Rafale verdict: No occasion to doubt govt’s decision, rules Supreme Court

The Supreme Court has found no substance in allegations of favouritism by the government in the choice of Reliance Aerostructure Limited as the Indian offset partner of Dassault Aviation, the French maker of Rafale fighter jets from whom India has agreed to purchase 36 combat aircraft.

The court was ruling on four PILs accusing the government of tweaking the Defence Procurement Procedure (DPP) to benefit Reliance, a company with no prior experience in defence production.

The PILs, by three public-spirited lawyers, AAP MP Sanjay Singh, and former union ministers Yashwant Sinha and Arun Shourie, claimed that the Reliance firm came into existence in 2015, a year before signing of the Rs 58,000-crore deal between India and France. They alleged corruption in the deal and hence demanded filing of an FIR and a court-ordered probe.

"There is 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," said a bench of Chief Justice Ranjan Gogoi and Justices SK Kaul and KM Joseph. 

The hearing into the scrutiny of the deal was extraordinary as the government placed details of the decision-making process, price of aircraft, and decision over choice of Reliance as Dassault's offset partner in a sealed cover. Even Indian Air Force officials deposed in court along with senior defence ministry officials to answer the court's queries on India's airpower capabilities.

After analysis of documents, the bench said, "We do not find any substantial material on record to show that there is a case of commercial favouritism to any party (company) by the Indian Government, as the option to choose the IOP does not rest with the Indian Government."

The court agreed "no doubt that the company Reliance Aerostructure Ltd has come into being in the recent past" but refused to go into the choice of Reliance as it was a matter best left to Dassault.

On pricing, which was another contentious issue, the court said it had closely examined the comparative prices of the basic aircraft along with escalation costs as stated in the original order for 126 aircraft, but preferred to keep the matter confidential. "It is certainly not the job of court to carry out a comparison of the pricing details in matters like the present," the bench said.

Even on the decision-making front, the court found that the process under DPP 2013 was broadly complied. It did not insist on a clause-by-clause compliance as it viewed contracts of defence procurement within the confines of national security and the procurement being crucial to nation's sovereignty. Moreover, the court noted the position that India does not have 4th and 5th generation aircraft, which "our adversaries have acquired". In such a situation, the judges said, "our country cannot afford to be unprepared or underprepared."

Answering the argument by the petitioners on why the government scrapped the earlier tender request for 126 Rafale jets and instead signed an inter-government agreement for just 36 aircraft, and that too at an escalated cost, the court said, "We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircraft in place of 126...it is neither appropriate nor within experience of this court to step into this arena of what is technically feasible or not."

Moreover, the Court noted that the decision-making or pricing of the deal was never in question since the deal concluded in 2016. It was only after former French President Francois Hollande alleged how the Indian government insisted on Reliance as Dassault's offset partner that triggered filing of the petitions. "Perception of individuals cannot be basis of a fishing and roving enquiry by court," the bench noted.