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India: Rafale Deal Truth Unravelled


by Dr. Jaipal Singh





There is a popular proverb “Aliar has no legs to stand upon” which essentially implies that the falsehoodcannot stand truth for long but what if it has wings instead because then it isfar more swift and versatile to escalate untruth and disinformation over alarge area and population without constraints of time and space.





This appears to be absolutely true in the context of the current Indian politics and some politicians. Based on a few half-baked stories in some Indian magazines is far, well known for their anti-government reporting, the top a large the Indian National Congress had started a systematic campaign personally against the Indian Prime Minister Narendra Modi and his government more than a year back making allegations of corrupt practices in the Rafale Fighter jets deal signed with the French government in September 2016. After taking its toll in the recent assembly elections in few states, this campaign reached an anticlimax on 14 December 2018 when the Supreme Court of India in a landmarkjudgment cleared the "Rafale Deal" of all charges.





The principal political party
in opposition, in a big hurry to get back its lost fiefdom and electorate,
resorted to trading charges and allegations in the Rafale deal concluded in
September 2016 at the inter-governmental level personally against the prime
minister over a year back despite the latter’s unblemished record of personal
integrity and fiscal discipline in his long political career as the Chief
Minister of Gujarat and, now, as the Prime Minister at the Centre. Emboldened
with the success of the fake news and disinformation at the crucial election
time, a fresh barrage of allegations has, however, been levied by the
opposition party President despite the clean chit given by the 3-judges bench
headed by the Chief Justice of India (CJI).





Attempts were also made by the
principal opposition and Modi-baiters to derive a parallel between the Bofors
Scam of late nineteen-eighties and the current Rafale deal though the main
difference remains that the former scam was unearthed by the then ruling
Congress Defence Minister Vishwanath Pratap Singh, a man of known honesty and
integrity, who was later discredited from the party as punishment for exposing
the scam, while the alleged Rafale scam is the product of the fertile minds and
wishful imagination of some detractors and the main opposition party out to
derive political mileage during the crucial election time taking advantage of
the vicious reporting of some anti-government elements in the electronic and
print media.





When the allegations of
corruption were levied in 2017 against the inter-governmental Rafale deal of
2016 for the supply of 36 fighter aircrafts to meet the urgent operational
requirements of the Indian Air Force, in terms of over-pricing, procedural
violations, technology and commercial favourism (cronyism), several blogs and
articles came in media and press in favour and against the deal perplexing the
psyche of the large Indian populace for months together. With a view to find truth,
this author too made an in-depth study and analysis of all related issues and
contributed a comprehensive article on the subject in August 2018. The author
now notes with satisfaction that the judgment delivered on 14 December by the
Supreme Court has vindicated the analysis and inferences drawn by him earlier.





Writ Petitions and Verdict





The principal opposition party
on many occasions in the past disrupted parliamentary proceedings to demand a
Joint Parliamentary Committee (JPC) to probe the Rafale deal besides also
making noise for the CBI investigation. As the move lacked any material evidence
or lead justifying such probe, the joint attempts of detractors and opposition
party were not successful. Consequently, four writ petitions were filed in the
Supreme Court a few months back by different people in the form of the public
interest litigations (PILs). The Apex court has recorded in their judgment that
these petitions were examined by them under the Article 32 of Constitution
which provides the right to citizens to move the Court for the Constitutional
remedies provided under the fundamental rights.





The first petition was filed
by one ML Sharma, an independent lawyer, a compulsive petitioner and ill-famed
defence counsel of the accused in the famous 2012 Nirbhaya Gang Rape case,
seeking appointment of a Special Investigation Team (SIT) monitored by the
Supreme Court and quashing the Inter-Governmental Agreement of 2016 for the
purchase of 36 Rafale Jets. The second petition was filed by one Vineet Dhanda,
claiming to be a public spirited man, allegedly based on the newspaper
article/reports. The third petition related to Sanjay Singh, Member of
Parliament, mainly alleging illegality and lack of transparency in procurement.
The fourth petition was filed by two disgruntled veteran politicians and a
compulsive lawyer-cum-activist again claiming to be "public spirited
Indians" aggrieved by non-registration of FIR by the CBI pursuant to a
complaint made by them. This author has consciously used the term ‘compulsive’
because the gentlemen are known for frequently resorting to filing PILs in courts
mostly on charges found not sustainable in judicial review.





