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RAFALE JET DEAL: MANOHAR LAL SHARMA V. NARENDRA DAMODARDAS MODI

AUTHOR- Rohan Kumar Singh, Asian Law College

FACTS

In 2007, the minister of defence issued tenders to purchase of 126 fighter aircraft for Indian air forces, under defence procurement procedure (DPP). In this 126 aircraft union would purchase 18 from abroad in fly-away condition, while the rest 108 aircraft would be manufacture in India by Hindustan Aeronautics Limited (HAL) via transfer of technology from a foreign company.

After an extensive selection process, the union selected the French company Dassault. Dassault manufacture the Rafale twin-engine fighter aircraft. From 2007 till 2015 the price negotiations were in their final stage.

However, in march 2015 a new deal came in picture where our prime minister Narendra Modi and the president of France announced a new deal for the purchase of only 36 rafale fighter aircraft. The minister of defence subsequently announced that the tender for 126 aircraft had been withdrawn. The new deal includes 50% offset clause, this require Dassault and other foreign company to invest (THALES & SAFRAN) to invest 50% of the contract value back into Indian goods and services. In 2016 Dassault and Anil Ambani announced a joint venture: Dassault Reliance Aerospace ltd (DRAL) Dassault was intended to invest $115 million to partially fulfil its offset obligation.

ISSUES

There were a lot of controversy going on with this deal people were questioning every action of the government and many questions like: -

1)Those the decision of government to buy 36 aircraft instead of 126 suffer from any irregularities in the process of decision making by union government.

2)Price of Rafale jet were also an issue and there were some irregularities in price because the per unit price were higher than what it was under old UPA government.

3)Clause 8.6 of defence offset guidelines was also question as government required to get permission from minister of defence before making Reliance Defence Ltd as Dassault Aviation's Indian Offset Partner.

4)The final issue was is this Rafale jet deal between India and France qualify as an inter-governmental agreement.

RULES

1) Article 32 of Indian constitution

2) Clause 8.6 of defence offset guidelines

3) Article 10 of the Inter- Governmental Agreement

APPLICATION

In this case petitioner seek to question the very fulfilment of the prerequisites for entering into an IGA. The government of France, giving only a ‘letter of comfort’ and not a ‘sovereign guarantee’ has been questioned.

The respondents have sought support from paragraph 71 of the DPP 2013.para 71 of DPP 2013, postulates possibilities of procurement from friendly foreign countries, necessitated due to geostrategic advantages that are likely to accrue to the country.

CJI Ranjan Gogoi authored a unanimous judgement. In regard of the scope of judicial review, CJI Gogoi said that it varies with the subject matter of the case. To protect the sovereignty and integrity of India, undoubtedly is a matter of utmost concern for the nation. Keeping in view the above. he emphasised that, in this instance, the court’s scope of judicial review is severely restricted because the matter pertains to a defence procurement contract.

He stressed that the Rafale procurement deal is a vital national security matter, hence the ambit of the court’s scrutiny is restricted to assessing. The judicial scrutiny is permissible has been consistently held to be ‘illegality’, ’irrationality’ and ‘procedural impropriety’.

In this case CJI said that if there will be an investigation on the rafale jet deal could have ramification of India’s national security and sovereignty. Judge quote some cases from British jurisprudence ‘Applications for Judicial Review, Law and Practice’ by Grahame Aldous and John Alder. Which says judiciary have power to interfere in any activity but there is some national interest in which even CJI is incompetent to investigate as it come under national security.

In this case court focus their decision on 3 bases

1) Decision making process

2) Price variation

3) Indian offset partner

The court find out that the old contract between Dassault and UPA government couldn’t work out because there was a dispute between Dassault and HAL.

As per the contact 126 aircraft were agreed to purchased in which 18 were to be purchased directly and rest 108 were to be made in India by Dassault. There was a problem arising due to incompetence to fulfil the contact i.e. Issues related to contractual obligation and responsibility of 108 aircraft manufactured in India could not be resolved.

Due to this the old contract was cancelled in 2015 and there was a new government of NDA which made a new deal with France government under which 36 Rafale jet were to be purchased from France. The NDA government negotiation satisfied the court with this point.

Next allegation was the price of the jet were more then what the old deal was regarding this court received an sealed document containing all the money details regarding this deal which was confidential so cant be given to general public court as it will be against the article 10 of inter-government contract was satisfied by the file and court also received a letter from Indian air force personnel regarding the same. Court was satisfied with NDA arguments.

Then the final allegation was on Indian offset partner which was the main reason which triggered this litigation. For this NDA stated that this contract is governed by defence offset guidelines DDP and the government have to interference in this as per the defence offset guidelines, the OEM is free to choose any Indian company to be partner with Dassault.

There was an allegation of former France president that Indian government has forced Dassault to choose reliance as an offset partner. Court held that all the allegation was false and thus the rafale deal was approved.

With this there was an amendment in para 8 of the defence offset guidelines which prevented the disclosure of offset partner. The amendment applies retrospectively by the government. This amendment brought by the government conceals the terms and conditions for choosing an Offset partner from the public domain.

The petitioner again alleged the government and reliance for corruption but the court dismiss the petition saying role of government is envisaged and, this mere press interviews or suggestions cannot from the basis for judicial review by the court.

CONCLUSION

This case have different interpretation person to person some join this case with dispute between old and new government and some believe that reliance company is involved and government is working for private benefit but in the court all the allegation have been proven wrong and government have satisfied court by their point.

One point that people pinpoint is where are the details of the money invested in purchasing 36 Rafale and asking government to public the details of the investments made but this is against the policies and these data are very confidential can’t be leaked out.

My personal opinion is this is beauty of our judiciary system where we have given power to question even our government and no one is considered above law this is the beauty of law.


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