Day 3 Arguments: 14th November 2018

On Wednesday 14.11.2018, a 3 Judge Bench of the Supreme Court substantially heard the petitions seeking a judicial probe into the Rafale Fighter Jets Deal. The Court had earlier asked the Central Government to submit records of the process adopted for finalisation as well as the pricing details of the Rafale Jets and the same had been submitted to the Court in sealed cover. 

 

Pointing to the procedral irregularities in the case, Mr. M L Sharma submitted that the Rafale deal was a serious fraud by the government. He further requested that the government filed a detailed response explaining how the announcement of the deal and the joint statement issued by the French & Indian Prime Minister could have been made almost a year prior to its approval by the Cabinet in March 2016. The petitioner further alleged that had already been finalised before seeking approvals from the Defence Acquisition Council as well the Cabinet Committee on Security and requested that the Attorney General submit a clarification of this aspect. The Petitioners further requested that the question whether the Indian Governement can enter into such contracts must be referred to a Constitution Bench.

 

In the Petition filed by Mr. Sanjay Singh, AAP Member of Parliment in the Rajya Sabha, it was contended that the arguments presented by the Government for the last minute revision of the deal were logically inconsistent. As of  Marcg 2015, the deal between Dassault and HAL was in the stages of finalisation, when at the last stage the terms of the deal were significantly altered and Relaince was inrtoduced as the Offset partner. Further, the earlier number of 126 Rafale Jets was reduced to 36 which is contrary tp te argument of the Government of India that the changes in the deal were made to augment combat potential. It was also argued that the documents placed on record by the Government did not address whether proper procedure had been followed at every stage of finalising the new deal for 36 jets announced in April 2015. With respect to pricing details being, Mr. Sanjay Singh’a council submitted that the price has been revealed twice in parliament and could therefore be placed on record publicly in the Court. He further requested the Court for additional time to file a detailed response to the documents submitted by the Government. 

 

Mr. Prashant Bhushan argued next, appearing for Mr Yashwant Sinha. He submitted a rejoinder to the document filed by the Central Government. Mr. Bhushan presented his arguments on primarily 3 aspects. He first dealt with the Centre's submission that the Indian Government did not have any role in the selection of the Indian Offset Partner as this was solely within the domain of the vendor, i.e. Dassault. Referring to the offset guidelines under the Defence Procurement Policy of 2013, Mr. Bhushan submitted that the argument of the Government that Dassault could be permitted to select the offset partner without seeking prior approval from the Ministry of Defence could not be accepted as severals clauses in the guidelines required to the contrary. Mr. Bhushan further highlighted that a hasty retrpspective amendment to clause 8.2 of the guidelines could not ovveride the requirement under several other clauses of submitting all proposals for offset contracts to the Defence Minsitry. 

 

Secondly, making his submissions on the procedure adopted in the Rafale deal, Mr. Bhushan referred to the sequence of events beginning from 2007 when the Request for proposal for 126 Rafale Jets was first submitted by the Indian Government. He argued that the Rafale deal did not meet the three conditions of an intergovernmental agreement and it was an attempt by the government to short circuit the poper procedure by adopting the intergivernmental agrrement route and ommitting the requirement for inviting bids and tenders. The government had failed to provide a satisfactory explanation as to what compelling cirumatnces has warranted their actions of entering into an intergovernmental agrrement as ooposed to adopting the standar procedure for Defence procurement deals as per the policy. 

 

On the question of pricing and the details of the same being revelaed, Mr. Bhushan requested permission to refer to ceratin clauses of the Secrecy Agreement stating that only such information which has a certain level of security was to be kept confidential. Despite Attorney General K K Venugopal's objection to his request, Mr. Bhushan submitted that the pricing details having been revealed twice in parliamnet and hence were not a matter of national secrecy and must therefore be discussed to address why there was an almost 40% increase in the pricing in the new deal.