The Supreme Court has dismissed Sanofi India's petition seeking to quash criminal proceedings related to alleged irregularities in pharmaceutical supplies to BARC, Mysore, between 2012 and 2015. According to reports from CNBC TV18, the Supreme Court order dated September 7, 2026 concerns the maintainability of criminal prosecution against the company even when no individual employee has been arraigned. The court has not recorded any finding of guilt or adjudicated on the merits of the case, as confirmed by Sanofi India in its stock exchange filing. Justice J.B. Pardiwala and Justice Manoj Misra constituted the bench that heard the appeal against the Karnataka High Court's February 15, 2019 judgment. The court further clarified that neither identification nor arraignment of a natural person is a mandatory prerequisite for prosecuting a corporation, emphasizing that what the chargesheet must disclose is that the corporation itself committed the offence through its own conduct and dealings without naming the individual who acted on its behalf.
Justice Pardiwala, who authored the 98-page judgment, established a comprehensive framework for corporate criminal liability that rejects previous limitations on prosecuting companies. The court held that Indian law permits the prosecution of a company for offences requiring proof of criminal intent and even for offences carrying a mandatory sentence of imprisonment. As per the Supreme Court ruling, "The position under Indian law is, thus, clear that a corporation can be prosecuted for an offence notwithstanding that it carries a mandatory sentence of imprisonment, or requires proof of mens rea. It appears that a corporation cannot be prosecuted only where the offence is punishable with imprisonment alone, or where the offence, by its nature, requires personal malicious intent, such that it is incapable of commission by a corporation at all." The bench emphasized that the absence of an identified individual at the stage of considering a petition for quashing criminal proceedings was not, by itself, fatal to the prosecution. The court clarified that a corporation can possess mens rea only through attribution from one or more natural persons, with whether such attribution can conclusively be made being a factual question that ordinarily has to be determined during the trial. The court warned that insisting on identification at the threshold could stifle legitimate prosecutions, noting that "A complainant filing an FIR against a corporation often only knows that someone within the corporation committed the act in question, without any means of knowing who."
The Supreme Court has established a three-stage hierarchical and sequential framework for deciding when an individual's acts and mens rea can be attributed to a company. At the first stage, courts must examine whether the company's constitutional documents or a rule implied by company law vest the person concerned with the power to carry out the act in question. The court noted that earlier Supreme Court rulings had established that corporations can possess mens rea, but had not answered how, or through whom, such guilty intent should be attributed. The second stage involves determining whether the act was performed in the course of the person's duties, and the third stage involves examining whether the person acted within the scope of their authority. The court emphasized that attribution of an individual's guilty mind to the company is ultimately a matter to be examined at trial, with the strength of the case going to the identification and averment of specific acts by natural persons rather than their mere identification at the threshold.
The criminal complaint filed by the Central Bureau of Investigation (CBI) relates to pharmaceutical supplies made to Bhabha Atomic Research Centre (BARC), Mysore between 2012 and 2015. As reported by CNBC TV18, the allegations involve allegations of alleged conspiracy with BARC personnel to wrongfully influence procurement decisions. According to the chargesheet, Dr. P. Anand, a Scientific Officer at BARC, was arrayed as accused no. 1 alongside Sanofi India as accused no. 2. The charges allege that Dr. Anand misclassified items as proprietary, omitted competing bidders, or declined to place orders with the lowest bidder during procurement of medicines for BARC's Rare Materials Project between 2011 and 2016, causing a wrongful loss of about ₹3,53,361 to BARC. Dr. Anand is also accused of receiving illegal gratification of ₹42,750 from the company, with no employee or official of Sanofi named as an accused in the chargesheet. Before the High Court and Supreme Court, Sanofi's counsel argued that under the identification principle recognised by English courts in Tesco Supermarkets Ltd. v. Nattrass, a corporation can be held liable for offences requiring mens rea only through its directing mind and will, and that since no such alter ego of the company had been identified or arraigned in the chargesheet, the prosecution against the company alone could not be sustained. The CBI opposed the appeal, relying on the Supreme Court's earlier decisions in Iridium India Telecom Ltd. v. Motorola Inc. and Standard Chartered Bank v. Directorate of Enforcement to submit that a corporation can be prosecuted without identifying or arraigning any individual employee.
According to Sanofi India's stock exchange filing reported by CNBC TV18, the company received the order on September 7, 2026, and is currently assessing the judgment and formulating its next litigation strategy. The company emphasized that the judgment does not impose any penalty, conviction or operational restriction on Sanofi India at this stage. The Supreme Court has directed the Registry to forward a copy of the judgment to all High Courts for future reference. Shares of Sanofi India Ltd ended at ₹3,113.05, down by ₹7.60, or 0.24% on the BSE following the announcement. On a prima facie reading of the chargesheet, the court found that the allegations must at least prima facie reveal that some natural person acted on behalf of Sanofi, that such action is referable to the offence in question, and that the surrounding circumstances do not render the existence of mens rea patently absurd or improbable, leaving the question of actual attribution to be determined at trial. The court established a major legal precedent in Indian corporate law, confirming that companies cannot claim immunity from criminal prosecution simply because individual employees were not arraigned, by holding that corporate intent can be inferred from actions and decisions. The court distinguished its earlier rulings in Aneeta Hada v. Godfather Travels and Hindustan Unilever Ltd. v. State of M.P., which had held that a company must be arraigned for prosecution of individuals, noting that those decisions were confined to statutes creating vicarious liability with express condition precedents and did not lay down a general rule applicable to a corporation's own direct prosecution.
Despite the legal setback, Sanofi India's standalone net profit surged 20.14% YoY to ₹83.50 crore for the quarter ended June 30, 2026, while sales increased 7.73% YoY to ₹437.70 crore. According to the latest financial results, the company's insulin portfolio recorded double-digit growth of 14% for the second consecutive quarter, led by brands Lantus and Toujeo. The financial impact of the alleged ₹3.53 lakh wrongful loss is negligible relative to the company's ₹437.70 crore quarterly sales, with the company maintaining a zero-debt balance sheet and robust profitability. While the Supreme Court's ruling establishes a landmark corporate criminal liability precedent in India, the financial and operational impact on Sanofi India is minimal, with the stock's core fundamentals remaining intact. The broader pharmaceutical and corporate sectors will likely see increased compliance oversight, with companies participating in institutional procurement tenders needing to enforce strict anti-bribery and fair-pricing compliance to avoid long-term criminal trials.
