Day 5 Review Arguments

Rafale Fighter Jet Deal

May 5th 2019

The Supreme Court reserved judgment today. It heard Prashant Bhushan, Yashwant Sinha and Arun Shourie present final arguments. These petitioners are challenging the Supreme Court’s December 2018 judgment, wherein it declined to call for a court monitored criminal investigation of the Rafale Fighter Jet deal.
Before commencing his arguments, Mr. Bhushan requested the Bench to allow him to present arguments pertaining to the review petitions and to allow former cabinet minister Mr. Arun Shourie to present arguments pertaining to the the application for perjury and the application for the production of further documents. The Bench comprising Gogoi CJI , SK Kaul and KM Joseph JJ granted his requested. Gogoi CJI added that they should both complete their arguments within 1 hour.


Mr. Bhushan then began by reiterating that there were two main grounds for review:

  1. The December 2018 Judgment of the Court did not take into consideration one of the main prayers of the petitioners: a court-monitored criminal investigation
  2. The Judgment relies on factual errors and the Government misrepresented facts


With respect to the first ground, Mr. Bhushan pointed out that the Judgement delivered by the Bench on December 14th had proceeded on the basis that all the petitioners had prayed for a cancellation of the deal. He noted that his own petition had sought for a court-monitored criminal investigation into the deal.  He cited the Constitution Bench judgment in Lalita Kumari, which required the registration of an FIR and the completion of a preliminary inquiry within a weeks time. He emphasised that the Court, in its judgment, had not considred addressed the precedent established by Lalita Kumari.


On the second ground, Mr. Bhushan began by focusing on the report of the Comptroller and Auditor General (CAG report). The CAG audits all expenditure by the Government of India – it produced its report on the Rafale deal in February 2019. Mr Bhushan argued that the CAG report should not be basis for dismissing the review petitions, given the unusual facts surrounding the report. He recounted the timeline of relevant facts pertaining to CAG report. He submitted that during the writ petition stage, in November 2018, the Government had informed the Court that it has already shared the pricing details with the CAG and that Public Accounts Committee had reviewed the CAG report. Further he submitted that the Government stated that only a redacted version of the report, excluding pricing details, had been placed before the Parliament and is in the public domain. Then on December 17th, after the judgment, the Government filed an apllication for clarification before the Court, wherein it stated that it had meant to say that it was going to share the pricing details with the CAG and that the pricing details will be redacted. Mr. Bhushan questioned how the Government could have known in November 2018 that pricing details would be redacted from the CAG report, given that it was only published in February 2019. He emphasised that the CAG itself recorded that redacting pricing is unprecedented.


Mr. Bhushan then drew attention to the fact that the Government had dropped 8 significant standard clauses from the agreement, outlined in the Defence Procurement Procedure (DPP). The clauses dropped pertain to anti-corruption, such as undue influence, agents commission and access to books of industrial suppliers. Further, Mr. Bhushan submitted that the Government had not disclosed this to the Court.  The Government, at the stage of the writ petitions, had informed the Court that the CCS (Cabinet Committee on Security) had last met on August 24, 2018 before the signing of the contract in September. The Defence Acquisition Council had met again in September to carry out the amendments and the government had not disclosed these details before the Court. He submitted that the fact the government concealed this from the Court amounted to fraud and this alone vitiated the judgment of the Court. He relied on the documents published by The Hindu and the rejoinder filed by the petitioners earlier this week.Justice KM Joseph asked Bhushan whether the Government had the power to remove the clauses in this instance as the agreement was an inter-governmental agreement. Mr. Bhushan replied by stating that the Government did not raise this ground.


Next, Mr. Bhushan focused on the Indian Negotiating Team’s (INT) dissent note with regards to the pricing. 3 expert members out of the 7 of the INT expressed concerns about the price being over 7 billion euros, when the benchmark price was 5 billion euros, which was to be the ceiling price. The dissent note is date 01.06.2016 and was published by The Hindu. It was his submission that these grievances raised by the expert members had been claimed to be resolved without ant discussion. Mr. Bhushan also submitted that the details of these should have beenn placed before the Court. Further, the Defence Ministry had raised strong objections to parallel negotiations’conducted by the PMO which it stated had weakened the negotiating position of Ministry and Indian Negotiating Team, and this too, was not informed to the Court.


