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Rafale Deal Truth Unravelled: Judicial Review
by Dr. Jaipal Singh Bookmark and Share

There is a popular proverb “A liar has no legs to stand upon” which essentially implies that the falsehood cannot stand truth for long but what if it has wings instead because then it is far more swift and versatile to escalate untruth and disinformation over a large area and population without constraints of time and space. This appears to be absolutely true in the context of the current Indian politics and some politicians. Based on a few half-baked stories in some Indian magazines and newspapers, well known for their anti-government reporting, the top leadership of the Indian National Congress had started a systematic campaign personally against the Indian Prime Minister Narendra Modi and his government more than a year back making allegations of corrupt practices in the Rafale Fighter jets deal signed with the French government in September 2016. After taking its toll in the recent assembly elections in few statres, this campaign reached an anticlimax on 14 December 2018 when the Supreme Court of India in a landmark judgment cleared the "Rafale Deal" of all charges.

The principal political party in opposition, in a big hurry to get back its lost fiefdom and electorate, resorted to trading charges and allegations in the Rafale deal concluded in September 2016 at the inter-governmental level personally against the prime minister over a year back despite the latter’s unblemished record of personal integrity and fiscal discipline in his long political career as the Chief Minister of Gujarat and, now, as the Prime Minister at the Centre. Emboldened with the success of the fake news and disinformation at the crucial election time, a fresh barrage of allegations has, however, been levied by the opposition party President despite the clean chit given by the 3-judges bench headed by the Chief Justice of India (CJI).

Attempts were also made by the principal opposition and Modi-baiters to derive a parallel between the Bofors Scam of late nineteen-eighties and the current Rafale deal though the main difference remains that the former scam was unearthed by the then ruling Congress Defence Minister Vishwanath Pratap Singh, a man of known honesty and integrity, who was later discredited from the party as punishment for exposing the scam, while the alleged Rafale scam is the product of the fertile minds and wishful imagination of some detractors and the main opposition party out to derive political mileage during the crucial election time taking advantage of the vicious reporting of some anti-government elements in the electronic and print media.

When the allegations of corruption were levied in 2017 against the inter-governmental Rafale deal of 2016 for the supply of 36 fighter aircrafts to meet the urgent operational requirements of the Indian Air Force, in terms of over-pricing, procedural violations, technology and commercial favourism (cronyism), several blogs and articles came in media and press in favour and against the deal perplexing the psyche of the large Indian populace for months together. With a view to find truth, this author too made an in-depth study and analysis of all related issues and contributed a comprehensive article on the subject in August 2018. The author now notes with satisfaction that the judgment delivered on 14 December by the Supreme Court has vindicated the analysis and inferences drawn by him earlier.

Writ Petitions and Verdict

The principal opposition party on many occasions in the past disrupted parliamentary proceedings to demand a Joint Parliamentary Committee (JPC) to probe the Rafale deal besides also making noise for the CBI investigation. As the move lacked any material evidence or lead justifying such probe, the joint attempts of detractors and opposition party were not successful. Consequently, four writ petitions were filed in the Supreme Court a few months back by different people in the form of the public interest litigations (PILs). The Apex court has recorded in their judgment that these petitions were examined by them under the Article 32 of Constitution which provides the right to citizens to move the Court for the Constitutional remedies provided under the fundamental rights.

The first petition was filed by one ML Sharma, an independent lawyer, a compulsive petitioner and ill-famed defence counsel of the accused in the famous 2012 Nirbhaya Gang Rape case, seeking appointment of a Special Investigation Team (SIT) monitored by the Supreme Court and quashing the Inter-Governmental Agreement of 2016 for the purchase of 36 Rafale Jets. The second petition was filed by one Vineet Dhanda, claiming to be a public spirited man, allegedly based on the newspaper article/reports. The third petition related to Sanjay Singh, Member of Parliament, mainly alleging illegality and lack of transparency in procurement. The fourth petition was filed by two disgruntled veteran politicians and a compulsive lawyer-cum-activist again claiming to be "public spirited Indians" aggrieved by non-registration of FIR by the CBI pursuant to a complaint made by them. This author has consciously used the term ‘compulsive’ because the gentlemen are known for frequently resorting to filing PILs in courts mostly on charges found not sustainable in judicial review.

