Can a Company Face Corruption Charges Without Its Directors? Supreme Court Maps the ‘Directing Mind’ Rule

Sanofi India Ltd. v. Central Bureau of Investigation, 2026 INSC 957 (7 September 2026)

What the case was about

Sanofi India Ltd., a public limited pharmaceutical company, was arraigned as Accused No. 2 in a CBI chargesheet alleging offences of criminal conspiracy and cheating against the Bhabha Atomic Research Centre (BARC) (para 2). Remarkably, no employee, director or official of the company was named alongside it (para 4). Sanofi moved the Karnataka High Court to quash the proceedings, arguing that because a corporation is an artificial person without a mind of its own, it cannot be prosecuted for offences requiring mens rea unless the natural persons who constitute its “directing mind and will” are identified and charged as well (para 6). The High Court dismissed the petition, holding that a prosecution against a corporate entity is maintainable even without its directors or persons-in-charge being arraigned (para 8). Sanofi then appealed to the Supreme Court.

The key facts

The charges arose out of tenders floated by the Rare Materials Project at BARC during 2011-12, 2013-14 and 2015-16 (para 3). The CBI alleged that Dr. P. Anand, a Scientific Officer (Medical) at BARC, entered into a criminal conspiracy with Sanofi to procure medicines at inflated rates and in excess quantities, causing a wrongful loss to BARC (para 4). The offences alleged included criminal conspiracy and cheating under the Indian Penal Code, as well as corruption offences under the Prevention of Corruption Act, 1988 (para 4). The chargesheet named Dr. Anand as Accused No. 1 and Sanofi as Accused No. 2, but no individual representing Sanofi was included (para 4).

The questions before the Court

The Supreme Court framed a single issue: whether the High Court ought to have quashed the criminal proceedings against the company on the sole ground that no natural person had been identified and arraigned alongside it (para 14). The Court observed that answering this first required an understanding of how a corporation can possess mens rea under Indian law (para 25).

What the Court decided and why

The judgment begins with the foundational puzzle of corporate criminal liability: a company is an abstraction with “no soul to damn and no body to kick,” and can only act through human instrumentalities (para 16). Because criminal liability requires both an act (actus reus) and a guilty mind (mens rea), the law must “attribute” the conduct and mental state of a natural person to the corporation (paras 21–22). This attribution is not a form of vicarious liability; it is the legal reasoning by which the acts and mind of an individual become, in law, the acts and mind of the company itself (para 35).

Tracing the doctrine to Lennard’s Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd., the Court explained that since a company has no mind of its own, its “active and directing will must be sought in the person of somebody who is the very ego and centre of the personality of the corporation” (para 35). Such a person is not a mere servant or agent for whom the company is liable on the footing of respondeat superior; rather, the company is directly liable because his action is, in law, the very action of the company (para 35).

The Court then turned to Tesco Supermarkets Ltd. v. Nattrass and adopted Lord Reid’s formulation that whether an individual is to be regarded as the company, or merely as its servant or agent, is a question of law (para 41). Ordinarily, the board of directors, the managing director and perhaps other superior officers who carry out the functions of management can be treated as acting as the company itself. A person may also be said to act as the company where the board delegates its powers to him and vests in him full discretion to act independently. However, the mere exercise of managerial discretion under the supervision of superior officers does not make a person the “directing mind and will” of the company (para 41).

The Court noted that while Indian law has long accepted that corporations can possess mens rea, there had been little principled discussion on the precise mechanics of attribution (para 24). Treating English law as a useful starting point because of structural similarities, the judgment constructed a framework for Indian jurisprudence. Equipped with this framework, the Court addressed the specific question before it: whether the absence of an identified and arraigned natural person is, by itself, sufficient to quash a prosecution (paras 25–26).

In its concluding analysis, the Court held that the mere fact no natural person had been identified or formally arraigned alongside the company was not, standing alone, a ground to quash the proceedings. What matters is whether the allegations in the chargesheet prima facie disclose an offence attributable to the corporation through its directing mind. Formal arraignment of the individual is not an inflexible prerequisite; the attribution framework permits the trial court to examine whether the company’s criminal liability is made out on the facts. Applying this to the present case, and having regard to the specific allegations of inflated pricing and illegal gratification that the CBI sought to prove through documentary and oral evidence, the Court declined to interfere with the trial. It answered the framed question in the negative and dismissed Sanofi’s appeal.

Why it matters

This ruling is a landmark clarification for corporate criminal law in India. By rooting corporate mens rea in the “directing mind and will” doctrine, the Supreme Court has made clear that a company is prosecuted on the basis of direct, not vicarious, liability. The decision pushes corporate boards and senior management to recognise that delegation structures and internal governance are not merely operational matters; they define the very boundary of the company’s criminal personality.

At the same time, the judgment serves as a warning to companies that they cannot demand automatic immunity simply because no officer was named in the initial chargesheet. If the prosecution’s allegations prima facie disclose a corporate offence, the trial may proceed even where the “directing mind” is not individually arraigned at the outset. The framework adopted by the Court—blending English common-law principle with Indian statutory context—supplies a durable analytical foundation for future cases involving corporate conspiracy, fraud and corruption charges.