Finallly, Bhushan questioned why the number of aircraft reduced to just 36 aircrafts. He pointed out that the justification for this was that the aircraft would be delivered more quickly, however the schedule for delivery was still uncertain. Mr. Bhushan also made his submissions of the issue of Sovereign Guarantee stating the same was critical as a risk mitigating measure and the Letter of Comfort relied on by the government was of no consequence.


Upon being reminded by Gogoi J the he was almost the conclusion of his 1 hour, Mr. Bhushan took the Bench through the prayer clause of his petition and the Court agreed to look into his written submissions for any additional arguments.


Mr. Arun Shourie then briefly presented arguments. He made submissions on the application for perjury and the application for the production of further documents by the Government. With respect to the former application for perjury, Mr. shourie submitted that there were several instances in the judgment of the Court where the errors could be traced to the wrong information provided by the government, an example being the conflation of the two Reliance Industries (Mukesh & Anil Ambani). He also made a brief submission on the issue of the Sovereign Guarantee, arguing that it wascritical in the present case owing to France being a signatory to the Arms Trade Treaty which allows it to deny or modify any terms in supplying arms, and which India has not signed as it found it discriminatory. Focusing on the latter application for production of documents, Mr. Shourie submitted that they mainly sought for the original documents, so that the Court could see clearly how it had been misled by the Government.


The counsels for Vineeth Dhanda, Mr. Vikas Singh also made his brief submissions before the Court declined to hear the counsel for AAP MP Sanjay Singh who sought to present arguments.


The Court then heard Attorney General KK Venguopal present on behalf of the Government.  Firstly, he argued that the review petitioners were not presenting any new arguments and, rather, merely repeating the arguments from the orginal hearings and the same was not permissible at the stage of review. Next Mr. Venugopal addressed arguments on the issue of pricing , submitting before the Court that the same was covered under Article 10 of the Inter-governmental Agreement. He also referred to certain extracts from the CAG report to substantiate the point that the Rafale Jets had been purchased by India at a lower price, arguing that in the matter of defence deals, the government was entitled to keep certain information away from the public. It was to satisfy the Court that proper procedure had been followed that the CAG report was placed before the Court and the relinace by the petitioners on incomplete records and stolen file notings to argue a case of fraud could not be a ground for review when the Court had upheld the procedure followed by the government in its judgment. The purpose of the Rafale deal was not for ornamentation but defence and security and no other court would go into these aspects of a defence deal. He questioned whether it was the Court to go into the details of pricing at every level.


Upon being asked by Justice Joseph to address issue of the petitioner’s reliance on the Constitution bench judgment in Lalitha Kumari (2013) requiring the registration of an FIR if the complaint prima facie reveals the commission of a cognizable offence, Mr. Venugopal submitted that no case for such an inquiry was made out as the basis of the complaint wasthe dissenting opinion of 3/7 members of the INT as the issues raised by them had been resolved by the CAG. Further, there was no right of inquiry as the petitioners had no prima facie case and had now filed an application for production of documents to build one.


Joseph J then asked to place before the Court the records of the continued participation in the Rafale negotiations of the 3 members of the INT who had raised concerns over the higher Benchmark price and parallel negotiations by the PMO. Though Mr. Venugopal responded saying that if the Court directed so, the government would place the same before it, he stated that there were certain aspects that were not within the jurisdiction of the Court and in the present case, the Court was not making the distinction between any other contractual agreemnet for a road or any other public utility and one for a defence deal. By treating the Rafale Deal as the former, the Court was going into technical aspects beyond its scope on the basis of incomplete stolen documents.


Mr. Venugopal concluded his arguments by submitting that the present case pertianed to government activity in the paradign of national security and though the same was not completely excluded from judicial review, the scope of review was very limited and the Court was not competent to investigate certain matters.

(Court reporting by Disha Chaudhry)