Rafale: Govt defends decision, petitioners question it, SC reserve verdict

New Delhi, Nov 14: The Supreme Court has reserved its verdict in the Rafale Deal case. The orders were reserved by a Bench comprising, Chief Justice of India, Ranjan Gogoi, Justices S K Kaul and K M Joseph. The SC would also examine a plea for a court monitored probe.

The arguments began with the petitioners questioning how the Indian government could declare the agreement with France and then go ahead with devising the modalities. Further the petitioners also sought that the question about whether the government could enter into such contracts should be answered by a Constitution Bench.

The advocate appearing for AAP, Sanjay Singh told the court that the government has already declared the price of the aircraft at least twice. He further pointed out that the Parliament was told that the cost of the aircraft is Rs 670 crore.

He further said that the government documents are silent on whether an approval was taken from the Defence Acquisition Council and Cabinet Committee on Security before announcing the deal. He said that until March 25 2015, the deal for 126 aircraft was on. 108 jets were to be procured by HAL. But in just two weeks on April 10 2015, a joint statement was announced for a new deal for 36 Rafale jets with the same equipment as in 2007, he further contended.

Singh said that the 2007 deal for 126 aircraft was approved by the DAC. If our combat potential had declined sharply, what was the logic of striking a new deal for just 36 Rafale jets. The new deal should have been for more than 126 fighter aircraft he also said.

Issues flagged:

Advocate Prashant Bhushan in his submission said that the law ministry had flagged issues of France not providing a sovereign guarantee in the Rafale Deal and also regarding the seat of arbitration. He disputed whether it could be contracted as an Inter-Governmental Agreement under the Defence Procurement Procedure. He further said that the government short-circuited the fresh tender process for 36 aircraft to procure them through restricted Inter Government Agreement Mechanism.

He said that the IGA could be done on 3 conditions- equipment of proven tech identified by our Forces in joint exercise, large value weapon platform available at much lesser price and OEM facing an embargo on sale.

Rafale has qualified none of these, he submitted.

Bhushan further argued that the law ministry had flagged 2 problems on the 36 Rafale jets deal. The French government did not give sovereign guarantee. The money involved was high and who would be responsible if Dassault does not deliver. Moreover the venue of the arbitration dispute is in Geneva and not India and these two issues were informed to the government, he contended.

Bhushan further asked as to who took the decision on the 36 jets. On what basis did the PM announce the deal for the 36 jets. He had no authority to do so. There is gross violation in the decision making process, Bhushan contended while asking how was number of jets reduced from 126 to 36.

Bhushan also added that three and a half years have passed since the deal for the 36 jets were signed. The first jet was to be delivered in September 2019, but not single aircraft has been delivered till date. If the 126 jet deal was on, at least 18 jets would have been delivered by April 2019.

How does revealing price compromise national security:

How does making public the price of 36 jets compromise national security? The government is making a bogus argument and prices are subject to RTI. He said that the price of the 36 jets is 60 thousand crore and the deal was for 155 million Euros per jet. However now it is 217 million Euros per jet, which is 40 per cent more for the same specifications, Bhushan also said.

Bhushan also cited the complaint made to the CBI. He urged the out to order an investigation into the manner in which the off set partner was inducted.

Arun Shourie arguing in the Supreme Court cited an interview by former Defence Minister, Manohar Parrikar. He had said that the 126 Rafale jets cost Rs 90 k crore and the price per aircraft was Rs 715 crore per jet. He had also said that the decision for the 36 jets was made by PM Modi as a result of political discussions between the PM and President of France.

The amendment in the offset guidelines was slipped in with retrospective effect. Dassault is a company which is in serious financial difficulties. Had this order not gone through, it would have phased out, Shourie also said.

Shourie also questioned the lack of experience of the Indian off set parent to be picked by Dassault. It is public money and hence secrecy surrounding the deal is curious, he said.

The court then sought the presence of a responsible IAF officer in court. The CJI told the AG that the court does not want an officer from the Ministry of Defence, but the Air Force. We are dealing with the requirement of the Air Force. Someone ought to have been here, the CJI also observed.

Government responds:

Attorney General, K K Venugopal said that the secrecy is not regarding the price, but relating to the weaponry and avionics. Rs 670 crore is of the barebone jet and not any of the specifications. We cannot renegade on the agreement with France to disclose confidential information on the specifications about avionics and weaponry.

If such details come out in public domain, our adversaries will take advantage of such a disclosure. It is only out of respect for the SC that the details of the weaponry and avionic were provided, Venugopal also said.
The AG then questioned how the court could look into this issue. While opposing a judicial review the AG said that it is for the experts to examine what kind of weaponry and avionics are required. The question is whether the court is competent to deal with such an issue. The court cannot look into all this, the AG also said.

Justice Gogoi then said, any discussion on the price will be only if we commit that it should come into public domain. The court also said that the government does not need to respond to the petitioners' contentions on pricing at the moment. Until we decide that the pricing needs to be debated, there is no need for you to reply on this aspect, the CJI told the AG.

The court then asked if the base aircraft under the new Rafale Deal is the same as the one that was under the agreement with HAL. The AG said that the base aircraft remains the same. However the AG added that the details of the weaponry etc was not disclosed under the old deal as well.

SC questions

The court while reacting to the government's stand that it does not know who Dassault's offset partner is asked, " what happens to the country's interests if the offset partner chosen is not good enough and is not able to make good the contract. What was the need to amend the offset guidelines with retrospective effect, Justice K M Joseph asked.

The additional secretary said, if Dassault submits the offsite initially, we would check if the offset partner is valid or not. If later, the OEM (Dassault) runs the danger of whether we accept or the offset partner or not.

The court then said that the government cannot separate the main contract from the offset contract. It may be in the country's interest if the offset contract is executed later because that may lead to delay in production by the offset partner, the court also said.

The government said that the contract with the offset is also till the same tenure as the vendor. It is not that there will be delay on account of Induction of the offset partner. It is for the vendor to be prompt because the government may or may not accept the choice of offset partner at a later stage.

Justice Joseph asked the AG, how the PM announced the new deal before the RFP of the old agreement was to be withdrawn. While the AG tried to answer the question, the CJI said, ' your own note says that the process of withdrawal had begun in March 2015 and concluded in June.

When the SC asked the government about the law ministry's objection on Rafale, the AG Sais that there is no sovereign guarantee, but there is a letter of comfort from the French PM that honours to transmit the Inter Governmental Agreement. Hence we are covered the AG also said.

In his concluding arguments, the AG said, ' we lost soldiers in the Kargil War. IF there was Rafale at that time, we could have saved many lives. They could shoot over 60 kilometres.

To this the the CJI remarked, " the Kargil war was in 1999-2000. The Rafale came in 2014. The CJI responded, "I meant hypothetically."