Corporate Criminal Liability in India: An Analysis Through the Lens of The Nirav Modi–PNB Fraud

By Aditi Tiwari, Chanakya National Law University, Patna.

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Abstract

The evolution of corporate criminal liability in India has been both reactive and reluctant, often exposed only in the aftermath of large-scale financial frauds—none more illustrative than the Nirav Modi–Punjab National Bank scam. This scandal, which shook the Indian banking and corporate sectors, revealed significant gaps in the existing legal framework for holding corporations and their key personnel accountable for economic offences. Traditionally, Indian law approached corporate liability through the doctrine of vicarious liability, which attributed crimes committed by employees to the company itself without necessarily proving the company’s direct intent or mens rea. However, as corporate frauds have grown in scale and complexity, the limitations of this approach have become glaringly apparent. The Nirav Modi case brings to the forefront the urgent need to re-examine and strengthen the principles underlying corporate criminal liability. This paper aims to analyse the current statutory and judicial frameworks governing corporate criminal liability in India, focusing on the challenges of attributing criminal intent to corporate entities. By using the Nirav Modi fraud as a case study, the paper highlights the failures of regulatory oversight, internal controls, and accountability mechanisms that allowed the fraud to go undetected for years. The study concludes with policy recommendations for a more robust statutory framework that incorporates clear liability standards, stricter oversight of financial institutions, and effective enforcement tools. Strengthening whistle blower protection and enhancing accountability at the board and compliance level are emphasized as essential steps toward preventing future corporate misconduct.

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