While the bonafides of the third and fourth petitioners and their political background is well known, the first two claim to be independent spirited men but it is well known fact in the Indian politics how the political parties move courts by “proxy petitioners” without identifying themselves as party. It offers them the comfort and liberty to later refute or register disagreement with the outcome of the judicial review. The Apex Court after hearing the petitioners and government reply including the price details of the fighter jet given in a sealed cover delivered their judgment on 14 December 2018. Briefly, the judgment says that the Court has not found any reason to doubt the procurement process, there is no need to probe the pricing of the deal, no commercial favourism has been made by the government to any party, the necessity and quality of the fighter aircraft is beyond doubt and the Indian Air Force cannot afford to be unprepared in the prevailing security scenario in the sub-continent. Besides, the Court has categorically used rather harsh words against the petitioners by recording that the “perception of individuals cannot be basis of fishing and roving inquiry”. The last para 34 of the judgment reads as under:

“In view of our findings on all the three aspects, and having heard the matter in detail, we find no reason for any intervention by this Court on the sensitive issue of purchase of 36 defence aircrafts by the Indian Government. Perception of individuals cannot be the basis of a fishing and roving enquiry by this Court, especially in such matters. We, thus, dismiss all the writ petitions, leaving it to the parties to bear their own costs. We, however, make it clear that our views as above are primarily from the standpoint of the exercise of the jurisdiction under Article 32 of the Constitution of India which has been invoked in the present group of cases.”

Scope and Extent of the Judicial Review

In their judicial review, the Apex Court has examined the whole issue from the points of view of the decision making process to look into the compliances of the laid down procedure, pricing details of the aircraft in the light of the claims/allegations of over-pricing of the deal and offset issues to see if any commercial favourism has been done in the process. In addition, the Apex Court has also commented on the need and quality of the fighter aircraft. Incidentally, these issues were also examined by the author in his article “Indian Rafale Deal: Ignorance is Bliss!” in August 2018.

(1) Decision Making Process

In their twenty-nine page judgment para 16 to 23, the apex court has examined the decision making process of the Government of India in the context of the Rafale deal. The judgment has quoted important provisions of the Defence Procurement Procedure (DPP) 2002 as revised from time to time, various milestones during the procurement, the reasons why the earlier process was deadlocked,10 April 2015 joint statement of the Indian Prime Minister and French President regarding purchase of 36 Rafales in fly-away condition and subsequent procedural milestones including the approvals of the Defence Acquisition Council (DAC) and Cabinet Committee on Security (CCS). The Court has not found any flaw in the decision making process as against the repeated allegation by the leaders of the Congress party in the press and public forums that even the Defence Minister was kept in dark and the decision was solely taken by Prime Minister Modi.

Two points included in the judgment as the main reasons for the deadlock with the Dassault Aviation were: i) Man-hours that would be required to produce the aircraft in India: HAL required 2.7 times higher Man-hours compared to the French side for the manufacture of Rafale aircraft in India; and ii) Dassault Aviation as the seller was required to undertake necessary contractual obligation for 126 aircraft (18 direct fly-away and 108 aircraft manufactured in India) as per RFP requirements. Issues related to contractual obligation and responsibility for 108 aircraft manufactured in India could not be resolved.

Apart from examining the process, the Court had also interacted with the senior Air Force Officers who answered Court queries in respect of different aspects, including that of the acquisition process and pricing. The Court recorded their satisfaction that there was no occasion to doubt the process, and even if minor deviations have occurred, that would not result in either setting aside the contract or requiring a detailed scrutiny by the Court. Para 23 of the judgment reads as under:

“We may also note that the process was concluded for 36 Rafale fighter jet aircrafts on 23rd September, 2016. Nothing was called into question, then. It is only taking advantage of the statement by the exPresident 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.”

It may be relevant to mention here that the ex-President of France had made statement to a prodding journalist in a different context involving some conflict of interests and then he had quickly retracted from his statement too. The issue has time and again been clarified by the Dassault Aviation and French government that the OEM had complete liberty in selection of offset partners without pressure from any side. It is well known that French Dassault was in touch with Indian Reliance Company since 2012. Needless to add that the step by step development of the procurement process since June 2001, points on which the deal was stuck up, the initiative taken by the Indian Prime Minister at the request of Air Force in April 2015 and subsequent signing of the inter-governmental agreement in September 2016 after following the due procedure was detailed by this author too in his August 2018 article. Following two paragraphs are relevant from the section “MMRCA – A Synopsis” of the ibid article.

