Rafale: Petitioners Trying To Get A Fishing Enquiry Directed Without Even A Prima facie Case, Submits Centre To SC [Read Written Submissions]

Rafale: Petitioners Trying To Get A Fishing Enquiry Directed Without Even A Prima facie Case, Submits Centre To SC [Read Written Submissions]

In its final written submissions to the Supreme Court, the Centre has reiterated that no grounds are made out for a review of the December, 2018 decision of the court giving it a clean-chit in the Rafale controversy in view of "the application filed by the petitioners themselves, wherein the production of number of documents has been prayed for, (which) clearly establishes that the petitioners are trying to get a fishing enquiry directed without even laying foundation of a prima facie case".

It is submitted that in the garb of seeking review, reliance is being placed on some press reports and some incomplete internal file notings, obtained unauthorisedly and illegally from the Defence Ministry, in an attempt to get a fishing and roving enquiry ordered.
Moreover, it is argued that the CAG report, which has "comprehensively dealt with all technical and commercial matters including the pricing of the basic aircraft, the pricing of the entire package including the aircraft package and weapons package, bench-marking of price, price advantage due to shift from firm and fixed price to non-firm and fixed price, the cost of Bank Guarantees, lower prices negotiated for India Specific Enhancements and the delivery timelines amongst other issues", has been given the go-by by the petitioners.
The government has sought to rebut every claim levelled in the review pleas in the light of this CAG report, the credibility of which was attacked by petitioner-in-person Prashant Bhushan in the hearing on May 10-
"how did they know in November that in the report submitted in February, the pricing would be redacted? In its 'dissent note' at the start of the audit report, the CAG says that a request was received in January to redact the commercial details but the CAG was reluctant to carry out the redaction on account of lack of precedence! But when the Defence Ministry reiterated the request citing national security concerns, the details were eventually redacted...And now the government says that the CAG report has come which declares that all is well (in the Rafale deal) and hence, the review plea should be dismissed? How can we rely on this CAG report when the government knew in advance of an unprecedented redaction from it?", he had urged.
In its written submissions, the Centre has averred that "the CAG report has held that as far as the basic aircraft price is concerned, the cost in the bid of 2007 after price escalations is not lower than the negotiated cost under 36 Rafale Aircraft deal", that for the overall aircraft the contract was concluded at a price which is 2.86% lower than the audit aligned price, and that the CAG report has also brought out an additional benefit accruing to the country in view of the change from 'firm and fixed price' in the 2007 bid to 'non-firm and fixed offer' in 2016".
In context of the objection of three members of the INT to the 'bench mark price' being raised from 5.2 billion to 8.2 billion euros (which was repeatedly stressed by the review petitioners), the observation of the CAG that the benchmark price set by the INT was "unrealistically low" as compared to the commercial offer has been highlighted.
So far as the redaction of the pricing details from the report as laid down before the Parliament is concerned, it is advanced that there are several past instances of such redactions in respect of weapons, assets, location, numbers, deficiencies, such as in the 2017 report on the induction of Strategic Missile System in S-sector and another of 2014 on the procurement of Air Combat Maneuvering Instrumentation System.
In response to the suspicion surrounding Anil Ambani's RAL being chosen as the IOP in connection with the new deal, it is submitted that the annual offset implementation schedule, as per the offset contract, will commence from October, 2019 and that Dassault is yet to submit a formal proposal indicating the details of IOPs and products for offset discharge, in which the government of India has no role to play.
"On offsets, there has been no fundamental change since the judgment of Court delivered on 14.12. 2018 except some media reports suggesting a settlement of tax case of ADAG Group in France. This is a sovereign decision by a foreign country in a sector unrelated to defence which cannot be linked to purchase of 36 Rafale aircraft in any way", the Centre has suggested.
As regards the opposition to the doing away of the Bank Guarantee or Sovereign Guarantee for this deal, it is urged that the three dissenting INT members were "relying on incomplete information which is not even borne out by facts as they have emerged" in believing that the delivery of the Indian order would commence 10 years hence while 60% of the price would be tendered much before.
"The contract for the purchase of 36 Rafale aircraft was signed in September 2016 and the first aircraft is scheduled to be delivered to the country in September of 2019. The production and delivery schedule is monitored by High-level committee with representatives of the Government of France and India and the project is on schedule. Indian Air Force pilots and crew are already undergoing training in France to fly the aircraft", it is clarified.
Further, it is pointed out that the review pleas ignore the "outstanding guarantee" offered by the French government in the Letter of Comfort, undertaking to ensure at the earliest the reimbursement of any intermediary payments in the event of difficulty in executing the supply protocols, and the joint and several responsibility as assumed by the French Republic along with Dassault under the IGA.
Finally, it is stated that the Bank Guarantee charges as calculated by the CAG are around 7 times lower than the estimate of the three members of the Indian Negotiating Team, and that "even after taking into account that this is a saving by the vendor, the price in 36 Rafale aircraft procurement is lower than the audit aligned price from MMRCA bid".