While the bonafides of the
third and fourth petitioners and their political background is well known, the
first two claim to be independent spirited men but it is well known fact in the
Indian politics how the political parties move courts by “proxy petitioners”
without identifying themselves as party. It offers them the comfort and liberty
to later refute or register disagreement with the outcome of the judicial
review. The Apex Court after hearing the petitioners and government reply
including the price details of the fighter jet given in a sealed cover
delivered their judgment on 14 December 2018. Briefly, the judgment says that
the Court has not found any reason to doubt the procurement process, there is
no need to probe the pricing of the deal, no commercial favourism has been made
by the government to any party, the necessity and quality of the fighter
aircraft is beyond doubt and the Indian Air Force cannot afford to be
unprepared in the prevailing security scenario in the sub-continent. Besides,
the Court has categorically used rather harsh words against the petitioners by
recording that the “perception of individuals cannot be basis of fishing and
roving inquiry”. The last para 34 of the judgment reads as under:





“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 aircrafts by the Indian Government. Perception of individuals cannot be
the basis of a fishing and roving enquiry by this Court, especially in such
matters. We, thus, dismiss all the writ petitions, leaving it to the parties to
bear their own costs. We, however, make it clear that our views as above are
primarily from the standpoint of the exercise of the jurisdiction under Article
32 of the Constitution of India which has been invoked in the present group of
cases.”





Scope and Extent of the Judicial Review





In their judicial review, the
Apex Court has examined the whole issue from the points of view of the decision
making process to look into the compliances of the laid down procedure, pricing
details of the aircraft in the light of the claims/allegations of over-pricing
of the deal and offset issues to see if any commercial favourism has been done
in the process. In addition, the Apex Court has also commented on the need and
quality of the fighter aircraft. Incidentally, these issues were also examined
by the author in his article “Indian Rafale Deal: Ignorance is Bliss!” in
August 2018.





(1) Decision Making Process





In their twenty-nine page
judgment para 16 to 23, the apex court has examined the decision making process
of the Government of India in the context of the Rafale deal. The judgment has
quoted important provisions of the Defence Procurement Procedure (DPP) 2002 as
revised from time to time, various milestones during the procurement, the
reasons why the earlier process was deadlocked,10 April 2015 joint statement of
the Indian Prime Minister and French President regarding purchase of 36 Rafales
in fly-away condition and subsequent procedural milestones including the
approvals of the Defence Acquisition Council (DAC) and Cabinet Committee on
Security (CCS). The Court has not found any flaw in the decision making process
as against the repeated allegation by the leaders of the Congress party in the
press and public forums that even the Defence Minister was kept in dark and the
decision was solely taken by Prime Minister Modi.





Two points included in the
judgment as the main reasons for the deadlock with the Dassault Aviation were:
i) Man-hours that would be required to produce the aircraft in India: HAL
required 2.7 times higher Man-hours compared to the French side for the
manufacture of Rafale aircraft in India; and ii) Dassault Aviation as the
seller was required to undertake necessary contractual obligation for 126
aircraft (18 direct fly-away and 108 aircraft manufactured in India) as per RFP
requirements. Issues related to contractual obligation and responsibility for
108 aircraft manufactured in India could not be resolved.





Apart from examining the
process, the Court had also interacted with the senior Air Force Officers who
answered Court queries in respect of different aspects, including that of the
acquisition process and pricing. The Court recorded their satisfaction that
there was no occasion to 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. Para 23 of the judgment reads as under:





“We may also note that the
process was concluded for 36 Rafale fighter jet aircrafts on 23rd September,
2016. Nothing was called into question, then. It is only taking advantage of
the statement by the exPresident of France, Francois Hollande that these set of
petitions have been filed, not only qua the aspect which formed the statement,
that is, the issue of IOPs but also with respect to the entire decision making
process and pricing. We do not consider it necessary to dwell further into this
issue or to seek clause by clause compliances.”





It may be relevant to mention
here that the ex-President of France had made statement to a prodding
journalist in a different context involving some conflict of interests and then
he had quickly retracted from his statement too. The issue has time and again
been clarified by the Dassault Aviation and French government that the OEM had
complete liberty in selection of offset partners without pressure from any
side. It is well known that French Dassault was in touch with Indian Reliance
Company since 2012. Needless to add that the step by step development of the
procurement process since June 2001, points on which the deal was stuck up, the
initiative taken by the Indian Prime Minister at the request of Air Force in
April 2015 and subsequent signing of the inter-governmental agreement in
September 2016 after following the due procedure was detailed by this author
too in his August 2018 article. Following two paragraphs are relevant from the
section “MMRCA – A Synopsis” of the ibid article.





