[Rafale] [Session 1] : SC Agrees Not To Examine Pricing Details Of The Deal Now [Read Prashant Bhushan's Rejoinder]

Today the Supreme Court bench comprising Chief Justice Ranjan Gogoi and Justices S K Kaul and K M Joseph heard the petitions seeking a court-monitored investigation into the Rafale defence deal.The arguments were started by Advocate M L Sharma, who submitted that the details handed over the Government revealed "serious fraud" in the deal. He pointed out that negotiations between India and France regarding the deal commenced in May 2015, only after the deal was announced by the Prime Minister Narendra Modi in April 2015. The deal was approved by the Cabinet Committee on Security only in March 2016, almost a year after its announcement by the PM.The lawyer for the other petitioner Vineet Dhanda also reiterated these arguments. They submitted that the Attorney General should file a reply explaining how the deal happened to be announced even before negotiations and approvals by the Defence Acquisition Council and Cabinet Committee on Security.Next was the turn of lawyer for Sanjay Singh, Rajya Sabha MP of AAP. He submitted that the deal between Dassault and HAL for manufacture of 108 aircraft domestically was alive even as on March 2015; however, suddenly the deal was revised during PM's visit to France in April 2015 and the number of jets were reduced to 36. The Government had disclosed the pricing details of the deal in the Parliament twice. The cost per aircraft is substantially higher than the earlier deal, even though the equipments remain the same. The Government has stated in its documents that the new deal was necessitated to augment combat potential. Then, how does it seem logical to cut down the number of jets from 126 to 36, asked the counsel.Opening his case, Advocate Prashant Bhushan had touted as bogus the government’s stand that it has no role in the selection of the Indian Offset Partner as it is a matter between private parties and the time for a disclosure in this behalf by Dassault has not yet arrived.He had pointed out the relevant portion of the Offset Guidelines of the Defence Procurement Procedure of 2013 which require all proposals for offset contracts to be processed in the defence ministry and be approved by the defence minister and which remains un-amended.“Soon after initiating new deal, in August 2015, to ensure deniability, the GOI quietly amended the defence procurement policy as to offset contracts and that too with retrospective effect. But they forgot that there are other clauses in the offset guidelines which were not amended”, he had claimed.He drew the bench’s attention to the amended Paragraph 8.2 of Appendix D to Chapter 1 of the DPP which now allows the vendor to furnish details of the IOP, including its eligibility, even at the delayed stage of seeking offset credits or one year prior to discharge of offset obligations.“This has provided the government with the chance to say that they do not know who dassault’s partner is. So can Dassault execute the contract and get performance out of it without the defence ministry knowing?”, Mr. Bhushan had asked.Further, Mr. Bhushan had questioned the government’s justification to short-circuiting the process of tendering in respect of these 36 jets. The Centre has stated that as it has entered in an intergovernmental agreement with France, there is no need to issue a tender and invite bids.He had contended that the government has failed to disclose that as per the DPP, a resort to the Intergovernmental Agreement can be taken only in three cases-1. When the equipment is of proven technology and capability, belonging to a friendly foreign country, and identified by the armed forces upon participating in joint international exercises;2. Where a Very large value weapon system/platform in service in a foreign country is available for transfer or sale for a much lower cost; and3. Where there is a specific state-of-art equipment/platform but the government of the Original Equipment Manufacture’s country might have imposed restriction on its sale and thus the equipment can not be evaluated on ‘No Cost No Commitment’ basis.It was Mr. Bhushan’s case that the Rafale deal does not qualify on any of these conditions, the objective of the Intergovernmental Agreement being only to obviate the tendering process.He had argued that the law ministry had fagged two issues regarding the Intergovernmental Agreement- One, that no sovereign guarantee was offered by the government of France in the event Dassault failed to deliver, despite huge payments to being made to the French company; Two, any dispute with Dassault is to be resolved through arbitration with the the seat of arbitration being in Geneva and not India.Mr. Bhushan had narrated the entire sequence of events- “In the end of 2007, the government issued the RFP (Request For Proposal for the 126 Rafale jets). Before that, the IAF gave the SQR (Service Qualitative Requirement) that their strength has depleted. Next, The original proposal for 126 jets went to the Categorisation committee which...

[Rafale] [Session 1] : SC Agrees Not To Examine Pricing Details Of The Deal Now [Read Prashant Bhushan's Rejoinder]

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