

Pertinently, the House of Lords' decision in Tesco Supermarkets Ltd. v. Natrass (1972) and Privy Council's decision in Meridian Global Funds Management Asia Ltd. v. Securities Commission (1995) have been considered by the Supreme Court.

Tesco Supermarkets lays down that there exist certain individuals working for any corporation, such that when they act, their actions and state of mind are, in law, tantamount to actions and state of mind of the corporation itself. For identifying such persons, two-fold method of examination, later came to be known as the Identification doctrine was fashioned, whereby two sets of natural persons can be examined to identify the mens rea of a corporate entity: (i) persons who have been delegated with authority for certain acts, with full discretions, unfettered by the control of any superior (known as the delegation method), and (ii) persons whose status (i.e. senior management vested with control of the organization ordinarily) alone dictates that their mind is the mind of the company (known as the status method).

The Meridian Global decision cautioned against the approach developed in Tesco Supermarkets, on the footing that the Identification doctrine led to cases where the person identified as the company's directing mind and will had little or no connection to the [incriminating] act in question. An attempt to locate the directing mind and will of a company can become an abstract exercise and may not have relevance to the question of whether a company possessed the mens rea to commit the incriminating act. It pointed to a more relevant inquiry: whether the act done by [a] person, would count as the act of the company?. The decision gave three rules to assist in this examination:

1. Primary rules of attribution: Based on a corporation's constitutional documents, to locate the persons primarily responsible for the company's conduct.

2. General rules of attribution: Building upon the constitutional documents, and applying the general principles of agency, it can be endeavoured to identify individuals whose acts have the effect of binding the company, and count as the acts of the company.

3. Special rules of attribution: When the primary and general rules would not suffice, courts may fashion case-specific rules for attribution, keeping in mind the purpose of relevant statutes, under which the incriminating act is made punishable. Court may ask how was [the statute] intended to apply? Whose act (knowledge, or state of mind) was for this purpose intended to count as the act etc. of the company?

The decisions in Tesco Supermarkets, and Meridian Global, came up for interpretation collectively in The Queen v. Barclays PLC & Barclays Bank PLC and The Serious Fraud Office v. Barclays PLC & Anr. (“Barclays cases”). The Barclays cases principally agreed with both Tesco Supermarket, and Meridian Global, though settled on a narrower approach:

1. Status of a natural person within a corporate entity alone could no longer allow for attribution, i.e., even the acts of senior officials required actual proof of authority with respect to the incriminating act;

2. The relevant inquiry to fashion a special rule of attribution ought to be whether the statutory purpose of the [indicting] provision demanded such a rule in the facts and circumstances of the case, as opposed to whether the statutory purpose [of the indicting statute] demanded it in the abstract.

STRUCTURED APPROACH TO CORPORATE CRIMINAL LIABILITY IN INDIA

Upon the conspectus of the above aspects, the Supreme Court held that corporate entities are not immune from prosecution for offences which carry mandatory sentence of imprisonment, so long as the provision also prescribes a fine.

Most pertinently, Corporate entities can be prosecuted for offences which comprise of mens rea as an essential ingredient. Approving the approach in Barclays cases, the Court propounded a three-stage approach to be applied under Indian law:

1. The first stage asks whether the corporation's constitutional documents, or a rule implied by company law, vest the person concerned with the power to do the act in question.

2. The second stage asks whether that power was delegated to the person concerned, whether expressly or impliedly, with sufficient discretion and independence in the doing of the act.

3. The third stage, in turn, asks one of two questions, depending on the nature of the statutory purpose involved. Where the statutory purpose is narrow, it asks whether that purpose, considered in the abstract, requires the fashioning of a special rule of attribution. Where the statutory purpose is broad, it asks instead whether the statutory purpose, having regard to the facts and circumstances of the case, requires the fashioning of such a rule. In either case, where the answer is in the affirmative, the court must further ask whether the person concerned falls within the net of the special rule so fashioned.

The Court also laid down cautionary guard-rails for implementation: First, mere possibility of attribution of mens rea does not preclude a corporate entity's defence that attribution ought not to follow in a given case and its circumstances. Second, that inquiries to be made in accordance with the above framework are to be fact-specific, and not to generally locate the directing mind and will of a company. Third, the framework is to be invoked in cases involving offences which have been framed with natural persons in mind, and require proof of mens rea. Fourth, the framework only allows for attribution of mens rea from a natural person, to a corporate entity, and not vice versa.

BEYOND THE JUDGMENT

The judgment in Sanofi India Ltd. has removed two technical hurdles in prosecuting corporate entities for criminal offences: (i) that companies cannot be prosecuted when offences include mandatory imprisonment; (ii) that companies cannot be prosecuted when offences include the element of mens rea.

While the Supreme Court has opened the door to prosecuting corporate entities for offences involving mens rea, applying this framework may prove difficult in practice.

Two structural realities stand in the way. First, in corporate groups that operate through layered structures, the directing mind behind a given act may sit several tiers removed from the company actually being prosecuted.

Second, even within a single company, decision-making is often dispersed across multiple layers of management using sophisticated internal communication channels making it harder to trace a single natural person's state of mind back to the company as its own.

The Supreme Court is cognizant of the loose, and rudimentary structure of the framework propounded. Implementation of such a tool can result in imperfect outcomes.

Companies forming part of corporate groups with layered structures, including multinational enterprises operating in India through subsidiaries or joint ventures, could find themselves arraigned in criminal investigations, and prosecutions, in endeavours of locating the mens rea of a certain alleged incriminating act. Companies facing chargesheets will need to engage substantively with the merits at trial, rather than relying on procedural gaps.

This places a premium on early, thorough internal investigations, both to assess exposure and to marshal the factual record needed to contest attribution once a matter proceeds to trial.

Appropriately safeguarding against any misadministration of the above framework could prove vital, given the nascent nature of the framework. Where delegation is loosely identified or undocumented, companies may find themselves more, not less, exposed: the absence of a clear paper trail could push courts towards fashioning a special rule of attribution at the third stage, based on the surrounding facts and circumstances of the case. Ensuring delegation of authority, and limitation thereof, should be effected through clear and precise instruments including board resolutions, internal policies, or powers of attorney, since the framework turns squarely on whether a person holds genuine, independent discretion, rather than merely acting on instructions from above.

Author is an Advocate based in Mumbai. Views are personal.