“…At this juncture the Indian
Prime Minister took over the mantle of leadership to resolve the deadlock even
though hard and bold decisions were required. During his France visit in April
2015, in the joint press statement of Prime Minister Narendra Modi and
President François Hollande on 10 April, the Indian Prime Minister declared
that India will purchase 36 Rafales directly from France and the contract to
this effect shall be sealed soon. On 31 July 2015, the Defence Minister too
gave a statement in the Upper House of Parliament that the ongoing process for
126 MMRCA was officially withdrawn by the government.





This followed negotiations and
understanding with the French government at the officials’ level for about a
year on the subject. During this period, the approval of the Defence
Acquisition Council (DAC), inter-ministerial consultations and approval of the
Cabinet Committee on Security (CCS) was taken with due process. Finally, on 23
September 2016, Indian Defence Minister Manohar Parrikar and his French
counterpart Jean-Yves Le Drian signed an inter-governmental agreement (IGA) for
the purchase of 36 off-the-shelf Rafales in a deal worth €7.8 billion with an option
for 18 more at the same inflation-adjusted price. The first Rafales under the
agreement are expected to be delivered by late 2019, and entire delivery will
be completed within the next six years. The comprehensive deal includes
aircraft, associated equipment and weapon systems, India-specific adds-on,
spares, training, logistics and maintenance.”





(2) Pricing





Paras 24 to 26 of the judgment
deal with the pricing of the fighter jets. It has been recorded that the
pricing of the aircrafts was challenged by the petitioners on the ground of the
huge escalation based on material available in the public domain i.e. magazines
and newspapers, and that the Court had sought cost details in a sealed cover to
satisfy their conscience. Among other aspects regarding the sensitivity of the
cost vis-à-vis security, it is mentioned that the pricing details have been
shared with the Comptroller and Auditor General (CAG) and the report of the CAG
i.e. the Statutory Auditor has been examined by the Public Accounts Committee
(PAC). There is something amiss in this part which may have occurred due to
typo or misinterpretation.





As the leader of the
opposition heads the PAC, he has promptly denied receipt of the CAG report by
the PAC making allegations on the government for misleading the Court. On their
part, the Government too has promptly moved an application to the Court to
rectify the typographical error in the judgment. As it appears, the pricing
details were rendered by the government to the CAG which has not finalized its
report as yet. As per procedure, the CAG is required to prepare its audit
report(s) on the government accounts as also other subjects specifically chosen
and such reports are then laid in the Parliament before being made available to
the PAC and public domain. The Apex Court has, however, made following final
remarks on pricing in their judgment:





“We have examined closely the
price details and comparison of the prices of the basic aircraft along with
escalation costs as under the original RFP as well as under the IGA. We have
also gone through the explanatory note on the costing, item wise. Suffice it to
say that as per the price details, the official respondents claim there is a
commercial advantage in the purchase of 36 Rafale aircrafts. The official
respondents have claimed that there are certain better terms in IGA qua the
maintenance and weapon package. It is certainly not the job of this Court to
carry out a comparison of the pricing details in matters like the present. We
say no more as the material has to be kept in a confidential domain.”





From the above, one gets a
clear indication that the government has indeed shared full pricing details
including cost comparison and item-wise details with the Court while asserting
on its secrecy for security and other obligatory reasons under the two
governments’ bilateral agreement. It is also pretty clear that the Court has
not observed any discrepancy or gap regarding the alleged price escalation by
the petitioners. While analyzing the indicative price details of various
components as available in the public domain, this author had earlier pointed
out that the exorbitant price quoted by the critics and detractors is on
account of the misplaced comparison. While the government has shared the cost
of the bare-bone aircraft, the critics and detractors are taking the cost of
the aircraft in fly-away condition as came out in media that includes many
other India-specific adds-on, weaponry and missile systems, spares and
logistics/maintenance for a certain period.





