Rafale: The Game Changer

After winning the Lok Sabha election, the BJP government has done so many investments in Defence Sector like purchasing tank, weapons from Russia. In this process of investment they also improved the Air Force. Rafale was one of the best examples of this investment. India signed an agreement with France for 136 Rafale which reduced to 36 Rafale Combat flight and this became the controversial issue for since many years in our country. Rafale combat flight also became a serious controversial issue ever since the politician of opposition party suspected a big scandal worth thousand crores of rupees. In this article we will discuss about why Rafale is consider as a game changer, controversial journey of Rafale, Rafale in Supreme Court and Judgment of Rafale Case.

Introduction

On 6 March 2019 Attorney General representing the Centre in a PIL by Prashant Bhushan seeking probe into Rafale deal, told Supreme Court that journalists and lawyers who used ‘stolen’ documents of Rafale will be prosecuted[1], nation in general and media was shocked[2]. The petitioners Yashwant Sinha, Prashant Bhushan and Arun Shourie were seeking to register FIR against Prime Minister Narendra Modi and former Defence Minister Parrikar regarding this agreement with France. Earlier on December 14, 2018, Supreme Court dismissed the PIL observing that due process was followed in signing the Rafale deal, and it did not find any “commercial favouritism” in the contract. Saying that certain critical facts were suppressed from Supreme Court, which could have resulted in a different conclusion than such dismissal, the petitioners wanted a review.

The documents which media had access and petitioners relied upon include one eight-page dissent note written by three domain experts in the Indian negotiating team, and document revealing that a top defence ministry official complained about the PMO conducting “parallel parleys” with the French authorities in the controversial Rafale deal. Question is whether these policy and process related documents contain any official secret or their disclosure would benefit enemy or threaten security of nation? To threaten the journalists and lawyers with black law of British dark era will make it fully an emergency environment. It was for good that AG has retreated[3] from this stern stand and said government does not intend to prosecute them. Then Centre filed an affidavit on 13th March 2019, stating that those who leaked were guilty of penal offences including theft.

It was claimed that annexed notes were marked ‘secret’, and exempted from disclosure even under the Right to Information Act. It also raised a point under Evidence Act, saying that use of evidence derived from unpublished official records relating to the affairs of the state without permission. These contentions reflect intention to attack the review petition on technical grounds, without condemning the veracity of the contents that strengthen allegations. The facts of the case have to be considered to decide whether probe should be ordered. Second point is marking of documents ‘secret’. Which part of the deal is secret, and why? The Centre has a duty to explain how a dissent note from three negotiators in Rafale deal would pose clear and present danger to ‘security’ or that the public interest will be secured if these secrets are not disclosed or that public interest will be seriously harmed on disclosure.

Rafale defence deal is the centre of political storm in pre-2019 election scenario, wherein the centre is depending on secrecy under OSA and nondisclosure under RTI Act. It is a common habit of executive governments to call almost all papers as ‘classified’ or secret. For secrecy, the document should be properly classified as ‘official secret’. The Centre did not show when and how the ‘stolen’ Rafale deal documents were classified. The centre should have informed the apex court, if it has appropriately classified any of the Rafale deal documents along with the criteria. If there is no such classification till 6th March 2019, the day the apex court heard the case, it cannot do thereafter.

Representing the Centre, the Attorney General Mr KK Venugopal told the Supreme Court on 6 March 2019 that certain documents like dissent note by three of a seven-member negotiation team for the Rafale deal pertaining to the purchase of the fighter jets have been ‘stolen’ from the defence ministry by “present or former employees” and pleaded not to take cognisance of it to review SC decision or to order CBI probe[4]. He argued that the notes published in a newspaper and annexed in the review petition are “privileged” and cannot be taken note of. Mr. Venugopal referred to the lead article in the Hindu on March 6, saying ‘sensitive’ information like the price of the weapons was put in the public domain. The government had invoked ‘national security’, ‘official secrecy’ and privilege to block the probe sought in a Public Interest Litigation. ‘Sensitive’ nature of information is neither a defence nor exception to disclosure as per the RTI Act & OSA.

