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news details
Rafale case: SC poses queries on waiver of sovereign guarantee, no tech transfer
5/10/2019 9:01:41 PM


New Delhi, May 10
The Supreme Court Friday posed searching questions to the Centre on its deal with France to buy 36 Rafale fighter jets on issues like the "waiver of sovereign guarantee" and the absence of technology transfer clause in the IGA pact.

The top court reserved its verdict on pleas, including the one filed by former Union ministers Yashwant Sinha, Arun Shourie and activist lawyer Prashant Bhushan, seeking review of its December 14 judgement which gave clean chit to the Centre's Rafale deal to procure jets from the French firm, Dassault.

A bench headed by Chief Justice Ranjan Gogoi referred to a judgement in the Lalita Kumari case which said that an FIR is must when information revealed commission of cognizable offence. "The question is whether you are obliged to follow the Lalita Kumari judgment or not."

Attorney General K K Venugopal told the bench, also comprising Justices S K Kaul and K M Joseph, that "there has to be a prima facie case, otherwise they (agencies) cannot proceed. The information must disclose commission of cognizable offence".

Justice Joseph referred to the earlier deal and asked the Centre as to why the inter-governmental agreement (IGA) on Rafale with the French administration does not have the clause of transfer of technology.

"The court cannot decide such technical aspects," the law officer said.

On the court's question of waiver of sovereign guarantee by France in the IGA and its replacement with a letter of comfort, Venugopal said it was not an "unprecedented practice" and referred to such agreements with Russia and the US where there was such a waiver.

"It is a question of national security. No other court in the world will examine a defence deal on these kinds of arguments", he said.

The bench was hearing three review petitions filed by the trio, a lawyer Vineet Dhandha and AAP lawmaker Sanjay Singh.

The apex court had said in the December verdict that there was no occasion to doubt the decision-making process in the procurement of 36 Rafale fighter jets and dismissed the petitions seeking an investigation into alleged irregularities in the Rs 58,000 crore deal.

At the outset, Bhushan submitted that the judgement did not deal with the prayer seeking probe into the deal and decided the petition on the premise that it was seeking cancellation of IGA.

He said the Centre misled the court by referring to non-existent CAG report in November, 2018 hearing when it is on record that the report came later in February this year.

"How did the government anticipate even before the CAG report came that the pricing details of Rafale will be redacted. In a report submitted in November 2018, how did they know that the CAG report in February next year would redact pricing details," the lawyer asked.

Bhushan alleged suppression of material facts from the court by the Centre and said that as many eight critical clauses of the standard defence procurement procedure were dropped in the deal in the meeting of Cabinet Committee on Security in September 2016.

One of the clauses dealt with the aspect that the government can cancel the deal if the information of any involvement of middleman comes to the light, he said.

"This is shocking that the government concealed this piece of information from the court. Doing away with the anti-Corruption clauses and concealment of this fact from the court is by itself a sufficient ground to order a criminal investigation," he said.

He referred to the news articles and said that three experts of Indian Negotiation Team (INT) had also raised the the objections to the inflated pricing of the aircrafts.

"The bench-mark price was firm and fixed. It was 5 billion Euros. But the final price for Rafale jets shot up to 55.6 per cent above the bench-mark price and would continue to increase with time," he alleged.

Referring to reports, he alleged that besides the seven member INT, which was negotiating the deal, "parallel negotiations" were undertaken by the PMO and this weaken the negotiating powers of the INT.

"Even the NSA was playing some role although he was not to be involved," he said.

"Anil Ambani was involved in this deal right from the beginning" and he even produced a film for the wife of a French leader, he said, alleging "quid pro quo" which required criminal investigation.

Shourie also addressed the bench on a separate plea seeking perjury prosecution of unknown government officials for misleading it during the hearing of the pleas.

Venugopal vehemently opposed the submissions and sought dismissals of the review petitions saying that the basic grounds of these pleas were the same as in the main case.

"The Supreme Court has already decided the challenge to the Rafale deal. I would still say that the petitioners are seeking review of the judgment on the basis of secret stolen documents," he said.

He then referred to a clause 10 of the IGA between France and India and said that it mandated maintaining the secrecy of the deal.

Venugopal then referred to the CAG report and said that it has been found that the government got the jets at 2.86 per cent lower price.

The government is under obligation to put defence material under cover, he said, adding that "when the security of the country is involved, you do not view it as a contract to build a highway or a dam".
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