The Supreme Court noted that the review petitions "lacked merit".

Supreme Court upholds clean chit to Union govt on Rafale dealPTI photo
news Rafale Thursday, November 14, 2019 - 10:56

The Supreme Court on Thursday upheld the clean chit to the Union government in the controversial Rafale case, and dismissed the review petitions filed by former Union Ministers Yashwant Sinha, Arun Shourie, and lawyer Prashant Bhushan as they "lacked merit."

The case has taken several turns, especially over the last few months. Here is an explainer on the controversial Rafale deal and why the Supreme Court decided to hear the review petition despite giving the Central government a clean chit in 2018.

What is the Rafale Deal?

In 2012, the Indian Air Force, which was seeking to phase out old Russian fighter jets, narrowed down on Rafale, built by France’s Dassault, and the Eurofighter Typhoon. The UPA government under the then Prime Minister Manmohan Singh, had decided to buy 18 Rafale fighter jets from Dassault, and decided to build the rest in India along with the state-owned Hindustan Aeronautics Limited (HAL).

For two years, talks with India and France were inconclusive and finally in 2015, after Prime Minister Narendra Modi’s visit to France, he announced a new deal. India would now acquire 36 Rafale jets from France in fly-away condition. The deal was estimated to cost India Rs 59,000 crore and the aircrafts would be made in France. The agreement also mandated that Dassault would have to offset 50% of the total cost (Rs 59,000 crore) in India. An offset clause makes the companies supplying defence equipment to spend a portion of the money in a certain way as prescribed by the agreement. This clause mandated that 50% of what India would be paying Dassault would be invested in the Indian defence system.

Out of around 75 firms listed under the offset clause, the makers of Rafale — Dassault Aviation— was allowed to choose any company it wanted for France to invest the said amount in, the deal stated.

In November 2017, the Congress alleged that the government was not being transparent about the price of the deal. The party alleged that the NDA government was paying thrice the amount for each aircraft than what the UPA had agreed upon.

The Congress has also alleged that the Anil Ambani-led Reliance Defence Limited had been unfairly chosen as the Indian partner under the offset clause, claiming that this was done to ‘favour’ Anil Ambani’s company as the private firm had no prior experience in aerospace manufacturing. Congress President Rahul Gandhi demanded that the government put on public record the details of the deal.

So how did the Rafale deal end up at the doors of the Supreme Court?

Former French President Francois Hollande’s statement and the SC case

In September 2018, several media outlets reported that the former President of France, Francois Hollande, had said that the French government had no choice in the Rafale deal but to choose Reliance Group as its offset partner.

Following this, in October 2018, Manohar Lal Sharma, a Supreme Court lawyer, filed a writ petition with the apex court seeking a court-monitored investigation into the Rafale deal. He also sought a court order to quash the inter-governmental agreement of 2016 for the purchase of the 36 Rafale jets. Another writ petition was filed in the same month by MP Sanjay Singh, who alleged irregularities and non-transparency in the deal. A third petition was filed by former Union Ministers Yashwant Sinha, Arun Shourie and lawyer Prashant Bhushan demanding that the CBI register an FIR in connection with the case.

A bench of Chief Justice Ranjan Gogoi, Justice Uday Umesh Lalit and Justice KM Joseph, began hearing the petitions together, and in November 2018, reserved its judgment. During the course of the hearing, the Supreme Court had directed the Union government to submit the details of the deal regarding pricing, particularly on the allegation that certain offset partners benefited from the Rafale deal.

Attorney General KK Venugopal, representing the Centre, had told the court that it might not be possible to disclose the cost, citing reasons of national security. However, the court ordered the Centre to submit an affidavit explaining what the "difficulty" in sharing the information on pricing was. The court also sought further details that could "legitimately come in the public domain with regard to the induction of the Indian offset partner (if any) be also furnished to the...counsels for the parties, as well as the petitioners in person." However, the court clarified that details which the government may, at this stage, consider to be "strategic and confidential" should be submitted to the court without sharing it with the counsel for the petitioners.

Ultimately, the government submitted the documents in a sealed envelope. In December 2018, the Supreme Court dismissed the writ petitions.

The review petition

However, in February this year, The Hindu published a series of six stories that revealed details about the negotiations for the deal under the Narendra Modi government.

One of the key findings in newspaper's reports were that the Defence Ministry’s negotiating team had written notes that the Prime Minister’s Office was conducting separate negotiations with the French government and was undermining the negotiating team’s authority. This, in turn, reportedly weakened the Defence Ministry’s ability to strike a better deal, and that the French were allowed to drop crucial clauses that mandated bank guarantees and anti-corruption measures in the Rafale deal. These reports were based on Defence Ministry officials’ reports and notes.

It was after these reports that Yashwant Sinha, Arun Shourie and Prashant Bhushan filed a review petition with the Supreme Court seeking an investigation, and took the documents uncovered by The Hindu. In December 2018, the Supreme Court had said that it had found no discrepancies in the government’s deal. With the new information, the petitioners now contended that the government deliberately misled the court.

The government had told the court that the documents published by The Hindu were ‘stolen’ and hence could not be admissible as evidence. However, the Supreme Court said that it was part of the media’s right to free speech to publish the documents and that there is no Constitutional provision, which states that documents marked ‘secret’ or ‘confidential’ could not be published by the media.

In May this year, after hearing the arguments, the Supreme Court reserved its judgment.

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