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SC recognises companies as victims under criminal law
Supreme Court rules companies can be "victims" under CrPC, allowing them to appeal acquittals, reshaping corporate rights in criminal cases.
In a ruling that could fundamentally reshape corporate rights in criminal litigation, the Supreme Court has held that companies can be considered “victims” under the Code of Criminal Procedure (CrPC) and are entitled to appeal acquittals, even in cases where the state does not pursue one.
A bench of Justices Ahsanuddin Amanullah and Prashant Kumar Mishra allowed an appeal filed by Asian Paints Ltd, setting aside a Rajasthan High Court order that rejected its right to challenge the acquittal of an individual accused of selling counterfeit paint under its brand name.
“This is a neat question of law of significance namely, as to whether the appellant would fall under the definition of ‘victim’ in terms of Section 2(wa) read with the proviso to Section 372 of the CrPC… We are of the considered opinion that the High Court erred in holding otherwise,” held the bench on Monday.
The dispute arose in 2016, when a market investigation by an intellectual property rights (IPR) consultancy firm engaged by Asian Paints uncovered fake products bearing the company’s trademark at a shop named “Ganpati Traders” in Tunga, Rajasthan. The shop was operated by Ram Babu, and 12 buckets of allegedly counterfeit paint were seized during a police raid.
Although the trial court initially convicted the accused, the sessions court overturned the decision, acquitting him. When Asian Paints sought to challenge this acquittal, the Rajasthan High Court refused to entertain the appeal, ruling that only the original complainant , typically the police or a public prosecutor, could do so.
The Supreme Court, however, disagreed. It held that corporate entities affected by offences like counterfeiting qualify as “victims” under Section 2(wa) of the CrPC, which defines a 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.”
Senior advocate Tapesh Kumar Singh and advocate Ajay Singh, appearing for Asian Paints, argued that the harm suffered by the company, both financial and reputational, was real, substantial and deserving of legal remedy.
The top court accepted this argument, saying: “There cannot be two opinions that the appellant has suffered due to counterfeit/fake products being sold… The appellant would suffer financial loss and reputational injury if such products would be bought by the public under the mistaken belief that the same belonged to the appellant’s brand.”
The bench, while referring to the legal provisions, clarified that the right to appeal under the proviso to Section 372 CrPC accrues directly to the victim upon an acquittal, regardless of whether the State chooses to act. “To hold otherwise,” the court said, “would amount to completely negating the proviso to Section 372.”
In a detailed legal commentary, Singh Law Chambers LLP, which represented Asian Paints across all stages of the litigation, hailed the judgment as a “foundational shift” in how India’s criminal justice system views corporate harm.
“The Supreme Court’s acceptance of a company’s right to appeal an acquittal, independent of state action, marks a pivotal evolution in the interpretation of victim rights in economic offences,” the firm noted.
It added that the ruling also encourages companies to invest more in evidence collection, legal strategy, and proactive litigation. “This judgment will likely encourage companies to treat legal risk as a core brand and business concern,” Singh LLP stated.
