No debate on Rafale price if it’s not made public: SC

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No debate on Rafale price if it’s not made public: SC

Thursday, 15 November 2018 | PNS | New Delhi

No debate on Rafale price if it’s not made public: SC

The Supreme Court on Wednesday said there is no question of a debate on the pricing of the Rafale fighter deal in the court till it comes to the conclusion that the pricing information is to be brought in the public domain. 

The court reserved its order on pleas seeking court monitored probe in procurement of 36 Rafale fighter jets.  The Government refused to make public details related to the pricing of the 36 Rafale fighter jets in the Supreme Court, saying “our adversaries may get an advantage” by such a disclosure. 

A Bench comprising Chief Justice Ranjan Gogoi and Justices SK Kaul and KM Joseph concluded in nearly four hours the arguments advanced by various parties which have also sought registration of FIR in connection with the alleged irregularities in the deal. 

India had signed a Government to Government contract with France in 2016 worth over Rs 59,000 crore to buy 36 fighter Rafale jets in the fly-away condition.

The apex court also said it is dealing with the requirements of the Indian Air Force and would like to hear from an Air Force officer and “not the official of the Defence Ministry.”

Deputy Chief of Air staff Air Marshal VR Chaudhari and two other officers from Indian Air Force appeared in the Supreme Court on Wednesday to assist it on the issue of the procurement. They told the court that no new aircraft has been inducted in the Air Force since 1985.

On price issue, the SC said, “The decision we need to take is whether to bring the fact on pricing in public domain or not.”

The Bench, also comprising Justices SK Kaul and KM Joseph, told Attorney General KK Venugopal that there is no question of any debate on pricing without making the facts public. The Bench clarified that any discussion on price will be considered if it thinks the issue should enter the public domain. Venugopal defended the secrecy clause relating to the pricing of the Rafale jets, saying adversaries may get an advantage if the entire details are disclosed.  Refraining to divulge details on the pricing aspect, he said he would not be able to assist the court further on the pricing issue. 

“I decided not to peruse it myself as in a case of any leak, my office would be held responsible,” Venugopal said.  The Bench then told him there is no question of any debate on pricing without making the facts public. 

He also said these matters are for experts to deal with. “We have been saying that even Parliament has not been told about the complete cost of the jets,” he said. At the exchange rate of November 2016, the cost of a fighter jet was Rs 670 crore, he said.

The top law officer said the Centre has given in a sealed cover the complete details of the Rafale jets, the weapons to be fitted on the aircraft and other requirements. The Centre on Monday had submitted to the apex court in a sealed cover, the pricing details of the Rafale jets.  Venugopal also told the apex court that the court is judicially not competent to decide what aircraft and weapons are to be bought as it is a matter for experts.

Venugopal said earlier jets were not intended to be loaded with the requisite weapons system and the government had reservations as it did not want to violate the Inter Government Agreement (IGA) and the secrecy clause.

He also opposed advocate Prashant Bhushan who wanted to submit information on the secrecy clause of the Rafale agreement.  “Secrecy agreement has to be secret and how is he producing it in court?” Venugopal asked when Bhushan raised the issue.

Bhushan, appearing on behalf of himself and former Union Ministers Yashwant Sinha and Arun Shourie, alleged that the Government is hiding behind the secrecy clause and had not disclosed the price of the fighter jets. The Chief Justice told Bhushan, “We are giving you full hearing. Use this opportunity carefully and cite only those things which are necessary.”

Bhushan said the price per aircraft was 155 million Euros and was now 270 million Euros. This shows that there was hike of 40 per cent in its price, the advocate said.  He said the CBI was bound to register an FIR in this case.  The lawyer alleged that there was a conspiracy with French company Dassault, which tied up with Reliance as an offset partner. He said Reliance had no competence in executing the offset contract. 

Bhushan said they filed the petition after the CBI did not register the FIR under the Prevention of Corruption Act.  He also quoted former French president François Hollande and other Dassault officials to impute criminal motives in granting the offset contract to Reliance.

The activist-lawyer submitted that the NDA Government had “short circuited” the acquisition process by taking the IGA route.  He said there is no sovereign guarantee from the French Government in the deal and argued that the Union Law Ministry initially flagged the issue and later gave in to the proposal of entering into an IGA.

On the issue of lack of sovereign guarantee, the attorney general said though there is no sovereign guarantee, but there is a letter of comfort by France which would be as good as a governmental guarantee.  He also told the court that presently three countries France, Egypt and Qatar are flying Rafale fighter jets.

Bhushan said six foreign companies had applied and two firms were shortlisted during the earlier process, Bhushan said.  Later, the deal went to Dassault and State-owned Hindustan Aeronautics Ltd (HAL) was part of it. Suddenly, however, a statement was issued which said there will be no technology transfer, and only 36 jets would be procured, the lawyer told the court. 

Bhushan submitted that nobody knows about the alleged change in the deal done by the Prime Minister. Even the Defence Minister was not aware about the change, he said.

The Supreme Court questioned the Government’s stance that it had no role in the offset clause, which is the focal point of the opposition’s charge of corruption in the 59,000 crore contract.  Rafale manufacturer Dassault has not yet submitted details of its offset partner to the Government, Venugopal told the Supreme Court. “The vendor will inform the offset partner to us. So far there is no information on this,” said Additional Secretary Defence Apurva Chandra.

The court had asked the defence ministry why the offset guidelines were changed in 2015.  The opposition alleges that the Government scrapped a deal for 126 Rafale jets negotiated by the previous UPA Government and opted for a new deal for 36 jets to help Reliance bag the offset contract with Dassault.

When the court asked about the change in the offset guidelines in 2015, the Additional Secretary of the Defence Ministry explained that the offset contract runs concurrently with the main contract.

During arguments in court, the Government said a political issue was being made out of the offset partner. “We have already said the government has no role in the selection of the offset partner,” said the top Government lawyer.

Justice KM Joseph questioned, “If the offset partner runs off, what happens? What about the country’s interest? What if the offset partner doesn’t do any production?”  The court said the Government “can’t separate” the main contract from the offset contract. “It may not be in the country’s interest if the offset contract is executed later because that may lead to delay in production by the offset partner,” the court said.

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