New Delhi: Chief Justice Ranjan Gogoi on Wednesday reserved the Supreme Court’s order on the Rafale deal after the central government refused to make pricing details public citing national security interests and questioned the court’s ability to judicially review the controversial purchase.
The Supreme Court would only delve into the pricing issue if it were made public, Gogoi said during the marathon four-hour hearing. The government, however, refused to do so.
“There are appropriate reasons why the price was not disclosed. The price disclosed in Parliament was the basic cost of the aircraft," attorney general K.K. Venugopal told the three-judge bench headed by Justice Gogoi. “The government cannot disclose the price of the loaded aircraft because we don’t want our adversaries to know," he said.
The court also questioned officials from the Indian Air Force (IAF) on the combat aircraft and the need to change the offset guidelines in 2015.
The government claimed it scrapped the original procurement deal for 126 aircraft with state-owned Hindustan Aeronautics Ltd (HAL) because of differences between HAL and the vendor, Dassault Aviation, the maker of Rafale, a twin-engine medium multi-role combat aircraft.
Petitioner and lawyer Prashant Bhushan opposed this and also challenged the government’s stand that it did it not know who the offset partner was for Dassault at the time of finalizing the deal.
Bhushan argued that the government’s stand was unsustainable because the defence procurement procedure (DPP) says that all proposals for offset contracts need to be approved by the defence minister.
Bhushan also questioned how the government’s decision to procure 126 aircraft was changed to 36, calling it a “gross violation of procedure".
“How did the Prime Minister announce the new decision in a joint statement? On what basis did he do that? He had no authority to do that," he remarked.
Bhusan said it was clear that Reliance Infrastructure Ltd was chosen as the offset at the insistence of the Indian government and that this was a legitimate matter for investigation.
On 12 November, the centre justified the decision-making process and choice of offset partner in detail saying it had followed the process set out in the DPP of 2013. Pricing details were, however, submitted to the court in a sealed cover.
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The apex court was on Tuesday hearing a batch of petitions seeking a stay on the ₹ 59,000 crore Rafale deal, signed between India and France in 2016.
The pleas included one by former finance minister Yashwant Sinha seeking a court-monitored investigation to ensure an “independent, robust, and fair investigation, free from the influence of the powerful people involved".
Anil Ambani-led Reliance Infrastructure Ltd has a 51:49 joint venture with Dassault called Dassault Reliance Aerospace Ltd (DRAL), which has an offset contract of about ₹ 30,000 crore for 36 Rafale aircraft.
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Prime Minister Narendra Modi announced India’s decision to buy the 36 jets off the shelf in a government-to-government agreement during his visit to France in April 2015, cancelling the Congress-led United Progressive Alliance government’s 2012 decision to buy 18 Rafale jets in a fly-away condition and manufacture 108 in India. The delivery of the jets is slated to begin in September 2019.
Under India’s offset policy, foreign defence entities have to spend at least 30% of the total contract value in India by procuring components or setting up research and development facilities. The offset clause for the Rafale deal was set at 50%.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.