INDIA Law and Practice Contributed by: Priyank Ladoia, Asif Ahmed, Pranav Tomar and Puneet Dhanoa, AZB & Partners
be held liable for offences by the target entity subject to the terms of the scheme of the merger, the nature of allegations and existence of proof against the entity. After examining the law on this subject, the Supreme Court held that criminal liability of a company: • is recognised where it can be attributable to individual acts of employees, directors or officials of a company, or to juristic per - sons (while relying on past pronouncements in Tesco , Meridian Global Funds , Standard Chartered Bank and Iridium ); • is recognised even if its conviction results in a term of imprisonment ( Meridian Global Funds and Iridium ); • cannot be transferred ipso facto, except when in the nature of penalty proceedings (relying on McLeod Russel ); • ceases to exist given that the legal effect of amalgamation of two companies is the destruction of the corporate existence of the transferor company; and • is succeeded to by the transferee company, apart from only in defined legal proceedings. In criminal cases in India, an effective defence strategy must be based on facts that are plausi - ble and backed by credible and admissible evi - dence. There cannot be a straight-jacket formula for defence, since each criminal trial turns on its own facts and evidence. Further, the defence strategy keeps evolving as and when evidence is produced and as testimonies are recorded in court. During a trial, an accused person has a chance to establish their defence against the charges 4. Defences and Exceptions 4.1 Defences
brought by the prosecution, including by cross- examining witnesses and bringing witnesses of their own. For certain specific offences relating to a public servant under the PCA, nо enquiry or investiga - tion can be initiated without the prior sanctioning of the state or the Central Government (as the case may be). The issue of whether this proce - dural requirement for obtaining a prior sanction (as introduced by the Amendment Act in 2018) will apply retrospectively is currently pending before the Supreme Court. Further, if a person is found to have been “com - pelled” to give undue advantage to a public servant, they shall not punished for an offence of bribing the public servant, subject to the “compelled” person reporting the matter to law enforcement agencies within a period of seven days of giving the undue advantage. Further, if a person gives undue advantage in order to assist law enforcement agencies in their investigation under the PCA, such persons are not liable for the offence of bribing public offi - cials. The PCA recognises that a “commercial organi - sation” shall not be liable to such prosecution if it is able to prove that it had in place adequate procedures for preventing persons associated with the commercial organisation from undertak - ing such conduct. Pertinently, the PCA states that the Central Government shall prescribe such adequate procedures; however, none have been notified to date. Until such time, a commer - cial organisation may choose to frame its own policies and conduct regular internal training in order to present a defence that it took steps to prevent any such acts from being committed by its officials.
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