Supreme Court Puts Rafale Controversy to Rest

By: Parmanand Pandey, Advocate, Supreme Court (Secretary General, IPC) Rafale Fighter Jets deal case, decided by the Supreme Court, on 14th December, the last working day before it was closed for the winter vacation has actually brought a sort of political tremor in the country. While on the one hand, the people of the country, by and large, and the Indian Air Force heaved the sigh of relief that the deal with the French Dassault company for the supply of the Rafale Fighter Jets has improved its fighting capacity. Another reason for the satisfaction has been that the security of the country has not at all been compromised. On the other hand, however, it has sent some political parties into a tizzy, who wanted to make capital out of this deal. This judgement of the Supreme Court has unequivocally vindicated the stand of the government, particularly of the Prime Minister Narendra Modi, that his government has acted above board. The government can also take pride that it has kept itself free from scams and scandals. There is no place for hanky-panky, the government can boast of, in its defence dealings. It will be interesting to know that before the Rafale controversy, the issue of Bofors Guns had rattled the government of the Late Shri Rajiv Gandhi in the eighties. Although nobody had expressed any doubts over the quality of the Bofors Guns, which later proved its efficacy and excellence in the Kargil war, yet the allegations of underhand bribe payments to some influential persons in the government or having close links with the government proved disastrous for the Rajiv Gandhi government, which lost power in the hustings of 1989 general elections for the Lok Sabha. The conspectus of the Rafale case is that as far  back as in  the  month  of  June  of  the year 2001, an in­-principle approval was granted for procurement of 126 fighter-­jets to augment the strength of the Indian Airforce. Simultaneously, a more transparent Defence Procurement Procedure (DPP) was formulated for the first time in the year 2002. A robust ‘offset clause’ was included in the DPP in the year 2005 so as to promote Indigenisation and to that effect Services Qualitative Requirements (SQRs) were prepared in June 2006. On 29th June 2007 the Defence Acquisition Council (DAC) granted the “Acceptance of Necessity” for the procurement of 126 Medium Multi-Role Combat Aircrafts (MMRCA) including 18 direct fly­away aircrafts (equivalent  to  a  single  squadron) to be procured from the Original Equipment Manufacturer (OEM) with the remaining 108 aircrafts to be manufactured by Hindustan Aeronautics Limited (HAL) under licence, to be delivered over a period of 11 years from the date of signing. The bidding process commenced in August 2007. Six vendors submitted proposals in April 2008. The proposals were followed by technical and field evaluations; a Staff Evaluation Report and a Technical Oversight Committee Report. All these were completed in the year 2011. The commercial bids were opened in November 2011 and M/s Dassault Aviation was chosen sometime in January 2012. Negotiations commenced thereafter and continued but without any final result. In the meantime, there was a change of political dispensation at the centre sometime in the middle of the year 2014. A process of withdrawal of the Request for Proposal in relation to the 126 fighter jets was initiated in March 2015. On 10th April 2015 an Indo-­French joint statement, for the acquisition of 36 Rafale Jets in fly ­away condition through an Inter-Governmental Agreement was issued and the same was duly approved by the Defence Acquisition Council. The Request for Proposal for the 126 fighter jets was finally withdrawn in June 2015. Negotiations were again carried out and the process was completed after Inter­-Ministerial Consultations with the approval of the Cabinet Committee on Security. The contract along with Aircraft Package Supply Protocol; Weapons Package Supply Protocol; Technical Arrangements and Offset contracts was signed in respect of 36 Rafale Jets on 23rd September 2016. The aircraft were scheduled to be delivered in phased manner commencing  from  October  2019. Things remained quiet until sometime in the month of September 2018 when certain newspapers reported a statement claimed to have been made by the former President of France, Francois Hollande, to the effect that the French Government were left with no choice in the matter of selection of Indian Offset Partners and the name of Reliance Group was suggested by the Government of India. This triggered the controversy resulting into the filing of the clutch of the writ petitions, civil as well as criminal both, seeking registration of the FIR against the Prime Minister Narendra Modi and quashing of the purchase of 36 Rafale Jets. The judgement, of the three-judge bench comprising the CJI Ranjan Gogoi and the Justices Sanjay Kishan Kaul and K M Joseph, was written by the Chief Justice of India, said that, ‘adequate military strength and capability to discourage and withstand external aggression and to protect the sovereignty and integrity of India, is a matter of utmost concern for the nation. The empowerment of defence forces with adequate technology and material support is, therefore, a matter  of  vital  importance.  Keeping in view the above, it would be appropriate, at the outset, to set out the parameters of judicial scrutiny of governmental decisions relating to defence procurement and to indicate whether such parameters are more constricted than what the jurisprudence of judicial scrutiny of award of tenders and contracts, that has emerged till date, would legitimately permit.’ The verdict clarified that in such matters the Courts can only interfere when it is found that when there appears to be mala fide and blatant favouritism. The Court further said that ‘in matters of contracts, procurement, etc. would vary with the subject matter and there cannot be any uniform standard or depth of judicial review which could be understood as an across the board principle to apply to all cases of the award of work or procurement of goods/material. The scrutiny of the challenges before the Court, therefore, will have to be made keeping in mind the confines of national security, the subject of the procurement is crucial to the nation’s sovereignty. Significantly, the writ petitions have not questioned the suitability of the fighter jets and its utility to the Indian Airforce. Rather what was doubted was the bona fides of the decision-making process and the price/cost of the equipment. The Apex Court observed that defence procurement involves long gestation periods and delay in procurement will certainly impact the preparedness of our forces. The needs of the armed forces are non-negotiable and uncompromising aspects. Therefore, flexibility in the procurement process is required, which has also been provisioned for in the procedure. The Court said that delays impact the cost of acquisition, as the offer was with ‘in-built escalation’ and was influenced by Euro-Rupee exchange rate variations. The Supreme Court, in fact, gave a clean chit to the government by saying that, ‘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, and even if minor deviations have occurred, that would not result in either setting aside the contract  or requiring detailed scrutiny by the Court.’ Most importantly,  the Supreme Court observed that ‘we cannot sit in judgment over the wisdom of deciding to go in for the purchase of 36 aircraft in place of 126. We cannot possibly compel the Government to go in for the purchase of 126 aircraft. This is despite the fact that even before the withdrawal of Rafale Fighter Planes (RFP), an announcement came to be made in April 2015 about the decision to go in only for 36 aircraft. 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 Aircrafts, of which, we have none and hence, it will not be correct for the Court to sit as an appellate authority to scrutinize each aspect of the process of acquisition. The observation of the Court that the pricing details have been shared with the Comptroller and Auditor General and the report of the CAG has been examined by the Public Accounts Committee has, however, left the controversy simmering because the Chairman of the Public Accounts Committee, Mallikarjun Kharge has been saying all along that the government has lied to the Supreme Court as the pricing details were never placed before the Committee. The Court has taken such people to task, who do not go by facts but by perceptions. It said that perception of individuals cannot be the basis of a fishing and roving enquiry by this Court, especially in such matters. Nevertheless, the controversy does not seem to die down with regard to the pricing of the Rafale Jet fighters despite the unequivocal assertion of the Court such matters are very sensitive to the security of the country.