Rafale judgment and the saga of errors!

Heard of the controversy surrounding the Supreme Court’s judgment in the Rafale case? Of course, you have! But do you know the real deal? Let’s find out…

Just a short note before you read further:

A judgment, contrary to what people usually think, can be incorrect and can be subjected to public discussion. Obviously, what the Court says is binding on all, but that does not mean that it’s immune from public discourse. In a democracy, discussion on merits of a judgment is healthy and often encouraged. As the Supreme Court itself puts it- We are supreme not because we are infallible but because we are final.

For the purpose of restricting the discussion to merits of the judgment, I have taken the facts as are iterated in the judgment. I have not considered the petitions filed in the Supreme Court upon which the judgment was rendered.

Now let’s begin to understand the matrix without meaning any disrespect to probably the greatest institution in the world which has championed public rights right from its inception.

There has been lot of controversy surrounding the intended procurement of Rafale Jets from France by the Government of India. We have heard the protagonist of the mala fide theory, both through the media and the petitions filed in the Top Court of India. We have also heard the stand of the Government, both prior to the litigation and post it. The recent judgment rendered by the Supreme Court is being seen as vindication of the stand of the Government that there has been no foul play in the deal and things have gone as per the rules framed in this regard. There has been extensive debates in the media where we have heard views from both sides. However, in the midst of the heated debate, one thing clearly emerges-the Government does recognise that there are certain errors in the judgment. The Government also says that the errors cannot be attributed to the Government’s affidavit filed in the Court. The Government, thus, seeks “correction” of those errors in the judgment by filing an application.

The controversy, which the Supreme Court was called upon to resolve, arose with a statement purportedly made by the then President of France about the purchase of Rafale aircrafts by Indian Government from Dassault Aviation, a French Aircraft Manufacturer. The then French President purportedly said that the French Government was not left with an option (as per the relevant rules) to choose its Indian Partner to facilitate the purchase of aircrafts by the Indian Government which, on its own, suggested Reliance Group to be that partner. There was also some cloud over the said deal as its details were kept totally confidential and were not even shared with the Parliament, let alone the public. The lack of transparency was accompanied by the fact of huge escalation of cost of the aircrafts when compared to the estimated costs in the previous proposed dealing between the French Manufacturer and the Indian Government in the year 2012. Thus, smacking some foul play, certain persons approached the Supreme Court with prayers, chiefly, for Court-monitored investigation.

The petitioners in the matter had raised several points for consideration of the Court including non-observance of the procedure laid down in rules. It is the claim of the petitioners that some of the points were not even considered by the Court. Nevertheless, for the purpose of this article, we’d confine only to the content of the judgment and read it as it is for the purpose of commenting on its merits.

The judgment starts off by stating that jurisdiction of the Supreme Court in matters of such kind is extremely narrow. It quotes a few previous judgments of its own to say that in matters of national security, judicial review is significantly restricted, if not completely ousted. The Court says that the judicial review in such matters is confined only to the aspect of arbitrariness or unreasonableness of the procedure and the alleged mala fide in the decision making which vitiates the process. The law appears to have been correctly reiterated by the Court. In matters of governmental decisions, a court called upon to judicially review is not concerned with the correctness or otherwise of the decision arrived at by the government. The court is chiefly concerned with the process which culminated into the decision. If the process if tainted with malice, favouritism, arbitrariness or unreasonableness, the court interferes and sets aside the decision made. However, if the procedure has been correctly followed in tune with natural justice, the court does not replace the opinion of the government with its own. That’s the standard firmly laid down by numerous decisions of the Supreme Court.

So, in this matter, the Court proceeded to determine the validity of process which went into the decision making to purchase the aircrafts at exorbitant prices. The Court held that rules had indeed been followed in the matter and if there were minor deviations, they cannot be the basis for setting aside the decision. The Court held that the matter being of national security, it must be subjected to a different kind of judicial review and the Court should not evaluate the process minutely. Stand of the government on this aspect was that the Defence Procurement Procedure (DPP), 2013 had been followed and that there was no violation of the said rules. However, the Supreme Court, at first, expressed its doubt regarding following the DPP, 2013 as it was to apply only to those cases where the Request for Proposal (RFP) was issued after 1st June, 2013. However, in the present matter, the RFP was initially issued much prior to April, 2013 and it was withdrawn in June, 2015. So, the Supreme Court questions as to how DPP, 2013 can be claimed to have been followed. But, the Court then rebuffs the aforesaid doubt by quoting a clause from DPP, 2013, which says thus:

“75.   Any   deviation   from   the   prescribed procedure will be put up to DAC through DPB for approval.”

