Rafale Review: How Did The Govt Know In Nov 2018 The Details Of CAG Report Submitted In Feb 2019? Prashant Bhushan

Review Petitioners' Arguments  seeking review of Rafale Judgment

Prashant Bhushan

"Your Lordships' judgment (of December 2018 of which review is sought) proceeds on the basis as if all of us were seeking cancellation of the (Rafale) contract. We wanted an investigation on the basis of our complaint to the CBI which is governed by the Constitution bench judgment in Lalitha Kumari- FIR has to be registered; even the preliminary inquiry has to be completed within one week to ascertain the veracity of the complaint and then FIR has to be registered...material errors of fact have crept into the judgment based on incorrect information supplied by the government in two notes- one on procedure, which was given to us, and the other on pricing which was only given to Your Lordships. There has been suppression of material facts in that note...now new information has come to light which has a vital bearing on whether there should be an investigation or not...", Advocate and petitioner-in-person Prashant Bhushan explained the grounds for review.

"Your Lordships' judgment is based on what the government told the court- that the government has already shared the pricing details with the CAG, that the report of the CAG is examined by the PAC and Only a redacted version of the report, excluding pricing details, is placed before the Parliament and in public domain. Then, the government sought to clarify that by 'is' they meant that details 'will be' given to the CAG, the CAG report 'will be' examined by the PAC and placed before the Parliament and in the public domain, and that it 'will be' redacted. I can understand if anyone in the government made a grammatical error or even the court read 'is' as something already done instead of something that 'will be' done. But never have the pricing details ever been redacted before! So how did they know in November that in the report submitted in February, the pricing would be redacted? In its 'dissent note' at the start of the audit report, the CAG says that a request was received in January to redact the commercial details but the CAG was reluctant to carry out the redaction on account of lack of precedence! But when the Defence Ministry reiterated the request citing national security concerns, the details were eventually redacted...And now the government says that the CAG report has come which declares that all is well (in the Rafale deal) and hence, the review plea should be dismissed? How can we rely on this CAG report when the government knew in advance of an unprecedented redaction from it?", he urged.

"The government told you, without an affidavit, that the CCS (Cabinet Committee on Security) had met on August 24, 2018 when everything was settled and that there were no meetings after that and the contract came to be finally signed in September. But we find there was another meeting where 8 standard anti-corruption clauses were dropped for this deal alone! The DAC (Defence Acquisition Council) met in September to approve and ratify the non-inclusion of standard DPP (Defence Procurement Procedure) clauses on arbitration, access to books of accounts, penalties for "use of undue influence" and "agents/agency commission"! This was absolutely critical because the Procedure stipulates that if you engage a middleman- if you employ a commission agent- your contract is cancelled and fine is levied! Why was this dropped? Why was the court not informed that this had transpired after August 24? Their reply affidavit is also totally silent on this! This fraud alone vitiates the judgment and calls for a thorough court-monitored criminal investigation!"

Next, he pointed out that 3 expert members of the Indian Negotiating Team (INT) had specifically objected to the final price for the whole Rafale package shooting up to 8 billion Euros while the benchmark price was determined at 5 billion Euros. Calling it "exorbitant and unrealistic", they had opined that "the reasonability of price offered by the French Government is not established".

"You said this deal would of the same configuration as the MMRCA. Now you are offering deficient jets as compared to the MMRCA and charging more in the name of India-Specific Enhancements? The three experts say you had to provide this anyway, and only at a better price!", advanced Mr. Bhushan.

On the waiver of the Sovereign/Bank Guarantee, he submitted,

"Huge amounts are to be paid to the French industrial suppliers, and not to their government, prior to the delivery...They have already paid half the price with no delivery in sight...the French side gave no Sovereign or Bank Guarantee, only a Letter of Comfort which is of no comfort whatsoever...it is part of our procedure to seek such guarantee as a risk-mitigating measure...The government says we don't also seek such guarantees from Russia. But the Russian companies are government-owned companies! Dassault is not"

He proceeded to discuss the impractical delivery schedule- in the MMRCA process, the first 18 flyaway aircraft were delivered between T0+36 months to T0+48 months whereas in the delivery schedule offered by the French side, the first 18 aircraft will be delivered between T0+36 months and T0+53 months.

"Even the delivery is being delayed as compared to the earlier deal. The logic behind the new deal was that it would speed up the delivery of the 36 jets but that is not the case", he commented.

"Should this note by 3 domain experts on critical foundational things not be revealed to the court? This is why the files of the INT need to be placed in the court. If there is something affecting national security, that could be redacted. But operational details don't affect security. And in any case, they can be shared with the court", said Mr. Bhushan.

"New things are coming up...there was the meeting of Anil Ambani (whose company became Dassault's Indian Offset Partner under the new deal) with the French Defence Minister at the time the French and Indian PM issued the joint statement announcing the 36 Rafale jets deal...a letter of October 23, 2015 from the head of the French Negotiating Team made mention of a telephonic conversation between the Joint Secretary in the PMO and the Diplomatic Adviser to French Minister of Defence...the Defence Ministry raised strong objections to 'parallel negotiations' conducted by the PMO with the French side, stating that it was clear that such parallel discussions by the PMO had 'weakened the negotiating position of MoD and Indian Negotiating Team' and that 'we may advise PMO that any Officers who are not part of Indian Negotiating Team may refrain from having parallel parleys with the officers of French Govt', and 'in case PMO is not confident about outcome of negotiations being carried out by MoD, a revised modality of negotiations to be led by PMO at appropriate level may be adopted in the case'..."

"Even the NSA, who is not in the DAC, the INT or the CCS and has no role to play, is interfering in the deal...there are so many things which show that there is more to this than what meets the eye", he continued.

Arun Shourie

In his turn, former Cabinet Minister and another petitioner-in-person Arun Shourie submitted that each of the errors which have crept into the judgment could be traced to the falsehoods suggested by the government or the truths hidden by it. Indicating the Clarification on Offset Policy issued by the MoD in September, 2018, he quoted, " Incidentally, media reports of February, 2012 suggest that Dassault Aviation, within two weeks of being declared the lowest bidder for procurement of 126 aircraft by the previous Government, had entered into a pact for partnership with Reliance Industries in Defence sector".

"Were Your Lordships told that that Reliance had nothing to do with this Reliance which has now become the (Indian Offset Partner)? The government put to you a press release about press reports. I can show you 20 such examples!", he argued.

Moving on to canvass why the Sovereign Guarantee was indispensable in the present case, he advanced that France is 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 because it found it discriminatory.

"The whole argument of the government in response to our application for production of certain documents is that this is a fishing-and-roving inquiry. But many of those documents are present in the public domain! We want the court to see the originals. If they can be shared with the CAG then why not with the court? These documents would show the details suppressed by the government in the notes submitted by them pursuant to Your Lordships' orders for details!", he concluded.