Those who have some knowledge
of the "dynamics of the Defence procurement and expenditure " worldwide
would also know how the respective governments keep such details under wrap for
the strategic reasons and India too is not an exception. In the past and even
now, the Russia has been major and most dependable supplier of the defence
equipment under inter-governmental route and any objections or allegations
about it never surfaced up from any source during the past decades. The Rafale
deal too is under government-to-government arrangement. On the other hand,
almost every major defence deal from the Western private sources has been under
controversy for opacity and corrupt practices under the erstwhile Congress
governments. This author does not endorse opacity but is pretty well aware with
his own experience in the Defence Sector that this culture is a product of the
bureaucratic working evolved during long Congress governments' rule. An
inter-governmental agreement rules out the intervention of the middlemen who
are the main link and source of corruption and kickbacks in international deals
and in Rafale deal there was no middleman.





(3) Offsets





Para 27 to 33 of the aforesaid
judgment cover the relevant offset guidelines and procedure, averments of
parties, role of the Indian government and vendor, analysis of the Court and
final inference drawn. The Court has taken a note of the government position
that any offset proposal regarding Indian Offset Partners (IOPs) has not been
received so far from the vendor, that the OEM is free to select its offset
partners as per the offset guidelines, and also that the Dassault Aviation has
issued a press release stating that it has signed partnership agreements with
several companies and is negotiating with over a hundred other companies.





The Court also took cognizance
of the recent origin of the Reliance Aerostructure Ltd in a joint venture with
the Dassault, and the press release suggesting that there was an arrangement
between the parent Reliance company and Vendor starting from the year 2012. The
Court has taken a view that what transpired between the two corporates would be
a matter best left to them, being matters of their commercial interests, as
perceived by them. As far as the role of HAL, insofar as the procurement of 36
aircrafts is concerned, there is no specific role envisaged. Here the Court has
taken the cognizance of the contractual problems because of which Dassault was
circumspect about HAL carrying out the contractual obligation, and which is
also responsible for the non-conclusion of the earlier contract. Taking all
related aspects of the offset issues, the Apex Court has reached the following
conclusion:





“…Once again, it is neither
appropriate nor within the experience of this Court to step into this arena of
what is technically feasible or not. The point remains that DPP 2013 envisages
that the vendor/OEM will choose its own IOPs. In this process, the role of the
Government is not envisaged and, thus, mere press interviews or suggestions
cannot form the basis for judicial review by this Court, especially when there
is categorical denial of the statements made in the Press, by both the sides.
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 does not rest with the Indian Government.”





In fact, this author has
earlier noted and pointed out that the issues of the manufacture of 108
aircrafts in the HAL and the discharge of 50 percent offset obligation by the
OEM as provided in tender documents were two entirely distinct and unlinked matters
in the earlier contractual process that did not materialize. In fact, any role
of the HAL in the discharge of the offset obligation was never envisaged,
contrary to what the detractors and leaders of the opposition are erroneously
or deliberately claiming. Quite obviously, due to lack of the in-depth
knowledge and clear understanding of the technical and financial issues of the
defence procurement procedure, not only politicians in the opposition but also
the ruling party have frequently linked the offset issue with the HAL while
debating the issue in media or press. This position was amply made clear in
author’s previous article too in August 2018:





“The fact is the French side
has committed about 30 percent for the military aerospace research and development
programmes and the remaining 20 percent for the various components and spares
for the said aircraft. By implication, this would mean that apart from the
Reliance, the DRDO and several other big and small Indian companies would most
likely get business opportunities during the next 4-5 years out of an estimated
Euro 3 billion value. The main objective of the offset is to leverage capital
acquisitions for the development of the indigenous defence industry and
research.…People both politicians and others appear ignorant or at least
pretending so when they sing merits of the HAL while levying charges of
cronyism because the manufacture of aircraft in India and the discharge of
offset obligations by the OEM are two distinct and unrelated activities.”





(4) Defence Preparedness and
Quality of Aircraft





The above issues, per se, were
not under the scrutiny of the Apex Court. However, in their landmark judgment,
the Court also observed that the country cannot afford to be unprepared or
underprepared in a situation where the adversaries are stated to have acquired
not only fourth generation but even fifth generation aircraft, of which the
country has none. It also said that there was no doubt about the need and
quality of the Rafale jets. For instance, the Chengdu J-20 is a twinjet,
all-weather stealth fifth-generation fighter aircraft reportedly already in
service of the People's Liberation Army Airforce of China in Asia. These
observations of the Court are important in the light of the fact that one of
the petitions had also sought annulment of the inter-governmental agreement for
the supply of 36 fighter jets.





