INDIA Law and Practice Contributed by: Vijayendra Pratap Singh, Asif Ahmed, Bhanu Jindal and Khushi Mittal, AZB & Partners
1.6 Sentencing and Penalties There is no formal sentencing policy in India. Courts have wide discretion in the sentencing of accused persons, subject to prescription of a minimum pun - ishment. The BNS provides for punishment in the form of imprisonment, imposition of fines, forfeiture of prop - erty, and other methods. However, community service has now been introduced as a punishment for first- time offenders for offences under Sections 202, 209, 226, 303, 355, and 356 of the BNS. Under the BNS, the Parliament has mandated mini - mum punishments for certain offences such as theft and dishonest misappropriation of property. The BNS has increased punishments for offences such as criminal breach of trust (from three to five years), and cheating with knowledge that wrongful loss may be caused (from three to five years). Courts may impose a fine as an alternative to impris - onment or along with imprisonment. For certain offences, statutes stipulate the maximum quantum of fines that may be imposed by the court. When a sum is not expressed under the statute, the quantum of the fine is unlimited, though the guiding principle is that fines shall not be excessive. There is no concept of a deferred prosecution agree - ment or non-prosecution agreement in India. How - ever, plea bargaining is available in India for certain offences, as detailed in 4.3 Plea Agreements, Co- Operation, Self-Disclosure and Leniency . As per the guidelines of the Supreme Court of India, while awarding sentences, courts must consider the principles of proportionality and deterrence. Factors such as corporate culture and remediation efforts do not typically form part of the factors required to be considered for sentencing. Mitigation factors such as co-operation with inves - tigators, voluntary disclosure, early remediation and restitution to affected parties, and a clean prior record may be relevant for appropriate sentencing.
To impose criminal liability on corporate entities, the doctrine of attribution is applied. This means that the mens rea, or guilty intent, of the directors or persons responsible for the company’s affairs may be attrib - uted to the corporate entity itself. Conversely, in the absence of a specific provision in a statute recognising vicarious liability, the doctrine of attribution cannot be applied to impose criminal liability on directors/persons in charge of the affairs of a company. Similarly, a company cannot be held liable for the criminal acts of its employees unless there is a specific provision for it, or the company abetted the act. Investigation agencies entrusted with the investigation of white-collar crimes, such as the Central Bureau of Investigation (CBI), ED, and Serious Fraud Investiga - tion Office (SFIO), are increasingly identifying accused persons in corporate crimes based on statutory filings, resulting in identification of promoters, directors, and other senior officials of a company. Despite statutory guidance limiting prosecution to those responsible for an entity’s affairs, criminal cases are often initiated against individuals with no role in the offence. Courts have struck down such overbroad investigations and attempts to implicate unconnected persons or inde - pendent third parties. Parent companies cannot be held liable for the crimi - nal acts of their subsidiaries unless it is shown through evidence that the parent entity actively directed or controlled the subsidiary’s operations and further took part in the unlawful conduct. Indian criminal law does not currently recognise a framework of corporate liability for “failure to prevent”- style offences as found in jurisdictions like the UK. Certain special statutes impose preventive obligations on corporations and their officials. However, failure to comply with such obligations is not an offence under Indian law. While some of these impose oversight and preventive responsibilities, they do not recognise a standalone corporate offence for failing to prevent an employee’s wrongdoing in the broad “failure to pre - vent” sense.
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