A corporate body can be indicted for offenses involving mens rea, provided that they are not offenses that can only be committed by a human individual or offenses that mandatorily entail punishments of imprisonment. The mens rea of the authorized agents or servants of a company can be attributed to the company, provided that they have acted or purported to act under the authority of the corporate body or in pursuance of its aims or objects.

Headnote:
CRIMINAL LAW - LIABILITY OF CORPORATE BODY - MENS REA - COMPANY INDICTMENT - OFFENCES INVOLVING MENS REA - ATTRIBUTION OF GUILTY INTENTION OF AGENT OR SERVANT TO COMPANY - EXCEPTIONS - PRINCIPLES GOVERNING CRIMINAL LIABILITY OF CORPORATE BODIES.
Fact of the Case:

A criminal reference was made to the High Court regarding the liability of a corporate body, Syndicate Transport Company (Private) Limited, for indictment on a criminal charge involving mens rea. The company, along with its managing director, directors, and a shareholder, was prosecuted for alleged offenses under Sections 420 and 406 or 403 of the Indian Penal Code (IPC). The trial magistrate framed charges against the company, its managing director, another director, and the shareholder under Section 420 IPC, but the company challenged this charge in revision.
Finding of the Court:

The High Court held that a corporate body, like any other person, is liable for indictment for all kinds of offenses, except for those that can only be committed by a human individual or those that mandatorily entail punishments of imprisonment. The court noted that the definition of a "person" in Section 11 of the IPC includes a company, but this definition is subject to the qualifying clause "unless there is anything repugnant in the subject or context." Therefore, a corporate body cannot be indicted for offenses like treason, murder, bigamy, perjury, rape, etc., which can only be committed by a human individual, or for offenses that must be punished with imprisonment.
Issues: 1. Whether a corporate body can be indicted for offenses involving mens rea? 2. Whether the mens rea of the authorized agents or servants of a company can be attributed to the company? 3. Whether a company can be prosecuted for offenses under Sections 406 and 403 of the IPC, which do not necessarily involve imprisonment?
Ratio Decidendi: 1. The court held that a corporate body can be indicted for offenses involving mens rea, provided that they are not offenses that can only be committed by a human individual or offenses that mandatorily entail punishments of imprisonment. 2. The court held that the mens rea of the authorized agents or servants of a company can be attributed to the company, provided that they have acted or purported to act under the authority of the corporate body or in pursuance of its aims or objects. 3. The court held that a company cannot be prosecuted for offenses under Sections 406 and 403 of the IPC, which do not necessarily involve imprisonment, unless the allegations in the complaint show that the managing director or board of directors had made the dishonest representation or had received the monies or had authorized the shareholder to make such a representation or to receive the amount.
Final Decision: The reference was accepted, and the charge framed against the company was quashed. The record was sent back to the magistrate for proceeding with the trial in accordance with law.

JUDGMENT - 1. This criminal reference raises an important question of law regarding the liability of a corporate body for indictment on a criminal charge involving the question of mens rea.

2. The opponent No. 1, Messrs. Syndicate Transport Company, (Private) Limited is a company incorporated under the Indian Companies Act (Act No. 7 of 1917), with its registered office at Nagpur. I shall refer to it as the Company hereafter The opponent No. 3, Chintaman, is the Managing Director of the Company, while the opponents Nos. 4, 5, 6, 7 and 8 are its ordinary directors. The opponent No. 9 Manohar is an ordinary shareholder of the Company. This Manohar wrote a letter to the complainant Khemka Motors (Opponent No. 2) to request for an advance of Rs. 11,000/- to the Company for the purchase or a diesel engine. The letter also stated that the diesel engine, when purchased, would be filled to the Companys bus No. BYY-610, and that bus would then be transferred in the name of the complainant and would be run by the Company on hire purchase agreement till the satisfaction of the advance of Rs. 11,000/-. Accordingly, the complainant agreed to advance Rs. 11,000/- and paid that amount in cash to the share holder Manohar. After obtaining the amount, a diesel engine was purchased but it was fitted to another bus of the Company and the bus No. BYY-610 was not transferred to the complainant. On these facts, the complainant prosecuted the Company, its Managing Director, its other directors and the shareholder Manohar for alleged offences under Section 420 and 406 or 403 of the Indian Penal Code. The trial Magistrate passed a separate order discharging the directors and framed charges under Section 420, Indian Penal Code against the Company, its Managing Director Chintaman, another director Harinarayan and the shareholder Manohar. The Company went up in revision to the Sessions Court, Nagpur with a request to quash the proceedings against it. Accepting this submission, the Extra Additional Sessions Judge, Nagpur has reported the case to this Court with a recommendation to quash the charge framed by the trial Magistrate against the Company. The learned Extra Additional Sessions Judge was of the view that a corporate body acts only through its agents or servants and the mens rea of such agents or servants cannot be attributed to the Company. He also remarked that it would not be possible to sentence a Company to imprisonment and a charge under Section 420. Indian Penal Code could not be sustained against the Company because it was mandatorily punishable with imprisonment. The learned Additional Government Pleader for the State and Messrs. Mandpe and B. L. Gupta for the Company and the director Harinarayan supported the reference. Mr. V. G. Hardas advocate for the complainant-Company opposed the reference.

3. While opposing the reference, Mr. Hardas submitted that under Section 2 of the Indian Penal Code every person shall be liable for punishment under the Code and under Section 11 ibid, a corporate body like a company is included in the definition of a "person" and, therefore, a corporate body, like any other person, ought to be indictable for any offence punishable under the Code. Messrs. Mudholkar and Mandpe contended, on the other hand, that though a corporate body was included in the definition of a "person" there were certain offences which could be committed only by an individual human being and a corporate body could not therefore, be capable of committing such offences. They further urged that certain offences had to be punished only with imprisonment and it would not be possible to impose a punishment of imprisonment on corporate bodies. According to them, a corporate body could act only through some authorized agent or servant and it would not be possible or permissible to attribute the guilty intention of the said agent or servant to the company so as to make the company liable for the offence. They, therefore, urged that the definition of

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