“…At this juncture the Indian Prime Minister took over the mantle of leadership to resolve the deadlock even though hard and bold decisions were required. During his France visit in April 2015, in the joint press statement of Prime Minister Narendra Modi and President François Hollande on 10 April, the Indian Prime Minister declared that India will purchase 36 Rafales directly from France and the contract to this effect shall be sealed soon. On 31 July 2015, the Defence Minister too gave a statement in the Upper House of Parliament that the ongoing process for 126 MMRCA was officially withdrawn by the government.

This followed negotiations and understanding with the French government at the officials’ level for about a year on the subject. During this period, the approval of the Defence Acquisition Council (DAC), inter-ministerial consultations and approval of the Cabinet Committee on Security (CCS) was taken with due process. Finally, on 23 September 2016, Indian Defence Minister Manohar Parrikar and his French counterpart Jean-Yves Le Drian signed an inter-governmental agreement (IGA) for the purchase of 36 off-the-shelf Rafales in a deal worth €7.8 billion with an option for 18 more at the same inflation-adjusted price. The first Rafales under the agreement are expected to be delivered by late 2019, and entire delivery will be completed within the next six years. The comprehensive deal includes aircraft, associated equipment and weapon systems, India-specific adds-on, spares, training, logistics and maintenance.”

(2) Pricing

Paras 24 to 26 of the judgment deal with the pricing of the fighter jets. It has been recorded that the pricing of the aircrafts was challenged by the petitioners on the ground of the huge escalation based on material available in the public domain i.e. magazines and newspapers, and that the Court had sought cost details in a sealed cover to satisfy their conscience. Among other aspects regarding the sensitivity of the cost vis-à-vis security, it is mentioned that the pricing details have been shared with the Comptroller and Auditor General (CAG) and the report of the CAG i.e. the Statutory Auditor has been examined by the Public Accounts Committee (PAC). There is something amiss in this part which may have occurred due to typo or misinterpretation.

As the leader of the opposition heads the PAC, he has promptly denied receipt of the CAG report by the PAC making allegations on the government for misleading the Court. On their part, the Government too has promptly moved an application to the Court to rectify the typographical error in the judgment. As it appears, the pricing details were rendered by the government to the CAG which has not finalized its report as yet. As per procedure, the CAG is required to prepare its audit report(s) on the government accounts as also other subjects specifically chosen and such reports are then laid in the Parliament before being made available to the PAC and public domain. The Apex Court has, however, made following final remarks on pricing in their judgment:

“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 as well as under the IGA. We have also gone through the explanatory note on the costing, item wise. Suffice it to say that as per the price details, the official respondents claim there is a commercial advantage in the purchase of 36 Rafale aircrafts. The official respondents have claimed that there are certain better terms in IGA qua the maintenance and weapon package. It is certainly not the job of this Court to carry out a comparison of the pricing details in matters like the present. We say no more as the material has to be kept in a confidential domain.”

From the above, one gets a clear indication that the government has indeed shared full pricing details including cost comparison and item-wise details with the Court while asserting on its secrecy for security and other obligatory reasons under the two governments’ bilateral agreement. It is also pretty clear that the Court has not observed any discrepancy or gap regarding the alleged price escalation by the petitioners. While analyzing the indicative price details of various components as available in the public domain, this author had earlier pointed out that the exorbitant price quoted by the critics and detractors is on account of the misplaced comparison. While the government has shared the cost of the bare-bone aircraft, the critics and detractors are taking the cost of the aircraft in fly-away condition as came out in media that includes many other India-specific adds-on, weaponry and missile systems, spares and logistics/maintenance for a certain period.

