Filling the empty vessel: How the Supreme Court now attributes mens rea to companies

Corporate criminal liability has always sat awkwardly with the basic idea of a guilty mind. A company, in the old line, has "no soul to damn and no body to kick." It can't form intent the way a person does. Still, companies hold enormous economic power and can-do real harm, so legal systems have had to find ways to make them answer for crimes.

In India, the Supreme Court settled in Iridium India Telecom Ltd. v. Motorola Inc., (2011) 1 SCC 74, that a company can have mens rea. What it never explained was how: through whom, and on what basis. As the Court put it in Sanofi, that question remained "an empty vessel, yet to be filled." On September 7, 2026, the Court finally filled it with a three-stage framework, built after a careful look at English law from Lennard's Carrying through to the reforms that followed Barclays. This is the first time the Supreme Court has set out a complete doctrinal basis for attributing mens rea to a company. It will change how corporate prosecutions are brought, defended and decided.

Sanofi India supplied certain Rare Materials Project to BARC from 2011 to 2016. In 2017 the CBI filed a chargesheet against Dr. P. Anand, a Scientific Officer at BARC, and against Sanofi. The charges were under Section 120B read with Section 420 IPC and several provisions of the Prevention of Corruption Act, 1988.

It was the case of the prosecution that, Dr. Anand conspired with Sanofi to buy medicines at inflated rates by labelling items as proprietary, leaving out competing bidders, or refusing to order from the lowest bidder, and BARC allegedly lost INR 3,53,361 as a result. He allegedly took INR 42,750 in illegal gratification, and Sanofi was said to have abetted it.  In this regard, no employees of Sanofi were named as an accused. Sanofi approached the Karnataka High Court under Section 482 CrPC seeking the quashing of the proceedings. Its argument was that a company can't be prosecuted for a mens rea offence unless the person who was its "directing mind and will" is identified and charged alongside it. Relying on Iridium India, the High Court refused.

The Supreme Court concluded that it would not be able to quash the ruling of the lower courts until it first decided how Indian law assigns men's rea to the corporation. The Court divided the issue into two halves: the question of whether a corporation could ever have mens rea was a clear one; the question of how it gets assigned was one on which there was little to no information in Indian law. So, the Court turned to English law again.

English law on vicarious liability was applicable only to strict and absolute liability torts. The legal system could assign actions taken but not the state of mind. The case of Lennard's Carrying (1915) highlighted that the directing mind belongs to the "ego" of the company. What the person does is done by the company, making it a case of direct rather than vicarious liability. Tesco v. Nattrass (1972) further developed this theory and turned it into the identification doctrine, which was later considered too restrictive and too easily misinterpreted as an all-encompassing test and as a closed list of persons held liable.

In Meridian Global's case (1995), Lord Hoffmann endorsed a markedly divergent approach. He classified three attribution rules. The first was of primary nature (derived from constitutional law and company law), the second was generic (consisting of agency law rules), while the third was special (crafted by the court whenever normal attribution law would counteract the statute's intent). For Hoffmann, statutory interpretation was paramount in this case. The rulings in the case of Barclays stated that "directing mind and will" was not a test itself, but implied that Meridian should be applied quite systematically. The authority was judged based on the specific transaction and status was not sufficient enough.

In relation to mandatory imprisonment, the verdict in Standard Chartered Bank (2005) stated that corporations cannot be given total immunity from penalties, though it also noted that the issue of mens rea is still vague. Various High Courts have held inconsistent opinions, while in the case of Kalpnath Rai, the Supreme Court held that the juristic entity does not have mens rea unless a presumption is created by law. Iridium India case has answered only the first question and has made the related clarification that the quoted paragraph 63 from its ruling only elaborates on the English law and is not an Indian principle of attribution. The Court also rejected the principle of respondeat superior from the US because it resembles, to a great extent, the vicarious responsibility principle.

The Supreme Court dismissed the application of the multiple legal definitions and raised a single question. When a person X performs an act on behalf of a corporation, when can person X's act and intention be considered to belong to the corporation? The stages must be followed in order, with the court going to the next stage only if the previous stage does not answer the given question.

Stage 1. Constitutional documents. Does the memorandum and articles or a law implied by the company law provide X with an authority to perform the act? If they do, person's X intention may be viewed as being the corporation's.

Stage 2. Delegation. Has the authority conferred on X, either expressly or tacitly? Was the delegation authorized? The delegation should involve real authority and discretion. As it appears, if the board is making all the important decisions and just allows person X to sign certain documents, person X cannot be said to have conferred power to carry out a task.

Stage 3, which accommodates a special rule. When neither stage applies, the court inquires as to whether the statutory purpose requires special attribution. Where the statutory purpose is narrow, the inquiry is as to the state of mind that is relevant. Alternatively, when the purpose is broad, the question concerns whether this purpose, as applied to the facts of the case, results in the necessity of a special rule. The Court emphasized that this is simply an application of conventional statutory interpretation, rather than an unusual prerogative.

Barring a few exceptions, just because a particular stage is applicable does not imply following attribution. The investigation is about the particular transaction in question rather than about the overall company’s leadership. The framework is not needed when the statute specifies who the attributable individuals are, sets up vicarious liabilities, or lays the foundations for strict or absolute liability wrongful acts. Attribution works one way only, from the person to the corporation. Stages 1 and 2 bring about certainty while stage 3 allows for flexibility. There is no standalone rule based upon status, though status is significant for stage 3 purposes.

It was held by the Court that mens rea must be present in at least one natural person and cannot simply combine all the mens rea of different people together. But these need not be imported into the chargesheet. Mens rea can be determined via surrounding circumstances or act. The identification of individuals does not go to the issues of what offense is made out. Forcing identification from the start would hinder prosecutions. The same reasoning applies to arraignment as in the case of Aneeta Hada and Hindustan Unilever, which involved statutes that create derivative and vicarious liability. The decision on this case is limited to Section 482 only and the Court did not take a decision on whether identification at later stages is necessary.

Section 482 still puts some constraints and the quashing on the sole ground of non-identification of individuals of a corporate entity cannot survive. At a prima facie stage, it requires three conditions to be satisfied. Firstly, it must be shown that someone acted for the company; secondly, that their act is connected to the crime; thirdly, the special circumstances must not make mens rea absurd or improbable. On the facts, the chargesheet passes this test and could not be quashed.

Sanofi stands as an epitome of its kind. It finds a balance between certainty and flexibility and emphasises the idea that a corporate prosecution cannot be called a failure simply because individuals in the case have not been indicated. It demands a lot more from anyone affected by the case, the lawyers need to be more attentive to governance patterns, prosecutors need to be able to carry out a more complicated investigation, and policy makers must realize that corporate liability should be viewed "more seriously than it is now."

About the authors: Tarun Sharma is a Principal Associate and Rohit Kumar is an Associate at Bahuguna Law Associates.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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