Breaking: Supreme Court dismisses petitions calling for probe into Rafale Deal

Breaking: Supreme Court dismisses petitions calling for probe into Rafale Deal

Murali Krishnan

The Supreme Court today dismissed the petitions calling for an investigation into the controversial Rafale Deal.

The judgment was delivered by a Bench of Chief Justice of India Ranjan Gogoi and Justices Sanjay Kishan Kaul and KM Joseph.

The Court stated that it was satisfied that the process for procurement of the 36 Rafale jets has been complied with. It opined that it was not the job of the Court to go into issues of pricing, or choosing of the offset partner.

The Court also stated that the earlier deal was not forthcoming and the new deal came with financial advantages. Perception of individuals cannot be a ground for the Court to interfere, the Court said. It, however, clarified that the examination has been primarily from the point of examination of jurisdiction under Article 32 of the Constitution.

CJI Gogi, Justices Sanjay Kishan Kaul (Left) and KM Joseph (Right)
CJI Gogi, Justices Sanjay Kishan Kaul (Left) and KM Joseph (Right)

A total of four petitions were filed calling into question the Indian government’s deal with French firm Dassault Aviation to buy 36 fighter jets for a total of Rs. 58,000 crore. There were six petitioners in all –  ML Sharma, Vineet Dhanda, Sanjay Singh, Yashwant Sinha, Arun Shourie and Prashant Bhushan.

Below are the arguments made by some of the parties:

Sanjay Singh

Centre did not disclose price to the Court, but they have disclosed price in Parliament twice.

Till March 25, 2015, the earlier deal of 126 aircraft was on. In less than two weeks, without cancelling the earlier deal, the Centre announced the new deal.

In the document submitted to Supreme Court, the Centre conveniently adopted a lot of aspects of the earlier deal while the Court sought details of the new deal.

This document by the Centre is silent on whether a lot of steps involved in defence acquisitions were followed or not.

The matter reached the Defence Acquisition Council after the announcement of the deal by the Prime Minister.

Earlier deal of requirement of 126 aircraft was assessed in 2001. If the object is to increase the capability of the Indian Air Force, then it should have been increased to 200 or 300 aircraft. Why reduce it to 36?

The deal was for seven squadrons but it has now been reduced to two squadrons

We have had instances in this country when defence procurements have run into problems, hence a policy for such procurements was put out in public domain in 2002.

When there is a set procedure and procurement process had started based on it, and then there is a sudden deviation from that procedure, then will it not satisfy the judicial conscience of this court?

Can these changes be justified based on Intergovernmental Agreement?

Prashant Bhushan

The Court had flagged the issues of 1. Procedure 2. Offset 3. Pricing.

However, there is also a fourth issue of circumventing of tender by going for an Intergovernmental agreement.

There are three conditions for going for an Intergovernmental Agreement which are not satisfied.

In a press conference held in 2015, Dassault Chairman spoke about how the deal will be signed and 108 aircraft will be manufactured by HAL in India and there will be a transfer of technology. But a few weeks later, a joint statement was issued out of the blue. As per this new statement, only 36 aircraft will be purchased and there would be no transfer of technology. Importantly, an offset also kicked in. A week after joint statement, French press reported that offset will be given to Ambani’s company and that was why the deal was changed.

Nobody knew about this change, neither the Cabinet nor Defence Acquisition Council, not even the Defence Minister. Offset is being given to a company which has no experience in manufacturing defence equipment or aircraft. Even the 36 aircraft envisaged in the new deal have not been delivered. Now they are holding out this mirage that the aircraft will be delivered in September 2019.

On offset, Union has taken a stand that they don’t know who the offset partner is since it is Dassault which decides the offset partner and they will reveal it only in 2019. For the government to say that they don’t know who the offset partner is, runs totally contrary to the procedure laid down, since as per the procedure the offset partner has to be approved by the Raksha Mantri.

If this argument is accepted, it would mean that Dassault can execute offset contract with whoever it wants without even the Defence Ministry knowing about it.

There are many clauses in offset guidelines which require Dassault to disclose and get approval for offset partner.

Government has not disclosed anything to the petitioners on pricing citing secrecy. How does the issue of price compromise national security? It was disclosed twice in Parliament formally.

If it is a matter of national security, then the Government compromised national security twice by disclosing it in Parliament.

Centre has said in its unsigned note that the reason for scrapping the 126 aircraft deal was due to differences between Dassault and HAL. The Chairman of Dassault said that he was looking forward to the deal.

Object of Intergovernmental Agreement was only to obviate the need for tender.

The top officials have abused their authority as public servants by giving this contract to Dassault at inflated prices and by giving offset to Reliance. Reliance was chosen at the instance of the Indian government. It is therefore in the nature of a commission and constitutes an offence under the Prevention of Corruption Act.

Hence, CBI has to register an FIR as per Lalita Kumari judgment and conduct a probe.

Arun Shourie

The offset clause was slipped in. A company of the experience of Dassault which was set up in 1929 would not have chosen a company here with no experience at all.

Dassault itself has been in serious financial difficulty. Mr. Manohar Parrikar, who was then the Defence Minister, was unaware of this deal. HAL fully capable to produce aircraft. HAL has produced aircraft like Sukhoi, government statement that HAL is not capable is incorrect.

Attorney General KK Venugopal for Central government

The secrecy is with regard to weaponry and avionics. If these are disclosed, our adversaries will be able to know about what weaponry and avionics we have.

Due to our respect for Supreme Court, we have disclosed to the court, total price along with weaponry.

What the Bench should consider is whether the court is competent to judicially review this on the basis of what has been submitted (by the petitioners).

For manufacture, HAL gave a time slot which was 2.7 times of what Dassault was taking; that in itself was a negative factor. The offset partner has to be selected by the vendor. Centre does not have a sovereign guarantee but has a letter of comfort. IAF has been writing to us that it will be difficult for them to defend our country due to the shortage of aircraft, we have fallen behind a lot.

Read more about the petition filed by Yashwant Singh, Arun Shourie and Prashant Bhushan here.

Read the response of the Central government here.

Read the judgment:

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