Attorney General questioned how ‘the Hindu’ daily had published “only the first file noting” in reference to the Ministry’s objection to “parallel parleys” by the Prime Minister’s Office with French authorities over the Rafale deal, while the second file noting by former Defence Minister Manohar Parrikar, terming the note as an “over-reaction”, was published by a news agency, Asian News International (ANI) and termed these documents with these two media houses as “stolen documents.” He contended that the documents are procured through a criminal act and are punishable under Official Secrets Act. It should be dismissed on this very ground as the petitioners have not come to the court with clean hands. He also informed the apex court that an investigation has been ordered and prosecution would be launched against the two papers and the lawyer who has annexed it with the petition[5].

The bench with its piercing questions punched holes in this contention. Justice Joseph from the Bench of SC hearing the review petition asked: “Mr. Attorney, you keep repeating about national security. Suppose a great crime like corruption has been committed, can you seek shelter under national security?” The AG then invoked the ‘security’ of the State to defend non-disclosure.

 Justice Joseph again asked: “But if the law of the country has been broken through a corrupt practice, can you seek protection under national security?” Referring to the Bofors case, Justice asked: “in an open system like in India, whether courts should shut out documents?”. Chief Justice Ranjan Gogoi questioned: “If the documents are stolen, what action you (Centre) have taken till now? The first publication was in February, what have you done?”

Justice Joseph further observed: “Our judgments say that even stolen evidence can be looked into, if found relevant… Mr. Attorney, you have to state the law. You are not stating the law, we are sorry to say.” The CJI further said “a man is about to be wrongly convicted of a crime. There is a document in the possession of another man which will prove his guilt. He steals it from this man and produces it in court. Do we, the court, refuse to look into the document? We can understand you saying that petitioners came with unclean hands. But it is another thing to say that the court cannot consider these documents at all. That these documents are untouchable.”

Third Judge on Bench Justice SK Kaul sought to know from AG: “We may not utilise these documents, but it is bit too much to say that they should not be relied on at the very threshold.” Mr. Venugopal responded that court should not look into documents which are the “subject matter of criminality”. He stated that the Rafale controversy was political in nature and judiciary should exercise restraint.

Countering the arguments of AG, the petitioner Mr Prashant Bhushan alleged that AG has committed contempt of court by attempting to intimidate petitioners with criminal prosecution for placing ‘incriminating documents’ before the court. He also alleged that Comptroller and Auditor General had succumbed to government pressure and redacted pricing details from the audit report. He said: This is the first instance in CAG history to have redacted pricing details from the audit report of a deal. Prashant Bhushan has earlier produced secret documents relating to 2G scam and coal block allocation scam in the Supreme Court, which was not opposed on such grounds.

Controversial Journey of Rafale

A bench of three Justice, comprising Chief Justice Ranjan Gogoi, Justice Snjay Kishan Kaul, and Justice K M Joseph found the review petitions as “without merit”.