Those who have some knowledge of the "dynamics of the Defence procurement and expenditure " worldwide would also know how the respective governments keep such details under wrap for the strategic reasons and India too is not an exception. In the past and even now, the Russia has been major and most dependable supplier of the defence equipment under inter-governmental route and any objections or allegations about it never surfaced up from any source during the past decades. The Rafale deal too is under government-to-government arrangement. On the other hand, almost every major defence deal from the Western private sources has been under controversy for opacity and corrupt practices under the erstwhile Congress governments. This author does not endorse opacity but is pretty well aware with his own experience in the Defence Sector that this culture is a product of the bureaucratic working evolved during long Congress governments' rule. An inter-governmental agreement rules out the intervention of the middlemen who are the main link and source of corruption and kickbacks in international deals and in Rafale deal there was no middleman.

(3) Offsets

Para 27 to 33 of the aforesaid judgment cover the relevant offset guidelines and procedure, averments of parties, role of the Indian government and vendor, analysis of the Court and final inference drawn. The Court has taken a note of the government position that any offset proposal regarding Indian Offset Partners (IOPs) has not been received so far from the vendor, that the OEM is free to select its offset partners as per the offset guidelines, and also that the Dassault Aviation has issued a press release stating that it has signed partnership agreements with several companies and is negotiating with over a hundred other companies.

The Court also took cognizance of the recent origin of the Reliance Aerostructure Ltd in a joint venture with the Dassault, and the press release suggesting that there was an arrangement between the parent Reliance company and Vendor starting from the year 2012. The Court has taken a view that what transpired between the two corporates would be a matter best left to them, being matters of their commercial interests, as perceived by them. As far as the role of HAL, insofar as the procurement of 36 aircrafts is concerned, there is no specific role envisaged. Here the Court has taken the cognizance of the contractual problems because of which Dassault was circumspect about HAL carrying out the contractual obligation, and which is also responsible for the non-conclusion of the earlier contract. Taking all related aspects of the offset issues, the Apex Court has reached the following conclusion:

“…Once again, it is neither appropriate nor within the experience of this Court to step into this arena of what is technically feasible or not. The point remains that DPP 2013 envisages that the vendor/OEM will choose its own IOPs. In this process, the role of the Government is not envisaged and, thus, 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. 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 does not rest with the Indian Government.”

In fact, this author has earlier noted and pointed out that the issues of the manufacture of 108 aircrafts in the HAL and the discharge of 50 percent offset obligation by the OEM as provided in tender documents were two entirely distinct and unlinked matters in the earlier contractual process that did not materialize. In fact, any role of the HAL in the discharge of the offset obligation was never envisaged, contrary to what the detractors and leaders of the opposition are erroneously or deliberately claiming. Quite obviously, due to lack of the in-depth knowledge and clear understanding of the technical and financial issues of the defence procurement procedure, not only politicians in the opposition but also the ruling party have frequently linked the offset issue with the HAL while debating the issue in media or press. This position was amply made clear in author’s previous article too in August 2018:

“The fact is the French side has committed about 30 percent for the military aerospace research and development programmes and the remaining 20 percent for the various components and spares for the said aircraft. By implication, this would mean that apart from the Reliance, the DRDO and several other big and small Indian companies would most likely get business opportunities during the next 4-5 years out of an estimated Euro 3 billion value. The main objective of the offset is to leverage capital acquisitions for the development of the indigenous defence industry and research.…People both politicians and others appear ignorant or at least pretending so when they sing merits of the HAL while levying charges of cronyism because the manufacture of aircraft in India and the discharge of offset obligations by the OEM are two distinct and unrelated activities.”

(4) Defence Preparedness and Quality of Aircraft

The above issues, per se, were not under the scrutiny of the Apex Court. However, in their landmark judgment, the Court also observed that the country cannot afford to be unprepared or underprepared in a situation where the adversaries are stated to have acquired not only fourth generation but even fifth generation aircraft, of which the country has none. It also said that there was no doubt about the need and quality of the Rafale jets. For instance, the Chengdu J-20 is a twinjet, all-weather stealth fifth-generation fighter aircraft reportedly already in service of the People's Liberation Army Airforce of China in Asia. These observations of the Court are important in the light of the fact that one of the petitions had also sought annulment of the inter-governmental agreement for the supply of 36 fighter jets.

Court Verdict and JPC

After the Apex Court dismissed the petitions, the government and ruling party has welcomed the verdict as the victory of truth. In a press conference, a senior minister dubbed the allegations on the Rafale deal as "fiction writing" impinging on the national security. In a veiled attack on those opposing the deal with the allegations of corruption, he said that the disrupters have lost on all counts and those who manufactured falsehood compromised the security of the country.

