Christmas gift for govt: SC dismisses PILs demanding probe into Rafale deal

Dealing a huge blow to the opposition, the Supreme Court on Friday wrote off all petitions seeking a court-monitored probe into the contentious multi-billion dollar defence deal with France. Finding “no proof of wrongdoing” by the NDA government in the Rafale fighter jet quotation process, the three-judge bench led by CJI Ranjan Gogoi, ruled that there was “no reason for any intervention by this court on the sensitive issue…”

This comes right as support for the Congress over the potential “larger than Bofors” scam was gathering momentum. The ruling by the bench delivers a significant political victory to the Narendra Modi-led central government right before the 2019 Lok Sabha polls and after a slew of embarrassing Assembly election defeats in key states this week.

“Truth always prevails,” said BJP chief Amit Shah, calling for an apology by Congress president Rahul Gandhi, who repeatedly targeted Prime Minister Narendra Modi on the Rafale deal while campaigning for the recent state elections.

What the court said

Saying that it was satisfied with the level of compliance to the process for procurement, the apex court ruled that there is no reason to doubt the decision-making process followed in the Rafale deal. It is a “hard fact,” the bench also comprising Justices Sanjay Kishan Kaul and KM Joseph said, adding that the 36-jet-deal was negotiated after the earlier RFP for 126 jets came to nothing, the court said.

“So far as the decision-making is concerned, we have studied the material and interacted with senior air force officers,” CJI Gogoi said, adding, “there was no occasion to doubt the process”. Minor deviations, if they did occur, were no reason to scrap the contract or demand a detailed scrutiny by the court, he added. The bench also ruled that examining specific financial details, like the cost of each aircraft, isn’t within the court’s purview.

Backing the deal, the court further said that the country cannot afford to be unprepared for national security situations, where “our adversaries are stated to have acquired not only 4th Generation, but even 5th Generation aircrafts, of which, we have none”. The judges referred to a deposition by Air Force officers in court, as was demanded in the last hearing.

What the court said at the last hearing

In October, the court issued an ultimatum to the central government to furnish pricing details of the 36 Rafale fighter jets.

The documents charting the iterations of the deal were submitted to the court in a sealed cover, but the bench reserved its final verdict in November, on finding that they shed inadequate light on whether approval was taken from the Defence Acquisition Council and Cabinet Committee on Security before announcing the deal.

Following this, the court had sought to better understand the process which allegedly culminated in the overpriced final deal with the French government in 2015. Further explanation was also demanded regarding the alleged immediacy of procuring 126 jets due to declining combat potential while reducing the number to just 36 jets, at the same time, within a span of three years.

The petition

Chief petitioners Arun Shourie, Prashant Bhushan, and Yashwant Sinha who moved Supreme Court against the gross discrepancies in the offset deal and asked for a court-mandated probe, flagged numerous issues that allegedly amounts to criminal misconduct by high ranking government officials.

First, they asked how the NDA-BJP government could declare the agreement and then go ahead devising the modalities without a tender. Bhushan, appearing for himself and former Union Ministers Shourie and Sinha, accused the government of taking the restricted IGA route to acquire the new number of jets, in order to avoid submitting a tender and short-circuit the acquisition process.

He further questioned the government’s insistence on keeping the pricing details under wraps, and how divulging it compromises national security, especially since it was public money. It is also common knowledge that non-disclosure agreements usually pertain to technical specifications and operational capabilities of the aircraft; it does not oblige the buyer to keep the price secret.

The discrepancies in the original deal and its iterations

Based on a detailed requisition by the Indian Air Force, the UPA government in 2007 issued a request for proposal (RFP) for 126 Medium Multi-Role Combat Aircrafts (MMRCA) inclusive of all costs from initial purchase to transfer of technology and licensed production.

Six vendors had submitted bids, of which Dassault Aviation (the lowest bidder) began negotiations with the Indian Government in 2012. Till then, the Rs. 42,000 crore deal envisaged that the first 18 aircraft would be procured in a “fly-away (fully built) condition” and the remaining 108 fighters would be manufactured in India by Hindustan Aeronautics Ltd (HAL) under a Transfer of Technology agreement.

After Prime Minister Narendra Modi signed the deal in April 2015, the then Defence Minister Manohar Parrikar disclosed that the price for 126 aircrafts would have been about Rs 90,000 crore, inclusive of everything.

Within two days of this announcement, a completely new deal had been struck, according to which, 36 Rafale jets were to be purchased in a government-to-government agreement. India and France signed a Rs 59,000 crore deal on September 23, 2016, for 36 Rafale jets.

The Congress has alleged a massive scam behind the massive irregularities in the deal, with respect to the new cost of each aircraft of over Rs 1,670 crore as against Rs 526 crore finalised by the UPA government. To put things in perspective, Qatar had purchased 12 Rafale fighter jets in November 2017 for around Rs. 694.80 crores per aircraft. The criticism was compounded by the government’s insistence on a “secrecy clause” that prevents them from sharing or explaining the discrepancy in cost.

What the court said about Reliance Defence

On the subject of awarding offset contracts to Anil Ambani’s Reliance Defence, the bench said that it was the job of the Centre and the vendor to decide.  Ambani, in a statement after Friday’s hearing, said the ruling “conclusively established the complete falsity of wild, baseless and politically motivated allegations”.

Much of the Rafale intrigue surrounded HAL’s exit from the work-share agreement, just days before the new deal was signed in 2015. Two private companies, Adani Defence Systems and Technologies Limited and Anil Ambani’s newly-minted Reliance Defence Ltd, were inducted just days before the new 36 Rafale deal came, while a public sector organisation with 60 years of experience in aircraft manufacturing was manifestly kicked out.

According to The Wire, Reliance is to hold 51% of the equity and Dassault, 49%. This brand new company is the one that has been assigned 70% of the offset benefits – that is, orders worth Rs 21,000 crore out of a total offset liability of Rs 30,000 crore.

Prarthana Mitra is a staff writer at Qrius

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