Petitioners Yashwant Sinha, Arun Shourie and Prashant Bhushan filed a rejoinder to the counter-affidavits submitted by the Government of India on the Rafale review petitions, on Thursday, 9 May.
The central government had filed its rejoinders on 4 May, reiterating that all relevant procedures were followed for the Rafale deal, in which India purchased 36 multi-role fighter aircraft from the French firm Dassault Aviation.
The government cited the Comptroller and Auditor General of India (CAG) Report on Capital Acquisitions in the Indian Air Force, which included a whole section on the Rafale deal.
It also contested the application by the petitioners asking for official versions of the government documents revealed by journalists like N Ram to be produced in court, claiming that this was a ‘roving & fishing inquiry’ (a vague, non-specific inquiry to access incriminating evidence).
The Issues Raised by the Petitioners
The review petitions seek to show that the procurement for the final deal “suffered from various problems” and the Centre misled the judges on these issues. The issues raised are:
- The Acceptance of Necessity (AON), a requirement under the Defence Procurement Procedure (DPP), was granted on 13 May 2015 – which was after the deal was announced on 10 April 2015.
- Officials in the Prime Minister’s Office (PMO) conducted “parallel negotiations” with French officials while the official Indian Negotiating Team (INT) was negotiating the deal. This was not mentioned in the sealed cover note provided by the Centre to the Supreme Court.
- The Law Ministry and Defence Ministry had raised objections to the removal of ‘Standard Clauses’ of the contract including those on sovereign guarantee and seat of arbitration (a particular jurisdiction/location to which the arbitration is bound)– which they considered necessary for the deal since it was supposed to be an Inter-Governmental Agreement.
- The domain experts who were part of the INT raised “strong objections” against, among other things, the increased benchmark price, delivery schedule, absence of sovereign guarantee, seat of arbitration choice and provisions in the offset contract (which determines the additional trading agreements between India and France).
- A “surreptitious amendment” was introduced in the Technical Offset Proposal (which allowed the French companies to not disclose offset partners at the outset or get them vetted) which was against public interest and contradicted requirements at the time.
On the Centre’s Reliance on the CAG Report
The rejoinder also contests the Centre’s reliance on the CAG report, pointing out that:
- The CAG admitted that there is no precedence for redacting commercial details from an audit, which was the case with the Rafale report.
- The report is silent on the ex post facto AON, the parallel negotiations and the dropping of standard clauses.
- The report is also silent on the irregularities with the offset contract.
- The report “concedes” that the waiver of the bank guarantee requirement led to a saving for Dassault instead of the Defence Ministry – but doesn’t take this into account when assessing whether the new deal was cheaper or not.
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