On the other hand, the principal opposition party put a question mark on the verdict and competency of the Supreme Court and later also claimed that the Court has vindicated its stand that the issue of "corruption" in the Rafale fighter jet agreement cannot be decided by it. It reiterated the demand and challenged the Centre to constitute JPC to probe the deal. According to them, only a JPC can probe and bring out the corruption in the deal. In fact, in a fiery speech during a press conference, the Party President called Prime Minister by name citing ‘the entire country knows, chowkidar chor hai’ and that ‘he may hide and run but won’t be saved the day there is an enquiry’. Emboldened with the recent success of his party in three state assembly elections, it was possibly an obvious threat hinting post-2019 Parliamentary election scenario.

There is an obvious reason why interested political parties always seek a JPC probe in contentious issues. Actually, JPC is constituted from amongst the Members of Parliament of both the houses with a proportional representation of the political parties. In such a forum, the members usually split on the predicted political line and any recommendation or outcome is seldom based on consensus but the political agenda and objective of the interested parties is largely achieved merely by the constitution of the Committee and dissenting voices of the members. When the apex judicial institution has impartially examined all aspects including pricing of the deal before delivering the verdict, such demand has no justification other than an attempt now to derive the political mileage and intended objective through the JPC route.

Words of Wisdom

While the aggression of the principal opposition party on the Rafale deal for the political reasons can be understood but questioning the authority and jurisdiction of the Supreme Court, attempts to misinterpret and exploit typo in the judgment and distancing itself from the judicial review and PILs - widely interpreted as proxy petitions, is indeed unethical and in bad taste suggesting a dangerous trend in the Indian politics and democracy. Of late, this trend has started that if a favourable judgment has not come, some political parties and people try to deny it and even criticize the apex judicial institution raising controversies. In the instant case, the principal opposition party has quoted the Supreme Court judgment as self-contradictory and shocking with factual inaccuracies (possibly it is a reference to a reported typo) and that the government's curative petition adds insult to the injury caused; hence the Apex Court should charge the government with the perjury and contempt of court. Raising questions on the competency and wisdom of the Apex Court suggest the concerned individual or party's lack of confidence and disregard to the institution.

In fact, any state investigation agency undertakes a case only if it is prima facie established that a civil dispute or criminal case has actually occurred and certainly not based on the perceptions of some individuals or mere report(s) in the media or press. Similarly, the verdict on any civil or criminal lawsuit in the court is based on the facts, records and evidences produced by the plantiff(s) and respondent(s). So the logic that a particular issue cannot be examined by the court has inherent defects and inconsistencies. Recently, the principal opposition party had also gone to the extent of moving a case in the Parliament to impeach the then Chief Justice of India. The other constitutional and statutory institutions in the country too are not spared. In the event of loss in elections, vicious allegations are made that the Electronic Voting Machines (EVMs) have been rigged and even the Election Commission has often been targeted with the allegation of favourism. Similar treatment is also meted out to the institutions like CAG, Vigilance Commission, some constitutional posts and Indian Army. If the institutions are not allowed to work independently and judiciously for the ephemeral selfish interests of the political parties, the time is not far when the people of India will lose their faith in the political system and democracy leading to anarchy and chaos.

The principal opposition party and its leader has continuously raised rhetoric against the Rafale deal calling the Prime Minister by name as "chor hai" (He is thief) without any cognizable evidence or lead. To some extent, the strategy has partially worked to their advantage in terms of recent electoral successes. Even the Supreme Court acknowledged the importance of the national security and that such issues need a more discreet and sensible approach but some political parties have no qualms about stretching things to any extent even jeopardizing national security so long it serves their political interests and ends. This is exactly what has happened in the case of Rafale deal. Political rivalry and consequent differences and criticism should be alright but ill-treating and demeaning the constitutional institutions and offices like CJI, President and Prime Minister of the country in the process is disgraceful and inexcusable. Similarly, to serve domestic political interests, the acts of compromising the national security and friendly relations with all-weather dependable allies like France too are political blunders and inexcusable acts. Such acts may earn temporary haul and cheer to some but none should remain in doubt that the people of India will realize the truth behind these uncanny games and punish such parties and people. The truth cannot be concealed or suppressed for long.

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