Rafale deal: Centre says there’s no sovereign guarantee from France, SC asks what if ‘offset partner runs off’

Nov 14 (AZINS) The Supreme Court on Wednesday reserved its order on pleas seeking court monitored probe in procurement of 36 Rafale fighter jets from France.

A bench comprising Chief Justice Ranjan Gogoi and Justices S K Kaul and K M Joseph concluded the arguments advanced by various parties which have also sought registration of FIR in connection with the alleged irregularities in the deal.

The apex court, which began its hearing on pleas seeking a court-monitored probe into the procurement of 36 Rafale fighter jets from France, also said it was dealing with the requirements of the Air Force and would like to hear from an Air Force officer and "not the official of the Defence Ministry".

"The decision we need to take is whether to bring the fact on pricing in public domain or not," a bench headed by Chief Justice Ranjan Gogoi said.

The bench told Attorney General K K Venugopal that there is no question of any debate on pricing without making the facts public.

Defending the government, Attorney General of India, K.K. Venugopal, said: “There is no sovereign guarantee from the French Government on delivery of 36 Rafale jets but there is a Letter of Comfort from the French Prime Minister.”

Venugopal added that the government had no role in selecting offset partners for Dassault in the Rafale deal and the selection of Reliance as an offset partner was a commercial decision taken by Dassault Aviation.In the previous deal, the offset pact was signed with Mukesh Ambani’s Reliance Aerospace Technologies.

When the Court asked the Centre about the change in offset guidelines in 2015, Additional Secretary of Defence Ministry explained that as per defence offset guidelines, the offset contract runs concurrently with the main contract. Venugopal also informed the Court that Dassault has not yet submitted details of offset partner to government.

Prashant Bhushan countered this by saying that the government being unaware of the offset partner in the deal is contrary to the procedure laid down, as the norm requires the defence minister to approve the partnership.

While the Centre said that government has no role in selection of the offset partner, Justice KM Joseph asked: “If the offset partner runs off, what happens? What about the country's interest? What if the offset partner doesn't do any production?"

Centre defends secrecy clause

The Centre defended the secrecy clause related to the pricing of the 36 Rafale fighter jets in the Supreme Court on Wednesday and said it cannot divulge details of the deal.

These matters are for the experts to deal with and "we have been saying that even Parliament has not been told about the complete cost of jets", Attorney General K K Venugopal told a bench headed by Chief Justice Ranjan Gogoi.

The top law officer said the Centre has given in a sealed cover the complete details of the Rafale jets, the weapons to be fitted on the aircraft and other requirements.

The Centre on Monday had submitted to the apex court in a sealed cover, the pricing details of the Rafale jets.

Venugopal also told the apex court that the court is judicially not competent to decide what aircraft and weapons are to be bought as it is a matter for experts.

Defending the secrecy clause related to the pricing of the Rafale jets, he said,"Our adversaries may get advantages if the entire details on the pricing is disclosed." Refusing to divulge details on the pricing aspect, Venugopal said he would not be able to assist the court further on the pricing issue.

"I decided not to peruse it myself as in a case of any leak, my office would be held responsible," he said.

While the Centre was making a submission on the issue of pricing, the bench, also comprising justices S K Kaul and K M Joseph, said any discussion on pricing of the Rafale fighter jets can only take place if the facts on the deal are allowed to come in the public domain.

"The decision we need to take is whether to bring the fact on pricing in public domain or not," the bench said. The top court told the attorney general that without bringing the facts in public domain, there was no question of any debate on the pricing of the planes.

However, the bench clarified to the law officer that any discussion on price will be considered if it thinks that it should come in the public domain.

There was another light-hearted moment between CJI Gogoi and Air Marshal Chaudhari who were there to assist the SC.

In a light-hearted moment CJI Gogoi said to the officers: “The Air Marshal and Vice-Marshals can go back. It is a different war game here in court. You can go to the actual war rooms.”

During the hearing, Venugopal said at the exchange rate of November 2016, the cost of a bare fighter jet was Rs 670 crore.

India signed an agreement with France for the purchase of 36 Rafale fighter aircraft in a fly-away condition as part of the upgrading process of the Indian Air Force equipment. The estimated cost of the deal is Rs 58,000 crore.

The Rafale fighter is a twin-engine Medium Multi Role Combat Aircraft (MMRCA) manufactured by French aerospace company Dassault Aviation.

Venugopal said earlier, the jets were not to be loaded with requisite weapons system and the reservation of the government was due to the fact that it did not want to violate the clause of the Inter Government Agreement and the secrecy clause.

He also told the court that presently three countries France, Egypt and Qatar are flying Rafale fighter jets.

On the issue of lack of sovereign guarantee, the attorney general said though there is no sovereign guarantee, but there is a letter of comfort by France which would be as good as a governmental guarantee.

Attorney General Venugopal concluded his argument saying that Rafale aircrafts are potent and "had we possessed Rafale during the Kargil war, we could have avoided huge casualties as Rafale is capable of hitting targets from a distance of 60 kms".

To this the bench said,"Mr. Attorney, Kargil was in 1999-2000? Rafale came in 2014."

The top law officer replied, "I said it hypothetically".