  • On 30th December, 2002: Defence Procurement Procedure (DPP) adopted to streamline process.
  • On 28th August, 2007: Defence Ministry issued a request for Proposal for procurement of 126 Medium Multi-role Combat aircraft fighters.
  • On 4th September, 2008: Anil Ambani-led Reliance Group incorporates Reliance Aerospace Technologies Ltd. (RATL).
  • On May, 2011: Air Force has shortlisted Rafale and Euro fighter jets.
  • On 30th January, 2012: Dassault Aviation’s Rafale aircraft comes up with the lowest offer.
  • On 13th March, 2014: Work Share agreement between HAL and Dassault Aviation under which they were responsible for 70 percent and 30 per cent of the work, respectively, for 108 aircraft.
  • On 8th August, 2014: Then defence minister Arun Jaitely tells Parliament that 18 direct ‘fly-away’ aircraft expected to be delivered in 3-4 years from signing of the contract, remaining 108 aircraft to be delivered in the next seven years.
  • On 8th August, 2015: Then foreign secretary says detailed discussions underway between Dassault, MoD and HAL.
  • On 10th April, 2015: New deal for acquisition of 36 direct ‘fly-away’ aircraft from France announced.
  • On 26th January, 2016: India and France sign MoU for 36 Rafale aircraft.
  • On 23rd September, 2016:  Inter-governmental agreement signed.
  • On 18th November, 2016: Government states in Parliament that the cost of each Rafale aircraft to be approximately Rs. 670 crore and that all aircraft will be delivered by April 2022.
  • On 31st December, 2016: Dassault Aviation’s Annual Report reveals the actual price paid for the 36 aircraft at about Rs. 60,000 crore, more than double the government’s stated price in Parliament.
  • On 13th March, 2018: PIL in SC seeks independent probe into Centre’s decision to procure 36 Rafale fighter jets France and disclosure of the cost involved in the deal before Parliament.
  • On 5th September, 2018: SC agrees to hear on October 10 fresh PIL seeking direction to Centre to file in ‘sealed cover’ the details of the agreement for buying 36 Rafale fighter jets.
  • On 8th October, 2018: SC asks to hear on October 10, fresh PIL seeking direction to Centre to file in ‘sealed cover’ the details of the agreement for buying 36 Rafale fighter jets.
  • On 10th October, 2018: SC asks Centre to provide details of decision-making process in the Rafale fighter jet deal in a sealed cover.
  • On 24th October, 2018: Former Union Minister Yashwant Sinha and Arun Shourie and activist-lawyer Prashant Bhushan moves SC, seeking registration of FIR into Rafale jet deal. 
  • On 31st October, 2018: SC asks Centre to place it in sealed cover within 10 days the pricing details of 36 Rafale fighter jets.
  • On 12th November, 2018: Centre places price details of 36 Rafale fighter jets in a sealed cover before SC; it also gives details of steps that led to finalisation of the Rafale deal.
  • On 14th November, 2018: SC reserves judgment on pleas seeking court-monitored probe in Rafale deal.
  • On 14th December, 2018: SC says there is no occasion to doubt the decision-making process of the Modi government and dismisses the entire petition seeking direction to the CBI to register an FIR for alleged irregularities in the jet deal.
  • On 2nd January, 2019: Sinha, Shourie, and Bhushan moves SC seeking review of its December 14 judgment.
  • On 26th February, 2019: SC agrees to hear review petition in open court.
  • On 13th March, 2019: Government tells SC that documents filed by review petitioners are sensitive to national security.
  • On 10th April, 2019: SC dismisses Centre’s objection claiming privilege over documents by petitioners to seek review. 
  • On 12th April, 2019: BJP MP Meenakshi Lekhi moves SC against Rahul Gandhi for wrongly attributing his ‘chowkidar chor hai’ remarks on Rafale to the apex court.
  • On 23rd April, 2019: SC issues contempt notice to Rahul Gandhi for his remarks on Rafale verdict. 
  • On 8th May, 2019: Gandhi tenders unconditional apology in SC.
  • On 10th May, 2019: SC reserves verdict on review pleas and contempt petition.
  • On 14th November, 2019: SC dismisses review pleas against its verdict in the Rafale deal, rejects contention that there was need for registration of an FIR in connection with the procurement of 36 fighter jets from French firm Dassault Aviation.

It was anticipated that after conclusion of contract and commercial negotiations, the contract would be signed by March 2013. However with the Defence Budget for FY 2012-13 having already been exhausted, the conclusion of the contract got delayed. Also due to an impending change in the government in India, the same was further delayed. This delay resulted in M/s Dassault Aviation expressing their inability to hold their price, which from the estimated cost of US $ 12 Billion in 2007 was raised over 100% to US $28-30 Billion approx in Jan 2014.

