1. The document discusses the criminal liability of companies/corporations under Indian law. 2. It notes that a company can be criminally liable for acts committed by employees based on factors like the seriousness of the crime and compliance measures in place. 3. Punishments for companies found criminally liable include fines, restitution, and probation under court supervision.

1. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
CRIMINAL LIABILITY OF A
COMPANY / CORPORATIONS
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
Lakshminarayanan Alaguraja
Advocate
Altacit Global
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

2. Corporate Liability
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
In criminal law, corporate liability
determines the extent to which a
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
corporation as a legal person can be liable
for the acts and omissions of the natural
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
persons it employs. It is sometimes regarded
Tel: +91 - 80 - 6546 2400
COIMBATORE
as an aspect of criminal vicarious liability, as
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
distinct from the situation in which the
Tel: +91 - 422 – 6552921
wording of a statutory offence specifically
attaches liability to the company /
corporation.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

3. Formation of a Company
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
• Company = organization of persons and
BANGALORE
Suite 920, Level 9,
funds for common purpose.
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
• Only an Incorporation makes it a legal
Tel: +91 - 80 - 6546 2400
COIMBATORE
entity – registration under Companies
BB1, Park Avenue,
# 48, Race Course Road, Act, 1956 – conclusive proof of valid
formation.
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
• Memorandum and Articles of Association
– also shareholder’s agreement.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

4. Promoter of a Company
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
• Promoter = one who promotes the
Tel: +91 - 44 - 2498 4821
BANGALORE
formation of the company –
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
entrepreneur.
• Personally liable for contracts before
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
completion of the incorporation
Tel: +91 - 422 – 6552921
process.
• Fiduciary relationship – and
legitimate expenses are payable –
EMAIL
“sweat equity”, etc.
info@altacit.com
WEBSITE
www.altacit.com

5. Objects Clause
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
• MoA – Main, Ancillary and Other
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
Objects.
BANGALORE
Suite 920, Level 9,
Raheja Towers,
• Investor protection and as caution
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
to outsiders – Doctrine of Ultra
COIMBATORE
BB1, Park Avenue,
Vires – exceeding the legal power.
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921 • Ultra vires actions are not binding
on the Company.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

6. Articles of Association
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore, • For internal management – rules for day-
to-day activities.
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9, • Rule of Constructive notice = presumed
knowledge of the AoA by anybody dealing
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
with the Company.
BB1, Park Avenue,
# 48, Race Course Road, • Rule of “indoor management” – an
exception – of procedural compliance – to
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
protect external interests with reasonable
efforts.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

7. Criminal Liability …
CHENNAI
3rd Floor, ‘Creative Enclave’,
1. Nature and seriousness of crime.
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004. 2. Complicity and pervasiveness within the
Company
Tel: +91 - 44 - 2498 4821
BANGALORE
3. History of similar conduct.
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
4. Corporation’s timely, voluntary disclosure
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
and cooperative efforts.
5. Presence of a compliance and ethics code.
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
6. Prosecution = combined efforts of the
Corporation and the Investigating
Authorities Concern of “confidential
EMAIL
information”.
info@altacit.com
WEBSITE
www.altacit.com

8. Criminal Liability …
CHENNAI
3rd Floor, ‘Creative Enclave’,
1. Rationale for Criminal liability = enormous
influence on economy.
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE 2. Strict degree of Vicarious criminal liability
attribution of “collective mens rea” of
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400 Executives.
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
3. Gross negligence or breach of duty.
4. Test of “Organizational approach”.
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
5. Applies to Partnerships/Trusts/Unions
too.
6. Statutory compliances also covered for
EMAIL
info@altacit.com
liability.
WEBSITE
www.altacit.com

9. Criminal Liability …
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
• Fundamental Rights of a Company
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821 – Fair trial = Procedural safeguards
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
– Issue of Political funding
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
• Punishments for Company:
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018. – Restitution; Fines; Probation under
Tel: +91 - 422 – 6552921
Court supervision; Forfeiture clauses;
and Public apologies
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

10. Culpability of Company
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
• Crime committed by an employee
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
despite strong Corporate policy
BANGALORE
Suite 920, Level 9,
against it?
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
• Crimes committed by contractors/
COIMBATORE
BB1, Park Avenue,
consultants?
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921 • Crimes committed in ignorance or
wrong understanding of law?
• Serious frauds committed by senior
management?
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

11. Offences under Companies Act
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Section Offences
Tel: +91 - 44 - 2498 4821 (Companies Act 1965)
BANGALORE
Suite 920, Level 9, Section 169 Failure to table accounts.
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
Section 364(2) Making false and misleading statement.
COIMBATORE
BB1, Park Avenue,
Section 131 Disclosure of interest in contracts, property,
# 48, Race Course Road, officers etc
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
Section 132 Breach of duty and liability of officers.
Section 132E Substantial property transactions involving
directors.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

12. Offences under Companies Act
CHENNAI
3rd Floor, ‘Creative Enclave’,
Section Offences
148-150, Luz Church Road,
Mylapore,
(Companies Act 1965)
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
Section 167 Failure to keep accounts for 7 years.
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road, Section 125 Undischarged bankrupt acting as
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400 director.
COIMBATORE
BB1, Park Avenue, Section 133A Prohibition of loan to persons
# 48, Race Course Road,
Coimbatore - 641018.
connected with directors
Tel: +91 - 422 – 6552921
Section 135 General duty to make disclosure
Section 174 Powers and duty of auditors as to
reports on accounts
Section 367 Use of a company name in business
EMAIL
prior to incorporation.
info@altacit.com
WEBSITE
www.altacit.com

13. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
CASE STUDY
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

14. Iridium India Telecom Ltd. vs.
Motorola Inc. 2011(1) SCC 74
CHENNAI
3rd Floor, ‘Creative Enclave’,
The Hon’ble Supreme Court allowed the prosecution against
148-150, Luz Church Road,
Mylapore, the Motorola setting aside the defence plea that it could not
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821 have the necessary mens rea. A Company/Corporation is
BANGALORE virtually in the same position as any individual and may be
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
convicted of offences including those requiring mens rea. It
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
cannot escape liability for a criminal offence merely because
COIMBATORE
the punishment prescribed is that of imprisonment. The
BB1, Park Avenue,
# 48, Race Course Road, criminal intent of the alter ego of the company i.e. the persons
Coimbatore - 641018.
Tel: +91 - 422 – 6552921 or group of persons that guide the business of the Company,
would be imputed to the corporation, depending upon degree
of control exercised by persons in charge of affairs of company.
Held if degree of control is so intense that a corporation may
be said to think and act through a person or body of persons,
mens rea of person or persons in control is attributable to the
EMAIL
info@altacit.com corporation.
WEBSITE
www.altacit.com

15. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
Thank You
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
info@altacit.com
WEBSITE
www.altacit.com