Company can face fine for offence carrying jail term: SC
The Supreme Court of India ruled that corporations can be held criminally liable and fined even for offenses that carry mandatory jail terms. The court clarified that while a company cannot be imprisoned, it is not immune to prosecution for crimes requiring intent.
Why it matters
This sets a significant legal precedent for corporate accountability in India, preventing firms from using their legal status to evade criminal responsibility.
NEW DELHI: A company having no physical body cannot be imprisoned and having no mind cannot possess mens rea (guilty mind), which is essential for conviction in a criminal case. So can a firm be convicted and punished?SC Monday answered the tricky questions by holding that a company can be convicted even when it cannot have a guilty mind of its own and can also be punished, though the punishment of a jail term can be substituted by a fine.A bench of Justices J B Pardiwala and Manoj Misra said there is a need to bring a law for corporate criminal liability but said the issue comes within the legislature's prerogative and it cannot be done by a court. It held that a company is not rendered immune to prosecution merely because the offence carries a mandatory sentence of imprisonment.
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