INDIA Law and Practice Contributed by: Alina Arora, Samarth Gupta and Parth Singh, Shardul Amarchand Mangaldas & Co
7.9 Corporate Criminal Liability Companies are subject to criminal liability, and the relevant statutes (eg the PMLA and the Customs Act) follow a common pattern: where an offence is com - mitted by a company, the company and every person in charge of and responsible for the conduct of its business are liable, subject to a defence of lack of knowledge and lack of due diligence. Recently, the Supreme Court clarified that a company can be held liable for offences requiring mens rea, which can be ascertained from its constitutional documents, del - egated authority or specific statutory provisions. Although there is no general vicarious liability of direc - tors, Indian law requires either an express provision creating such liability or proof of an active role. Bribery The PC Act renders a commercial organisation (car - rying on business in India) liable where any person associated with it (including agents, intermediaries and subsidiaries) gives or promises an undue advan - tage to a public servant to obtain or retain business. Proof of adequate procedures designed to prevent such conduct is a defence – although the guidelines that the PC Act contemplates for such procedures have not yet been prescribed. Export Controls Contraventions attract imprisonment terms described in 3.9 Enforcement, Penalties and Voluntary Disclo - sure . Beyond civil penalty, corporate exposure of criti - cal practical significance is debarment (see 7.6 Debar- ment and Exclusion From Future Procurement ). Successor Liability A change of name does not affect the identity of an entity. Any pending investigation, prosecution or debarment continues against the renamed company (see 2.10 Exclusion Grounds ).
• The DoE’s guidelines of June 2024 discourage arbitration in domestic public procurement above INR100 million (USD1.05 million) in favour of mediation. • Criminal matters are tried by special courts under the PC Act and the PMLA. There is no statutory scheme for classified evidence in civil proceedings; courts adopt in camera hearings and redaction on a case-by-case basis. Separately, tender and contract terms themselves typically restrict disclosure of classified technology in any forum, including arbitration. 7.8 Whistleblower Protections Whistle-blower protection in India is fragmented, with the Whistle-Blowers Protection Act 2014 not fully in force. The available protections for whistle-blowers are: • the CVC’s Public Interest Disclosure and Protection of Informers resolution, which protects the identity of complainants against GoI employees; • the vigil mechanism required of listed and pre - scribed companies under the Companies Act and/ or the SEBI listing regulations; • the integrity pact – under which any bidder or third party may report a breach to IEMs; and • Section 8 of the PC Act – ie, a person compelled to give a bribe is not liable if the matter is reported to law enforcement within seven days. Reports may be made, depending on subject matter, to the CVC, the vigilance department of the buyer, the CBI, IEMs, or the SEBI.
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