Rafale fighter jets deal: Supreme Court reserves order on investigation

New Delhi | Published: November 15, 2018 3:29:28 AM

As a bench which also comprised Justices SK Kaul and KM Joseph concluded the arguments, the Centre defended the secrecy clause of the Rafale deal saying adversaries may get an advantage if all the details are disclosed.

The government also submitted that the DPP was completely followed in the deal. Justice Joseph also asked how the Centre could say so when there was no fresh RFP for the 36 jets.

By Ananthakrishnan G 

The Supreme Court on Wednesday reserved its order on pleas seeking a court-monitored probe in the procurement of 36 Rafale fighter jets from France, with the Centre reiterating that the pricing details could not be made public due to security concerns and a three-judge bench observing that it was yet to take a decision on whether the information should be made public or not.
“Whether to bring the fact on pricing in public domain or not is a decision we have to take. And we are yet to decide. The question of entering into a debate on the pricing does not arise till we take a decision,” Chief Justice of India Ranjan Gogoi said when attorney-general KK Venugopal, appearing for the Centre, said the government had submitted the pricing details to the Court in sealed covers but could not make it public.
As a bench which also comprised Justices SK Kaul and KM Joseph concluded the arguments, the Centre defended the secrecy clause of the Rafale deal saying adversaries may get an advantage if all the details are disclosed.

Refusing to make the details public, Venugopal said he would not be able to assist the court further on the pricing issue saying: “I decided not to peruse it myself as in a case of any leak, my office would be held responsible.”
He added that in pursuance to the court’s direction, “We have placed the entire price details including breakup and advantages” in sealed covers before the court out of its “respect for the Supreme Court”.
The bench also said it was dealing with the requirements of the Air Force and would like to hear from an Air Force officer and “not the official of the Defence Ministry”.
As the hearing commenced post lunch, officers of the IAF including Vice Chief of Air Staff Anil Khosla and Air Vice Marshal J Chalapathi were present in court. Chalapathi answered the bench’s queries on the latest inductions to the IAF. He said the latest induction to the force was the Sukhoi 30 which was licence manufactured by Hindustan Aeronautics Ltd at its Nasik plant adding that the IAF was also inducting the Light Combat Aircraft built by HAL in Bangalore.

To a question about their categorisation, Chalapathi said the fighters could be termed 3.5 to 4th generation fighters. “But the requirement of the IAF was for a 5th Generation fighter, right?”, asked the CJI. “4th or 5th gen”, replied the Vice Marshal said adding they had more technological superiority including stealth and capabilities for electronic warfare.
Earlier, replying to contentions that the price of the Rafale jets was revealed in Parliament twice and there was no need for further secrecy, Venugopal said: “Parliament has not been given complete costs.”
Responding to allegations by Prashant Bhushan, one of the petitioners, that there was no sovereign guarantee by France for the deal, Venugopal admitted that there is no sovereign guarantee, but asserted that there is a letter of comfort by France which would be as good as a governmental guarantee.
Justice Joseph also asked the AG “how did the Prime Minister make a statement in April 2015” about buying the 36 jets when the Government had in documents submitted to the Court said that the RFP was withdrawn only in June 2015.

Justice Joseph was referring to the joint statement issued by Prime Minister Narendra Modi and then French President Francois Hollande on April 10, 2015, during Modi’s visit to France.
As Venugopal began to explain, the CJI interjected and pointed out that “the answer to the question was in that para (in the government document) itself – that the process for RFP withdrawal was initiated in March 2015 and…was finally withdrawn in June 2015”.
The bench also questioned the AG on the Centre’s argument that French company Dassault Aviation which makes the Rafale “is yet to submit a formal proposal in the prescribed manner indicating details of IOPs (Indian Offset Partners) and products for offset discharge”.
Justice Joseph referred to the Defence Procurement Policy (DPP) and sought to know if the Centre was not required to know about the offset partners.

Venugopal said that some amendments were made to the rules in 2015 by way of which the onus was on the vendor to intimate the government about the IOP.
He pointed out that the as per the Offset Contract, the Original Equipment Manufacturer (OEM) was required to confirm the details of Indian Offset Partners “either at the time of seeking offset credits or one year prior to discharge of offset obligation”. In the case of the Rafale jets, the “annual offset implementation schedule, as per offset contract, will commence from October 2019”.
Justice Joseph then asked, “what was the need to change the policy when it was working in a particular way?”.
Venugopal replied that a committee had pointed out some difficulties in it and recommended “11 amendments” and these were also “approved by the (then) Raksha Mantri In January 2014”.
Justice Joseph asked what would happen to the country’s interest if the offset partner is unable to deliver the equipment.
Responding to this, the Additional Defence Secretary, who was present in Court, said that if the OEM submitted the offsets initially, the government would check if the IOP was valid. But if it was submitted only later, then the OEM runs the risk of whether the government decided to accept or not accept it, he pointed out.

The government also submitted that the DPP was completely followed in the deal. Justice Joseph also asked how the Centre could say so when there was no fresh RFP for the 36 jets. The AG replied that RFP was not needed as it was an Inter-Governmental Agreement (IGA).
Advocate Prashant Bhushan, who appeared for himself and co-petitioners and former ministers Arun Shourie and Yashwant Sinha, alleged that the amendments made to the DPP in 2015 “has given the government cover to say it doesn’t know who offset partners are”.
“They now say the time for Dassault to say who Offset partners are has not yet come which means that the company can choose whoever they want to as offset partner without the government knowing anything”, he said.
Bhushan also referred to Hollande’s reported comments that France did not have an option while choosing the offset partner and questioned the experience of Anil Ambani’s Defence company which was chosen as one of the Offset Partners.

Bhushan also questioned how revealing the price of the Rafale would affect national security when the RFP for the 126 jets had all the technical details of the aircraft to be purchased.
Raising the same point, Shourie said the RFP had all the technical specifications and added: “it’s strange that price is confidential while technical details are known in RFP”.
He said that the “pricing is an important matter because the joint statement had said that the equipment which was being acquired was of the same configuration (as was tested by IAF). The AG is also saying the equipment being procured is of same configuration”. Shourie said that it was not possible to infer the technicalities from the price adding “something is being hidden”.

“In government, we were told that intergovernmental agreements are to avoid middlemen. Our doubt is if it’s conveniently being used to introduce middlemen”, the former union minister said.
Raising doubts on the deal, he referred to Anil Ambani’s reported statement that the PM had advised him to turn to the Defence business.
Shourie argued that a company like Dassault “would never have” chosen Anil Ambani’s Reliance “which has no experience and which had huge debts”.

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