Another hitch that occurred during the course of negotiations was that neither Dassault Aviation nor HAL, which was to produce the Rafale Jets in India as part of Transfer of Technology agreement, were willing to issue written guarantees on delivery schedules, a condition which the MoD insisted upon before signing the contract. Dassault remained unwilling to be held liable for the 108 Rafales to be manufactured under licence by HAL. These two issues of pricing and the guarantees resulted into a continued deadlock in the contract negotiations.

In the meanwhile the holding of Fighter Squadrons in Indian Air Force had reached a critical stage with only 34 functional Fighter Squadrons. With a minimum acceptable strength for a two front war being 39.5 Squadrons and an ideal being 44, the present strength of 34 Squadrons was indeed a cause for concern. Budgetary constraints resulting in non refurbishment of the planes held and non induction of new planes has resulted in further depletion of combat potential of IAF. With most of the fleet being from erstwhile USSR, the breakdown of USSR had posed additional challenges in maintaining the serviceability of the Fighter Fleet of IAF and thus was resulting in alarmingly high rate of air crashes.

With this as the background, India’s Prime Minister, Mr Narendra Modi and French President Mr Francois Hollande, on 10 April 2015, reached an agreement of direct purchase of 36 Rafale Fighter Jets in a fly-away condition as a Government to Government (G2G) deal. This announcement, while on the one hand has indeed infused a new steam into a critical procurement case which had more or less run into a stalemate, on the other hand, has brought in a viewpoint which is questioning the wisdom behind bypassing the laid down Request for Proposal route with the so called ‘Out of the Box Thinking’ of a G2G agreement. 

The issues being raised that question the move of the Indian Prime Minister in fact appear to be knee jerk reaction in nature; there appears to be ignorance of provisions of the procurement policy and how higher decision making is made for deals of this stature. The G2G provision evoked here is part of India’s Defence Procurement Procedure (DPP) and is provided for at Para 71 and 72 of DPP 2013, as ‘Inter Government Agreement’. Hence it is very much thinking from within the box and an accepted norm as per the DPP. There have been protracted discussions to find a way forward for this operationally critical deal over last 11 months, in which the French Defence and Foreign Ministers have visited India and met the Indian Defence Minister. Also the French Ambassador to India Mr Francois Richier has been in an active dialogue to resolve the outstanding issues and India’s MoD had constituted four sub-committees from within the Contract Negotiation Committee (CNC) to find a way forward. Hence this decision by the Government of India to go in for a G2G Agreement is a decision taken with a strong geopolitical and strategic understanding after obtaining firm commitment from the French Government of safe-guarding Indian interests.

What needs to be understood is that the announcement by the Prime Minister is a general direction for the way forward. The fine print of the agreement has to be worked out to our advantage. The economic clout of the Medium Multi-Role Combat Aircraft deal, which at times is also called a mother of all defence deals, needs to be leveraged to further the interests of the Indian side and hence the best of brains in the Defence Procurement business need to sit down together to work out a draft agreement that we need to propose to the French Government. Certain issues that need to be asserted in this proposed agreement are given as under:-

