INTRODUCTION

A company, once incorporated under Section 7 of the Companies Act, 2013 (“Act”), is recognised as a body corporate as per Section 9 of the Act, having a separate legal entity. In other words, the company gains the status of a juristic person, possessing perpetual succession, the power to acquire, hold and dispose of property, enter into contracts, sue and be sued. Indian jurisprudence, as well as several comparative jurisdictions have progressively accepted that a company can be held criminally liable for offences committed in the course of business, notwithstanding the impossibility of imposing custodial sentences on such entities. For crimes where imprisonment is prescribed, courts have routinely substituted penal consequences in the form of fines, reaffirming the position that companies can be offenders under criminal law.

This recognition of companies as “offenders” prompts an equally critical question: if companies can be prosecuted and penalised as “offenders”, can they not also be recognised as “victims”, entitled to assert participatory rights in criminal proceedings where they have suffered harm? The Supreme Court of India (“Supreme Court”), through its decision in Asian Paints Ltd. v. Ram Babu (“Judgement”), confronted this pertinent question, wherein it established that a company can qualify as a “victim” under Section 2(wa) of the Code of Criminal Procedure, 1973 (“CrPC”). Consequentially, a company can invoke the proviso to Section 372 of the CrPC to appeal an order of acquittal passed in a case, despite not being the formal complainant on record.

THE CORPORATE INJURY

The dispute surrounding this Judgement arose when Asian Paints Limited (“Company”), a public limited company and a major player in the business of manufacturing paints and paint products in the Indian market, discovered counterfeit goods bearing their brand name, trademarks and designs being sold in the open market. The Company, through a power of attorney engaged M/s Solution, an Intellectual Property Rights (“IPR”) consultancy firm, who further, through its authorised representatives was tasked with investigating illegal practices in respect of the Company’s IPR and initiating enforcement action.

Following the investigation, a criminal complaint was filed by M/s Solution against a shop selling counterfeit products of the Company, which resulted in the registration of a First Information Report (“FIR”) under Sections 420 and 120B of the Indian Penal Code, 1860 (“IPC”) and under Sections 63 and 65 of the Copyright Act, 1957. The accused were alleged to be involved in manufacturing and distributing deceptively similar products, misleading consumers and infringing the goodwill and IPR of the Company. The trial court convicted the accused; however, the first appellate court set aside the order of the trial court and acquitted the accused.

The Company, aggrieved by both the legal outcome and the commercial harm sustained, filed an appeal before the Rajasthan High Court (“High Court”), under the proviso to Section 372 of the CrPC. At this stage, a procedural objection was raised regarding the maintainability of the appeal. The appeal was challenged on the ground that the Company was not the original complainant, since the complaint had been filed by M/s Solution, and thus, lacked the locus standi to appeal the acquittal. The High Court also held that even the complainant, M/s Solution or its authorised representative could maintain the appeal only after seeking the leave of the High Court in view of the provisions of Section 378(4) of the CrPC. This led to a deeper inquiry into the scope of the term “victim” under the CrPC and whether it extends to companies that have been aggrieved in such circumstances.

STATUTORY FRAMEWORK

Section 2(wa) of the CrPC defines the term “victim” as, “a person who has suffered any loss or injury caused by reason of the act or omission for which the accused person has been charged.” Moreover, the term “person” in Section 2(wa) of the CrPC also includes a “company or association or body of persons” by virtue of Section 11 of the IPC. Thus, the statutory framework recognises that a company cannot only be prosecuted as an accused juristic entity but can also qualify as a “victim” if it suffers loss or injury from an act committed by an accused.

Additionally, the proviso to Section 372 of the CrPC permits a victim to file an appeal against any order passed by a court acquitting the accused or convicting the accused for a lesser offence or imposing inadequate compensation upon the accused. The proviso also states that the appeal shall lie to the court to which an appeal ordinarily lies against the order of conviction of such court. Crucially, this right to appeal is independent of the complainant’s identity as well as other provisions, particularly, Section 378(4) of the CrPC, which provides that in cases instituted upon a complaint, the complainant may appeal against an acquittal only with the special leave of the High Court.

This framework set the stage for the Supreme Court’s ruling in this Judgement, wherein it was asked to resolve whether a company could avail this remedy even when a third-party consultant had instituted the complaint.

THE SUPREME COURT’S REASONING

In its decision, the Supreme Court firstly addressed the obvious issue that whatever action was taken by M/s Solution, or its authorised representative was clearly for and on behalf of the Company, and it was ultimately the Company’s interest which was sought to be served through the engagement of M/s Solution. The Supreme Court then affirmed the Company’s right to appeal, grounding its reasoning in the plain text and purpose of Section 2(wa) and the proviso to Section 372 of the CrPC.

The Supreme Court observed that Section 2(wa) of the CrPC accorded an expansive understanding to the term “victim” and not a narrow or restricted meaning. Further, it underscored that the Company was indisputably a “victim” under the statutory definition, having suffered reputational harm and commercial injury from the sale of counterfeit goods. Drawing from its ruling in Jagjeet Singh v. Ashish Mishra , the Supreme Court reiterated that the concept of a “victim” is not synonymous with “complainant” or “informant”. A victim need not be the party that initiates proceedings but may nonetheless have a legally protected interest in the outcome. Participatory rights of a victim span from the stages of investigation to appeal and cannot be constrained by procedural technicalities relating to the mere identity of the complainant.

With respect to the proviso to Section 372 of the CrPC, the Supreme Courtobserved that the provision is a selfcontained and independent section, which shall not be read conjointly with any other provision in the CrPC, much less Section 378 of the CrPC. It held that as per the language of the proviso, the right to appeal was granted to “victims” against “any order” of acquittal, and hence, the same must be interpreted liberally. Accordingly, an appeal against the acquittal was maintainable before the High Court. Further, the Supreme Court held that this right operated independently of Section 378 of the CrPC. Unlike Section 378(4), which is leavedependent, the right under the proviso to Section 372 is automatic and does not require prior authorization. The Supreme Court relied on Mallikarjun Kodagali v. State of Karnataka , and Mahabir v. State of Haryana , to support this purposive construction.

In light of this, the Supreme Court restored the Company’s appeal, holding that it was both maintainable and properly instituted.

CONCLUSION: TOWARDS A JURISPRUDENCE OF CORPORATE JUSTICE

The Supreme Court’s ruling in this Judgement marks a significant development in the evolving interface between criminal law and rights of corporate entities. It reinforces the principle that just as companies may be prosecuted for offences, they may also take the position of aggrieved parties entitled to invoke remedies under the criminal justice system. The Judgement affirms that the participatory rights of victims, particularly corporate entities affected by offences like IPR infringement, passing off, or fraud cannot be curtailed due to procedural formalities that are baseless. This ruling is critical for brand owners and intellectual property holders, especially those operating through consultants or investigators to initiate enforcement actions. It clarifies that the right to seek remedy from the legal injury remains with a company, even if the formal complaint is filed through an authorised representative.

Pertinently, it bridges a long-standing asymmetry in corporate criminal law: if a company can be a criminal, it can, under the right circumstances, also be a victim. This recognition not only aligns with the logic of corporate personhood but also ensures that enforcement rights and remedial mechanisms are meaningfully accessible to corporate entities who are navigating the challenges of IPR infringement and corporate fraud.

Bandaging The Wound: The Supreme Court’s Recognition of Corporate Victimhood

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ABOUT AUTHORS

ASHIMA OBHAN

SHREYA RAKHEJA