Daily Times

The judgment of the Supreme Court of India dismissing our petition seeking an independent court monitored investigation into the Rafale deal is as shocking as it is disappointing. We had gone to court after making a detailed complaint to the Central Bureau of Investigation (CBI) pointing out the following:

1. Prime Minister Narendra Modi signed an agreement for 36 Rafale jets on April 10, 2015, without any requirement of 36 jets given by the Indian Air Force headquarters and without the approval of the Defence Acquisition Council (DAC), which are the mandated first steps for any defence procurement.
2. The IAF had in fact been asking for at least 126 fighter jets which had been approved by the DAC, tenders had been issued, six companies had applied, two were shortlisted and finally Dassault was selected as the lowest tender. The tender was on the basis that 126 fighters would be procured out of which only 18 would be bought in a ready to fly condition and the remaining would be manufactured in India by HAL with transfer of technology to HAL.
3. By March 25, 2015, the tender negotiations had been virtually completed with Dassault and the CEO of Dassault in the presence of top officials of IAF and HAL had said that the contract negotiations were 95 per cent complete and that the deal would be inked soon. There was nothing to suggest that the deal had run into rough weather. However, on April 10, the PM unilaterally signed a 36 aircraft deal with the French president, all to be purchased in a ready to fly condition. Thus 126 was reduced to 36, transfer of technology and make in India was knocked out and a clause for offset partners was brought in. Exactly at this time Anil Ambani registered a new company Reliance Defence and Dassault entered into a partnership with this company which was to get the bulk of the offset contract from this deal.
4. It thereafter transpired that the benchmark price of 36 Rafale aircraft was fixed by three senior officials in the price negotiating committee, at Rs 5.2 billion.

However, this price was unilaterally increased by the cabinet committee on security headed by the Prime Minister to Rs 8.2 billion and the contract was finally awarded for ?7.2 billion. The per aircraft cost for the 36 aircraft deal comes to around Rs16.5 billion. This can be contrasted with the price mentioned by the then Defence Minister Parrikar in an interview immediately after April 10 where he said that the 126 aircraft in the earlier deal would have cost around Rs900 billion (about Rs7.15 billion per aircraft).

It was on these facts that we sought a court monitored investigation (when the CBI did not register an FIR on our complaint which is mandatory as per law). The court’s judgement of December 14 does not even address the documented facts stated in our petition. On the contrary, it proceeds on the basis that we were challenging the contract itself and uses the facts stated by the government either in the short open affidavit filed or perhaps facts claimed in the sealed cover handed only to the court which was never shared with us. In fact, some of the facts mentioned in the court judgement are not only not on record but are patently incorrect.

Wrong about CAG report

The court mentions in para 25 – “The pricing details have, however, been shared with the Comptroller and Auditor General and the report of the CAG has been examined by the Public Accounts Committee. Only a redacted portion of the report was placed before the Parliament, and is in public domain.”

The facts mentioned above are neither on record nor factually correct. The PAC judgment has not been submitted to the Public Accounts Committee and no portion of the CAG report has been placed before Parliament or placed in the public domain. This factually incorrect statement must be based on some communication (not on record and unknown to us) made by the government to the court. That the court has relied on such communication which is factually incorrect on three counts shows how dangerous it is for the court to rely on statements made in a sealed cover (not subject to scrutiny or verification).

Wrong about testimony of IAF officers

The court has also mentioned that the Chief of the Indian Air Force had communicated his reservation regarding the disclosure of the pricing details which would adversely affect national security. This alleged fact was also not on record and it is not understood as to where and how the court got this. The court has also mentioned that Air Force officials were examined by the court on the acquisition process and pricing.

Ignoring major deviations from procurement procedure

On the acquisition process, the court obligingly accepts the government claim that the acquisition process in the earlier 126 aircraft deal got stuck and was not proceeding which is why the new deal of 36 aircraft had to be made.

The court does not even deal with the facts mentioned by us completely shredding this claim of the government where we had annexed a video of the CEO of Dassault of March 25, 2015, saying that the negotiations were 95 per cent complete and the deal would be inked soon. He had also said that Dassault would remain complaint to the RFP and that they were happy and satisfied with HAL. The Court also does not deal with the specific issue of violation of the procurement procedure raised by us, that the PM signed the 36 aircraft deal with the French government on April 10, before any requirement given by the IAF and before DAC okaying the need to buy 36 aircraft without any transfer of technology.

The Prime Minister unilaterally announced a new deal and the CCS rubber stamped these with retrospective effect. The Court takes a dangerous step: in condoning the total disregard of procedures, the court cites clause 75 which says “any deviation from the prescribed procedure will be put up to DAC through DPP for approval”.

Were this to become the norm for subsequent judicial examination, wrongdoers in control of governments would have a carte blanche. They could do what they want – as the PM did in this instance – and then have it retrospectively rubber stamped.

Confusion over Anil Ambani’s firm

On the issue of offset contracts to Ambani’s company, the court says that this was to be decided by Dassault which was already in negotiation with Reliance since 2012. This despite the fact that the Reliance Company with which Dassault was once discussing, was a completely different company of Mukesh Ambani and had nothing to do with the new company of Anil Ambani incorporated at the time of the 2015 deal.

The court also overlooks the specific provisions of the DPP and the offset guidelines pointed out by us which requires every offset contract to be approved by the defence minister himself.

On this basis, the court concludes that there is no reason for any intervention on the sensitive issue of purchase of 36 aircraft by the government. It says that “perception of individuals cannot be the basis of a fishing and roving enquiry by the court”.

The court overlooks the fact that we were not seeking any enquiry by the court but only an independent investigation by the CBI or SIT. The law on this has been laid down in a Constitution bench of the Supreme Court in Lalita Kumari’s case which says that if allegations made in a complaint are of a criminal offence, then an FIR must be registered and investigation must be made. The allegations in the complaint by us were of huge commissions being given to a company through the guise of offset contracts.

No ‘clean chit’ for government

It is in these circumstances that we say that we are shocked and disappointed by the court’s judgment. However, since the court has not examined nor said that it was examining the facts in detail, and has dismissed the petition only on the basis of its perception of its own jurisdiction under Article 32 of the Constitution, this judgment can by no means be considered to be the Supreme Court’s clean chit to this deal.

All the facts and circumstances show that this was an unholy deal which has compromised national security, plundered our public exchequer and will bleed our public sector defence company, HAL. The allegation that this contrived deal has been struck only for the purpose of giving large commissions to Anil Ambani’s company in the guise of offset contracts still needs to be investigated.

The Supreme Court’s judgment is in line with earlier judgments of the courts in the Bofors case and in the Birla Sahara case where we have seen that courts have stopped short of ordering independent investigations in matters involving corruption in high places or even given judgments seeking to put a lid on those cases.

The issue will continue to agitate the public mind until there is full public disclosure of all the facts and a comprehensive and independent investigation into the deal.

Published in Daily Times, December 16^th2018.