  • The provisions of Para 72 of DPP 2013 need to be understood in the correct perspective. These provisions clearly state that the Agreement is expected to safeguard the interests of Govt of India and hence there is no embargo on asking for transfer of technology or seeking of offsets. The provisions read as under:-
    • In cases of large value acquisition, especially that requiring product support over a long period of time, it may be advisable to enter into a separate Inter Government Agreement (if not already covered under an umbrella agreement covering all cases) with the Govt of the country from which the equipment is proposed to be procured after the requisite inter ministerial    consultation. Such an Inter Governmental Agreement is expected to safeguard the interests of the Govt of India and should also provide for assistance of the foreign Govt in case the contract(s) runs into an unforeseen problem.
  • To have uniformity in the maintenance infrastructure in terms of spare parts, workshops and depots, it is essential that the remaining requirement of 90 MMRCA is also met with Rafale Fighter Jets. However the present Agreement should be so structured that it involves the Transfer of Technology to HAL and other selected Indian Private Defence Industry to enable indigenous licensed production for future requirements. 
  • The transfer of Technology should ensure provision of all critical technologies and should include the provision of software source codes, which will allow DRDO/ Indian Production Agency to re-programme the weapon systems and equipment on board/ on ground. Without the software source codes, India would have to fall back to OEM to enable configuration of the weapon systems and equipment as per own mission profiles and thus seriously compromise the national security besides increasing dependence on the OEM at all times..
  • An in depth analysis for setting up the production facility at HAL for licensed production and for Indian Private Defence Industry should be carried out in consultation with DRDO and the same should be included in the Agreement as part of Transfer of Technology. A special focus on setting up of infrastructure for the desired life-cycle support and the associated cost should be ensured while drafting the proposed contract.
  • An offset clause of 50% was built into the RFP issued in 2007. In the proposed G2G Agreement, an offset clause of minimum 30% should be factored in. This will ensure the required push to the ‘Make in India’ programme. Dassault was already in a dialogue with Reliance Industries to set up a plant to manufacture the wings for this project to be set up at Bangalore. An impetus can be given to the same project in consultation with Department of Defence Production. The present procurement of 36 Rafale Jets including the support infrastructure is likely to cost approx US $ 7.5 Billion and hence the value of the offsets is likely to be US $ 2.25 Billion. A proper road map needs to be prepared to absorb this substantial value addition by the Dept of Defence Production, taking all stake holders on board.
  • It is agreed that as a norm there are no commercial negotiations on a G2G route and since there is no competitive bidding and thus the foreign government is free to quote a price of their choice. However in this case, a price quoted by Dassault is available in competitive bidding environment on the RFP route. Hence the same can be used as a base price to leverage the French Government to offer a favourable price lower than the one already quoted by Dassault.
  • Since the quantities of direct purchase in fly away condition have been doubled from 18 in the RFP to 36 as per the announcement made for the G2G deal, this becomes an apt case for taking a price advantage on account of ‘Economy of Scales’. A further price reduction from 5 to 10% on the price quoted on the RFP route can be asked for from Govt of France.

Conclusion

India is a democratic Country. Right to speak, Right to Information is our fundamental right. But nowadays, people are misusing this. This is not the correct time to blame each other especially when our country is already fighting with so many issues. Our freedom fighters had only one dream; to maintain peace and security in our country. But some of our politicians always try to break this bond just to meet their personal benefit. We are aware of how politics and corruption go hand in hand.

But when the question rose against the defence sector then nothing can be more shameful than this. We know it is because of the army we sleep at night peacefully. But this type of question can decrease the morale of our soldiers. We all know how Rafale can play an important role in our security purpose. The technology which is used in Rafale was more advanced as compared with top fighter jets in the world, that’s why our government signed an agreement of 36 Rafale from France.  And India is not the first country in the world who signed this agreement with France; earlier Afghanistan, UAE has also purchased Rafale. Still we don’t know why such political acts form a barrier whenever any deal or treaty is signed between two or more countries in the world for our security.


[1] https://www.reuters.com/article/us-india-dassault-court/india-may-prosecute-newspaper-under-secrets-act-over-rafale-documents-idUSKCN1QN292

[2] https://www.thequint.com/news/india/n-ram-official-secrets-act-journalists-politicians-reactions

[3] https://www.livelaw.in/top-stories/didnt-say-that-rafale-documents-were-stolen-meant-petitioners-used-photocopies-of-secret-documents-ag-clarifies-143428

[4] https://timesofindia.indiatimes.com/india/stolen-rafale-documents-must-not-be-looked-into-ag-tells-sc/articleshow/68295070.cms

[5] https://www.thehindu.com/news/national/secret-papers-on-rafale-deal-stolen/article26450436.ece

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