Vindicating the government stand and taking the sting out of the Opposition Congress attack over alleged irregularities in the purchase of 36 Rafale fighter aircraft from France, the Supreme Court Friday dismissed all four petitions seeking a court-monitored investigation, saying it found “no occasion to really doubt the process” of decision making, pricing and selection of offset partners.
It said there was no material to show that the government had favoured anyone commercially. The bench of Chief Justice of India Ranjan Gogoi, Justices S K Kaul and K M Joseph, ruling out any intervention on this “sensitive” issue and underlining that “our country cannot afford to be unprepared/underprepared”, said “perception of individuals cannot be the basis of a fishing and roving enquiry by this court, especially in such matters”.
The judges said “we do not find any substantial material on record to show that this is a case of commercial favouritism to any party by the Indian government, as the option to choose the IOP (Indian Offset Partner) does not rest with the Indian government”.
The choice of Reliance Aerostructure Ltd as an offset partner by Dassault Aviation Ltd, which manufactures the Rafale, was one of the issues raised by the petitioners who alleged that the deal was tweaked to favour the Anil Ambani-owned company.
The petitioners — lawyers M L Sharma and Vineet Dhanda, AAP MP Sanjay Singh, and former Union Ministers Yashwant Sinha and Arun Shourie and activist-lawyer Prashant Bhushan — had sought a direction to the CBI to register an FIR for alleged irregularities in the deal.
“We have studied the material carefully. We have also had the benefit of interacting with senior Air Force officers who answered court queries in respect of different aspects, including that of the acquisition process and pricing. We are satisfied that there is no occasion to really doubt the process… even if minor deviations have occurred, that would not result in either setting aside the contract or requiring a detailed scrutiny by the court,” the bench said.
On pricing, the judges said “we have examined closely the price details and comparison of the prices of the basic aircraft along with escalation costs as under the original RFP (Request for Proposal) as well as under the IGA (Inter Governmental Agreement). We have also gone through the explanatory note on the costing, item wise” and that “it is certainly not the job of this court to carry out a comparison of the pricing details in matters like the present”.
The bench said it was not saying anything more on the pricing issue “as the material has to be kept in a confidential domain” — during the hearing, the government, on the court’s directions, had submitted the complete pricing details in a sealed cover to the bench.
On the offset partner selection, the court said “it is neither appropriate nor within the experience of this court to step into this arena of what is technically feasible or not”.
The judgment noted that the Defence Procurement Policy (DPP) 2013 “envisages that the vendor/OEM (Original Equipment Manufacturer) will choose its own IOPs (Indian Offset Partners)” and “in this process, the role of the government is not envisaged… mere press interviews or suggestions cannot form the basis for judicial review by this court, especially when there is categorical denial of the statements made in the press, by both the sides”.
On the tender, the court said it was “not for construction of roads, bridges, etc” but was “a defence tender for procurement of aircraft” and “the parameter of scrutiny would give far more leeway to the government, keeping in mind the nature of the procurement itself”.
On the decision-making process, it said “broadly, the processes have been followed. The need for the aircraft is not in doubt. The quality of the aircraft is not in question. It is also a fact that the long negotiations for procurement of 126 MMRCAs have not produced any result, and merely conjecturing that the initial RFP could have resulted in a contract is of no use. The hard fact is that not only was the contract not coming forth but the negotiations had come practically to an end, resulting in a recall of the RFP”.
“We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircraft in place of 126. We cannot possibly compel the government to go in for purchase of 126 aircraft,” it said.
The government had told the court that delay in acquisition of the fighter aircraft had given time to adversaries to induct latest generation aircraft. The judgment reflected this concern: “Our country cannot afford to be unprepared/underprepared in a situation where our adversaries are stated to have acquired not only 4th generation, but even 5th generation aircraft, of which, we have none” and “it will not be correct for the court to sit as an appellate authority to scrutinise each aspect of the process of acquisition.”
The court noted that the process for purchase of the 36 Rafale jets was concluded on September 23, 2016, but “nothing was called into question, then”.
“It is only taking advantage of the statement by the ex-President of France, Francois Hollande, that these set of petitions have been filed, not only qua the aspect which formed the statement, that is, the issue of IOPs but also with respect to the entire decision making process and pricing… we do not consider it necessary to dwell further into this issue or to seek clause-by-clause compliances”.
On the petitioners’ assertion that Reliance Aerostructure Ltd had come into being only in April 2015 and, therefore, there was no reason for Dassault to have engaged its services, the court said “media reports of February 2012 are stated to suggest that Dassault, within two weeks of being declared the lowest bidder for procurement of 126 aircraft by the previous government, had entered into a pact for partnership with Reliance Industries (another business group) in the Defence sector. Dassault has also issued a press release stating that it has signed partnership agreements with several companies and is negotiating with over hundred other companies…”
“It is no doubt true that the company, Reliance Aerostructure Ltd, has come into being in the recent past, but the press release suggests that there was possibly an arrangement between the parent Reliance company and Dassault starting from the year 2012. As to what transpired between the two corporates would be a matter best left to them, being matters of their commercial interests, as perceived by them,” it said.
Late last month, a French anti-corruption NGO complained to the French National Public Prosecutor, seeking an investigation in the Rafale deal. That complaint is “part of all items being analysed” by the prosecutor’s office, said an official spokesperson.
The court had reserved its verdict in the matter on November 14 after hearing extensive arguments.