Rafale deal: Supreme Court says it needs to decide if pricing details should be made public

The Supreme Court said pricing details of Rafale jets could only be discussed after it decides on whether to make it public, and reserved its order on Wednesday on pleas seeking court-monitored probe in the multi-billion deal amidst the government's vehement opposition to the public disclosure.

The observation by apex court bench, headed by Chief Justice Ranjan Gogoi, came after the government refused to publicly divulge pricing details of the deal, saying it would give advantage to India's enemies.

Hearing a bunch of pleas alleging criminality in Rafale deal and seeking court-monitored probe into it, the apex court asked wide-ranging questions from the government on issues including lack of sovereign guarantee from the French government, selection of Indian offset partner by the Dassault Aviation and need of entering into Inter-Governmental Agreement (IGA) with France.

The three-judge bench took note of submissions and counter arguments on pricing of the fighter jets with the petitioners alleging that the government has been giving "bogus arguments" and "hiding behind the secrecy clause".

"The decision we need to take is whether to bring the fact on pricing in public domain or not," said the bench, which also comprised justices S K Kaul and K M Joseph.

Vehemently defending non-disclosure of price publicly, Attorney General K K Venugopal said the cost of a bare Rafale jet as per 2016 exchange rate was Rs 670 crore and the disclosure of price of a "fully loaded" aircraft would give an "advantage to the adversaries".

"If cost of a fully loaded aircraft with weaponry and avionics will be disclosed, our adversaries would be able to know what is the nature of avionics and weapons fitted in it," he said, adding, that India cannot renegade on agreement with France to disclose confidential information about specifics on avionics and weaponry. 

Countering petitioners' argument that Parliament has been given pricing twice, Venugopal said, "We have been saying that even Parliament has not been told about the complete cost of the jets."

Petitioner lawyer Prashant Bhushan claimed the Union Law Ministry had red-flagged two issues -- absence of sovereign guarantee by France and international arbitration clause in IGA as per which the arbitration seat would be at Geneva -- but the government went ahead with the deal.

Venugopal admitted that there was no sovereign guarantee, but said that France has given a 'letter of comfort' which would be good enough as a governmental guarantee. 
He also said issues like types of aircraft and weapons needed to be bought cannot be adjudicated by a court as these were the matters to be decided by experts.

During the four-hour long hearing, the bench told Venugopal the court would want to interact with the Indian Air Force (IAF) officers instead of the Defence Ministry officials to know about the requirement of the IAF.

"We are dealing with the requirements of the Air Force and would like to ask an Air Force officer about their requirements. We want to hear from an Air force officer and not the official of the Defence Ministry on the issue," the bench said after the AG informed it that Additional Secretary of Defence Ministry was present in the court.

Later, senior IAF official Air Vice Marshall J Chalapati, alongwith other top officers including Air Marshal Anil Khosla and Deputy Chief of Air staff, Air Marshal V R Chaudhari appeared in the court and the CJI interacted with Chalapati over the requirements of the IAF.

During the hearing, Justice Joseph referred to the 2007 Request for Proposal (RFP) for procurement of 126 Rafale jets and observed, "The RFP was scrapped in June 2015. Then how can you (government) claim that the due process laid down earlier was followed?".

The CJI also asked Venugopal, "Is the fresh RFP required in an inter-governmental agreement for the 36 jets?". To this, he said an IGA does not require fresh RFP.
The court then asked whether the new 36 jets were same as the bare planes which were sought to be procured in 2007. "Yes", said Venugopal and added that "deliverables" are much better this time due to the time gap and improvement in technology. 

He also said that even in 2007, pricing of weaponry and avionics were not made public as claimed by the petitioners.

On the issue of offset partner, the bench asked the additional defence secretary, "What happens to the country's interests if the Indian offset partner chosen is not good enough and not able to make good the contract? What was the need to amend offset guidelines with retrospective effect?".

Responding to the query, the official said if selection of offset partner is not valid, then Dassault would run the risk of the government not accepting its decision on the offset partner and a penalty can also be imposed.

Bhushan, appearing on behalf of himself and former Union ministers Yashwant Sinha and Arun Shourie, alleged that the government was hiding behind the secrecy clause. Advocates M L Sharma, Vineet Dhanda and Dheeraj Singh, counsel for AAP MP Sanjay Singh, who have also filed petitions in the case, also advanced their arguments. 
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 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.