The Supreme Court on Friday provided a major relief to the Modi Government by dismissing the demand for a court-monitored CBI probe into the Government-to-Government deal with France for the purchase of 36 Rafale fighter jets, saying there is no occasion to “really doubt the decision-making process” warranting setting aside of the contract.
A Bench headed by Chief Justice Ranjan Gogoi went into “three broad areas of concern” raised in the petitions — the decisionmaking process, pricing and the choice of Indian offset partners — and said there was no reason for intervention by the apex court on the “sensitive issue” of purchase of 36 fighter jets.
The apex court said the Indian Air Force (IAF) needs advanced fighter jets as the country cannot afford to be “unprepared” or “under prepared” in a situation where adversaries have acquired fourth and fifth generation fighter aircraft, “of which, we have none”.
“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 aircraft by the Indian Government,” the Bench, also comprising Justices SK Kaul and KM Joseph, said in its 29-page judgment.
Attorney General KK Venugopal welcomed the verdict terming it as an “excellent” and “very good” judgment, which in his opinion has given “clean chit” to the Government by accepting all its arguments.
“I think a clean chit has been given to the Government on Rafale deal,” he told reporters on the sidelines of a function to give farewell to Justice Madan B Lokur, who is set to retire on December 30.
The court said perception of individuals cannot be the basis of a “fishing and roving enquiry” by the court in such matters and it cannot “sit in judgment” over the wisdom of Government’s decision to go in for purchase of 36 aircraft in place of 126.
“We are satisfied that there is no occasion to really 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,” the Bench said.
It noted that process for procurement of 36 Rafale jets was concluded on September 23, 2016 and no questions were raised at that time and the petitions were later filed after reported statement of former French President Francois Hollande with regard to selection of Indian offset partners.
The Bench said it was “certainly not the job of this court to carry out a comparison of the pricing details in matters like the present” and the material has to be kept in a confidential domain.
On the offset partner, the Bench noted that this issue had “triggered” the litigation as petitioners had alleged that the Government gave a benefit to Reliance Aerostructure Ltd by compelling Dassault Aviation to enter into a contract with them at the cost of public enterprise, Hindustan Aeronautics Ltd (HAL).
“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 partners) does not rest with the Indian Government,” it said, adding that it is neither appropriate nor within the experience of the court to step into this arena of what is technically feasible or not.
It said “mere press interviews or suggestions” cannot form the basis for judicial review by the court, especially when there was categorical denial of the statements made in the press by both the sides.
It said in June 2001, an in-principle approval was granted to procure 126 fighter jets and on June 29, 2007, the Defence Acquisition Council granted “acceptance of necessity” for procurement of 126 Medium Multi Role Combat Aircrafts (MMRCA).
The Bench noted that commercial bids for 126 jets were opened in November 2011 and later, negotiations commenced with Dassault Aviation. On April 10, 2015 an Indo-French joint statement for acquisition of 36 Rafale jets in fly-away condition through an IGA was issued and later, in June 2015, the request for proposal (RFP) for 126 MMRCA was finally withdrawn.
It said the court was informed that contract negotiations for procuring 126 fighter jets could not be concluded due to “unresolved issues” for over three years between the OEM and HAL.
“The need for the aircrafts 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,” it said.
It also added, “We cannot possibly compel the Government to go in for purchase of 126 aircraft” and it would not be correct for the court to sit as an “apellate authority” to scrutinise each aspect of the process of acquisition.
Former Union Ministers Yashwant Sinha and Arun Shourie, along with activist advocate Prashant Bhushan, had moved the apex court with a plea for a direction to the CBI to register an FIR for alleged irregularities in the deal. Before them advocates M L Sharma and Vineet Dhanda and AAP leader Sanjay Singh had also filed pleas.
The court also said it cannot seek clause-by-clause compliances of Defence Procurement Procedures (DPP) in the Rafale fighter jet deal and opined that the processes have been “broadly” followed. It also expressed satisfaction with the Government’s decision-making process which led to the deal between India and France for procurement of 36 Rafale jets, saying there was “no occasion to really doubt” it.
The top court dismissed the key allegation that the Government changed the deal and decided to procure 36 Rafale fighter jets instead of 126. It said, “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 Medium Multi-Role Combat Aircraft (MMRCA) 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 aircrafts in place of 126.”
The top court said it cannot “possibly” compel the Government to go in for purchase of 126 aircrafts. “Our country cannot afford to be unprepared/under-prepared in a situation where our adversaries are stated to have acquired not only 4th generation, but even 5th generation aircrafts, of which, we have none. It will not be correct for the court to sit as an appellate authority to scrutinise each aspect of the process of acquisition,” it said.
The Bench also took note of the reasons, including unresolved issues between Dassault Aviation and Hindustan Aeronautics Limited, which had led to annulment of earlier deal for procurement of 126 Rafale jets.
“Manhours that would be required to produce the aircraft in India: HAL required 2.7 times higher manhours compared to the French side for the manufacture of Rafale aircraft in India,” it noted, adding “issues related to contractual obligation and responsibility for 108 aircraft manufactured in India could not be resolved.”
Indian Negotiating Team (INT) held as many as 74 meetings, including 48 internal and 26 external INT meetings with the French side, it said. “It is the case of the official respondents that the INT completed its negotiations and arrived at better terms relating to price, delivery and maintenance, as compared to the MMRCA offer of Dassault. This was further processed for inter-ministerial consultations and the approval of the CCS was also obtained, finally, resulting in signing of the agreement. This was in conformity with the process, as per...DPP 2013,” it said.