Court Verdict and JPC





After the Apex Court dismissed
the petitions, the government and ruling party has welcomed the verdict as the
victory of truth. In a press conference, a senior minister dubbed the
allegations on the Rafale deal as "fiction writing" impinging on the
national security. In a veiled attack on those opposing the deal with the
allegations of corruption, he said that the disrupters have lost on all counts
and those who manufactured falsehood compromised the security of the country.





On the other hand, the
principal opposition party put a question mark on the verdict and competency of
the Supreme Court and later also claimed that the Court has vindicated its
stand that the issue of "corruption" in the Rafale fighter jet
agreement cannot be decided by it. It reiterated the demand and challenged the
Centre to constitute JPC to probe the deal. According to them, only a JPC can probe
and bring out the corruption in the deal. In fact, in a fiery speech during a
press conference, the Party President called Prime Minister by name citing ‘the
entire country knows, chowkidar chor hai’ and that ‘he may hide and run but
won’t be saved the day there is an enquiry’. Emboldened with the recent success
of his party in three state assembly elections, it was possibly an obvious
threat hinting post-2019 Parliamentary election scenario.





There is an obvious reason why
interested political parties always seek a JPC probe in contentious issues.
Actually, JPC is constituted from amongst the Members of Parliament of both the
houses with a proportional representation of the political parties. In such a
forum, the members usually split on the predicted political line and any
recommendation or outcome is seldom based on consensus but the political agenda
and objective of the interested parties is largely achieved merely by the
constitution of the Committee and dissenting voices of the members. When the
apex judicial institution has impartially examined all aspects including
pricing of the deal before delivering the verdict, such demand has no
justification other than an attempt now to derive the political mileage and
intended objective through the JPC route.





Words of Wisdom





While the aggression of the
principal opposition party on the Rafale deal for the political reasons is well
understood but questioning the authority and jurisdiction of the Supreme Court,
attempts to misinterpret and exploit typo in the judgment and distancing itself
from the judicial review and PILs - widely interpreted as proxy petitions, is
indeed unethical and in bad taste suggesting a dangerous trend in the Indian
politics and democracy. Of late, a trend has started that if a favourable judgment
has not come, some political parties and people try to deny it and even
criticize the apex judicial institution raising controversies. In the instant
case the principal opposition party has quoted the Supreme Court judgment as
self-contradictory and shocking with factual inaccuracies (possibly referring
to a reported typo) and that the government's curative petition adds insult to
the injury caused; hence the Apex Court should charge the government with
perjury and contempt of court.





In fact, only recently the
principal opposition party had gone to the extent of moving a case in the
Parliament to impeach the then Chief Justice of India. The other constitutional
and statutory institutions in the country too are not spared. In the event of
loss in elections, vicious allegations are made that the Electronic Voting
Machines (EVMs) have been rigged and even the Election Commission has often
been targeted with the allegation of favourism by the same people/party.
Similar treatment is also meted out to the institutions like CAG, Vigilance
Commission, constitutional posts and Indian Army. If the institutions are not
allowed to work independently and judiciously for the ephemeral selfish
interests by the political parties, the time is not far when the people of
India will lose their faith in the political system and democracy leading to
anarchy and chaos.





The principal opposition party
and its leader has continuously raised rhetoric against the Rafale deal calling
the Prime Minister by name as "chor hai" (He is thief) without any
cognizable evidence or lead. To some extent, the strategy has worked to their
advantage in terms of recent electoral successes. Even the Supreme Court
acknowledged the relevance of the national security and that such issues need a
more sensible and discreet approach but some political parties have no qualms
about stretching things to any extent even jeopardizing national security so
long it serves their political interests and ends. This is what has happened in
the case of Rafale deal. Political rivalry and consequent differences and
criticism should be alright but abusing and demeaning the constitutional
institutions and offices like Prime Minister and President of the country in
the process is disgraceful and inexcusable. Similarly, to serve domestic
political interests, the acts of compromising the national security and
friendly relations with all-weather dependable allies like France too are
political blunders and inexcusable acts. Such acts may earn temporary haul but none
should remain in doubt that the people of India will soon realize the truth
behind these uncanny games and punish such parties and people. The truth cannot
be concealed or suppressed for long.


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