However, a plain reading would suggest that any “deviation” in the “prescribed” procedure is to be placed before the authority for approval. Therefore, this obviously does not cover a scenario where the “prescribed” procedure (the relevant rules) has been a given a complete go-by. So, we feel that the issue should not have been so lightly brushed aside by the Court. Although, the anxiety of the Court to interfere in the matter is justified as the matter does pertain to national security and therefore courts should be extremely slow in intervening; yet, when the wholly inapplicable procedure has been followed, or “prescribed” procedure has not even been implemented, the action cannot be validated. We must keep in mind that in India, there is no supremacy of the parliament, executive or the judiciary. Supremacy, in India, is of the Constitution of India; and , the Constitution does not sanction any governmental action without the backing of the law (rules in the present case).

The Court then dealt with the aspect of cost of the aircrafts being arbitrary. As is stated above, there is reportedly a huge escalation in the prices of the aircrafts which were being purportedly deliberated upon in 2012-13. This is accompanied by the drastic reduction in number of aircrafts being procured by the government. What further adds fuel to fire is the petitioners’ allegation that the pricing details have not even been shared with the Parliament, let alone the people of this country. This, naturally, is a disturbing element as details of expenditure of huge chunk of tax-payers’ money are being concealed in the names of contractual obligation with the manufacturer and national security. However, on this aspect, the Supreme Court found solace in the fact that the pricing details were actually shared with an independent authority i.e. the Comptroller and Auditor General of India (CAG), whose report in turn was examined by the Public Accounts Committee (PAC). Further, a redacted portion of the report is already in public domain. The relevant portion observing aforesaid reads thus:

“25…The   pricing   details   have,   however,   been   shared   with   the Comptroller   and   Auditor   General   (hereinafter   referred   to   as “CAG”), and the report of the CAG has been examined by the Public Accounts Committee (hereafter referred to as “PAC”).  Only a redacted portion of the report was placed before the Parliament, and is in public domain. …”

Thus, the Court felt that there was no need to be anxious about pricing of the aircrafts as the same have been approved by two independent authorities. One would feel a little relaxed after the aforesaid assurance- but wait a minute…there’s a catch!

The above facts are incorrect! Yes, as strange as it may sound, stand of both sides is that the details were not shared with CAG. So there is no question of CAG’s report being placed before PAC. And, so, there is no report in public domain. The solace straightaway disappears in thin air. Now, the aforesaid incorrect facts were not provided to the Court by the petitioners. So, they must have been provided by the government. The government’s stand in this regard is, to say the least, very bold. It says that the incorrect facts were not provided to the Court by it, but they are the result of Court’s misinterpretation of its affidavit. The government has further gone ahed with filing of an application before the Court for “correction” of the judgment to clear “confusion” in the minds of general public. Now, there is no point in speculating as to what had gone wrong-whether there was actually a misinterpretation of the Government’s affidavit by the Supreme Court or was there a misrepresentation of fact by the Government in the affidavit; as, situation would be clear after the decision on the said application for “correction” of the judgment. The question arises, however, is that with the Court’s said solace about pricing gone, isn’t the basis of the judgment obliterated? I would think so.

The Court lastly deals with the issue of favouritism to Reliance Group in suggesting it as the Indian Offset Partner (IOP) to facilitate the procurement of aircrafts. The controversy has the genesis in the aforementioned statement made by the French President that the Government of India suggested Reliance to be that partner and no manner of choice was left in this aspect with the Manufacturer. The petitioners had alleged that a Reliance Group Company- Reliance Aerostructure Ltd. (RAL) was selected as the IOP on the basis of government’s suggestion (read compulsion). This is accompanied by the fact that the homeland (a public sector enterprise) company- Hindustan Aeronautics Limited (HAL), which was initially to be the India Offset Partner, had been given a go-by. The Court brushes aside the interview of French President by stating that there has been denial of the same from “every side”. Needless to say, this observation is not the most clear part of the judgment therefore one cannot make up their mind around the same. The Court then places reliance on the said DPP, 2013 (application of which is itself suspect) to say that government has no role to play in selection of IOP by the manufacturer. The Court then says that media reports suggest that Reliance and Dassault were in talks with each other since 2012, therefore, incorporation of RAL only in April, 2015 is of on significance. The Court then ends the discussion by holding that what transpired between the two corporates- Dassault and Reliance is a purely commercial matter best left to them. The Court notices the following:

“”32. It   is   no   doubt   true   that   the   company,   Reliance Aerostructure Ltd., has come into being in the recent past, but the   press   release   suggests   that   there   was   possibly   an arrangement between the parent Reliance company and Dassault starting from the year 2012.  As to what transpired between the two corporates would be a matter best left to them, being matters of their commercial interests, as perceived by them….””

It is, however, interesting to see how the issue of national security turns into a purely commercial matter. Frankly, I am not able to comment on the issue of involvement of Reliance for lack of clarity in the judgment. However, with serious errors being pointed out in the judgment, the so called “commercial nature” of the deal between the two corporates may be inspected. This is because the finding on the said aspect by the Court is preceded by the Court’s solace of pricing details being shared with CAG, PAG and the public.


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