SC Asks for Rafale Pricing Details

The Rafale jet controversy that has been haunting the Modi govt. for months took an unexpected turn today when the Supreme Court asked the govt. to submit “details of pricing and cost” of the deal signed between the Modi-led Indian govt. and the French govt. in April 2016.

This was unexpected because in the last hearing the Court had said that it would not like to go into "pricing or suitability" of the jets.

When Attorney General K.K.Venugopal objected saying that these details have not even been placed in Parliament, Chief Justice Ranjan Gogoi reportedly said “if pricing is something exclusive that you are not sharing, file an affidavit to that effect. State on affidavit that you cannot furnish those details.”

The SC direction for pricing details has given another push towards more transparency in the Rafale deal which has been kept under a shroud of secrecy by the govt. despite widespread protests and demands for giving out the details.

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The govt. has been given 10 days to file its affidavit in sealed cover. Petitioners will get another seven days to respond. The next date is fixed for 14 November.

The apex court also allowed the sharing of a note submitted by the govt. with the petitioners. The note contains details of the decision-making process through which the govt. had arrived at the deal to but 36 Rafale jets from French manufacturer Dassault.

“At this stage, we would not like to record any findings or view with regard to the contents (of the aforesaid note). Rather, we are of the view that the information in the confidential report can legitimately be brought in to public domain. Along with the said facts, further details with regard to the induction of the Indian Offset Partner (if any) be also furnished to the counsel of petitioners,” the CJI told the govt. counsel. 

The Court is hearing a bunch of petitions, including one filed by Yashwant Sinha, Arun Shourie and Prashant Bhushan. The petitions have questioned the bonafide of the govt. in undertaking a new deal for buying 36 Rafale jets at a cost of Rs.59,000 and scrapping the earlier near-deal hammered out by the previous UPA govt. for buying 126 Rafale jets, including 108 to be built in India by public sector Hindustan Aeronautics Limited (HAL).

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The new deal between the Modi govt. and the erstwhile Hollande govt. in France was inked in 2016. It included an offset clause that specified that half of the expenditure by Dassault would be done in India for which Anil Ambani’s firm was chosen. Controversy has raged on the need for this new deal, the escalated costs, and most worryingly on the choice of Ambani’s company as a partner which has practically no experience in aeronautics and armaments manufacture. Former president Hollande upped the ante when he revealed in a recent interview that Ambani’s firm was insisted upon by the Modi govt. Later Dassault has been at pains to deny this but the suspicion of hanky panky in the deal has spread in the country.

Hearing petitions questioning the Rafale jet deal, the Supreme Court today asked the government for details of pricing and the selection of Anil Ambani's defence firm as India offset partner. The information is classified, the government said, after which the court asked for a written submission within 10 days that these details cannot be shared.

In the last hearing, the court had asked for details of the decision-making process that led to the deal but had emphasized that it would not get into "pricing or suitability" of the jets.

But today, the court said, "We would like the details of pricing and cost to be submitted to the Supreme Court in a sealed cover. This may be submitted in the next 10 days."

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The government argued that pricing was not revealed in parliament and the earlier government had also not disclosed details of a previous deal. Say it in an affidavit, Chief Justice of India Ranjan Gogoi told the government's lawyer.

The court is hearing petitions, including those filed by former ministers Yashwant Sinha and Arun Shourie, questioning the jet deal between India and France and the choice of Anil Ambani's inexperienced Reliance Defence as India partner for Rafale maker Dassault.

Mr Shourie called the court's order a "very, very substantial step forward" in the controversy. "Confidentiality does not relate to price, only technical specifications. It will be subject to challenge. It will be difficult to say pricing is confidential," Mr Shourie told NDTV.

Beginning the hearing, the judges noted that the "suitability of the jet and its utility" has not been questioned. "What had been questioned is the bonafide of the decision-making and price," they said.

Petitions before the court call for an investigation into the Rs. 59,000 crore deal for 36 fighters from Dassault, announced in 2016 after Prime Minister Narendra Modi's talks in Paris with then French president Francois Hollande.

Congress president Rahul Gandhi has led the opposition charge against the Rafale deal, repeatedly accusing the government of negotiating a not-so-favourable contract just to benefit Anil Ambani. Both the government and the industrialist have denied the charge.

The political row escalated sharply after Francois Hollande said in an interview last month that France had no role in the selection of Anil Ambani's company as India partner.

The previous Congress-led UPA government had negotiated with Dassault for 126 Rafale jets under which 18 jets were to be supplied in a fly-away condition and 108 were to be manufactured in India along with state-run Hindustan Aeronautics Limited (HAL). However, the UPA could not seal the deal.

In the deal negotiated by the new government, Anil Ambani's firm became Dassault's offset partner with no experience in the field. As part of the offset clause, Dassault has to ensure that business worth at least half the money - Rs. 30,000 - is generated in India.

The Rafale fighter is a twin-engine Medium Multi Role Combat Aircraft (MMRCA) that Indian Air Force Chief BS Dhanoa says can be a "game-changer" and booster for India's defence.

According to the petitioners Mr. Sinha, Shourie and Bhushan, in 2007, after going through the requisite procurement procedures at various levels, tenders were issued by the Ministry of Defence for the purchase of 126 fighter aircrafts and it was specified in the Request for Proposal that 18 of these aircrafts would be purchased from abroad in a ‘fly-away’ condition and the remaining 108 would be manufactured in India in the factory of Hindustan Aeronautics Limited (HAL) with transfer of technology from the foreign vendor. After the financial bids, Dassault Company manufacturing the Rafale aircraft was declared the lowest tenderer and thereafter price negotiations began. These negotiations were at a very advanced stage (95% complete) by 25 March 2015, the petition states.