Evading Corporate Criminal Liability Through Mergers And Acquisitions In India
- IJLLR Journal
- Jun 26
- 1 min read
S. Rahul Aaditya, Tamil Nadu National Law University
ABSTRACT
This paper explores the issue of criminal successor liability in India in the context of mergers and acquisitions (M&A). Despite statutory provisions allowing continuation of legal proceedings post-merger, Indian courts have largely shielded successor companies from inheriting criminal liability due to the doctrine of "civil death" of the transferor company. Through analysis of key judgments—such as Religare Finvest Ltd. v. State of NCT Delhi , Nicholas Piramal India Ltd. v. S. Sundaranayagam, and Iridium India Telecom Ltd. v. Motorola Inc. —the study reveals inconsistencies between legal frameworks like Section 232(3)(c) of the Companies Act, 2013, and judicial interpretations. These gaps allow corporations to potentially evade accountability for pre-merger offenses such as fraud and money laundering. In contrast, jurisdictions like the United States and France impose criminal liability on successor entities under doctrines such as substantial continuity and asset absorption. The paper argues that India lacks a robust mechanism to prevent corporate impunity post-M&A. It proposes reforms including adoption of the Substantial Continuity Doctrine, stricter due diligence mandates, and incorporation of whistleblower protections to align with global standards. The research underscores the need for legislative clarity and judicial reconsideration to ensure that corporate restructuring does not become a tool for escaping criminal responsibility. By addressing these lacunae, India can enhance corporate accountability and safeguard public interest in its growing M&A landscape.
