SC Reserves Verdict In Rafale Review & Contempt Petition Against Rahul Gandhi

The Supreme Court today reserved verdict in the petition seeking review of the December 14 judgment which had declined to order probe into the alleged corruption in the deal to procure 36 Rafale aircraft from French company Dassault aviation.

An application filed by the review petitioners seeking perjury proceedings against government officials who had allegedly suppressed information from Court was also considered along with the review.

Also, the Court reserved verdict in the contempt petition filed by BJP leader Meenakshi Lekhi against Congress President Rahul Gandhi for remarking that Supreme Court had found "chowkidar chor hain" in its April 10 verdict in Rafale preliminary objections.

Arguments

Prashant Bhushan, one of the petitioners, said that there were two grounds for review:-

• That the December 14 judgment proceeded on the wrong basis that the petitioners were seeking cancellation of the deal, failing to consider that the petitioners were actually praying for a court monitored probe into the corruption in it.
• That the judgment is based on incorrect and incomplete facts supplied by the Government.

Bhushan referred to a document purported to be a note from the Ministry of Defence regarding "eight last minute changes" that were approved by the Defence Acquisition Council. Based on this document, he said that Cabinet Committee on Security met in September 2016 to drop standard clauses in the deal pertaining to use of undue influence, agents/agency commission and access to books of accounts of industrial suppliers, which are usually included in procurement deals to ensure transparency and probity. The fact that standard anti-corruption clauses have been unusually dropped from the agreement by itself points to the need for criminal investigation, he argued. Even the latest reply filed by the Govt is silent on why the standard anti-corruption clauses were dropped from the agreement.

Bhushan next said that the Government has not supplied full information regarding decision making process. He highlighted the dissent of three members out of the 7 member Indian Negotiating Team, whereby they had flagged the issue of inflated benchmark price. The benchmark price was fixed at 5 billion euros; but in the final deal the price increased by 55.6% above the benchmark. The sovereign guarantee clause was dropped despite objections from the members of INT. The deal was finalised with a letter of comfort from the France, which is as good as no guarantee.

Centre's failure to inform the court about the INT members' dissent is by itself a ground for reviewing the judgment. He also pointed out that the Government had not initially revealed to the Court that the Prime Minister's Office was involved in the negotiation process. Though in the affidavit subsequently filed, the Government has sought to underplay it as a "monitoring by PMO", it was actually a "parallel negotiation", which weakened India's bargaining power considerably, and undermined the advantageous position, argued Bhushan.

He also submitted that around the time of the deal, Anil Ambani had met the French defence minister, and had produced a film for his wife; Ambani was also given a huge tax exemption. All these aspects require a probe to see if there was any quid pro quo in the offset partner selection, argued Bhushan. 

These facts have not been disclosed to the Court. Concealment of crucial information amounts to fraud : Bhushan @pbhushan1 #Rafale #RafaleReview

— Live Law (@LiveLawIndia) May 10, 2019

Arun Shourie argued the perjury application and said that "each of the errors in the judgment can be traced to the false submissions made by the Government".

The Attorney General countered by saying that the petitioners were in effect repeating their arguments in the writ petition, which is impermissible in a review. The AG cautioned the Court that it was a defence deal, which cannot be easily subjected to judicial review.

"So far as the price is concerned, it is covered Article 10 of the inter-government agreement. Pricing under Article 10 was not supposed to be discussed in public domain", AG said.

When Justice K M Joseph asked why no action was taken as per the Lalithakumari decision on the petitioners' complaint, the AG replied that no prima facie case was made out.

Justice Joseph further quizzed AG about lack of transfer of technology in Rafale deal unlike previous deals. AG replied that Court cannot decide technical aspects of the deal.

On the bench probing about the waiver of sovereign guarantee, the AG said that it was not an unprecedented practise and cited the examples of Inter Governmental Agreements with

Russia and USA without sovereign guarantee.

"It is a question of national security. No other court in the world will examine a defence deal on these kinds of arguments", AG asserted.

Contempt against Rahul Gandhi

After the arguments in review petition were over, the Court took up the contempt plea against Rahul Gandhi.

Senior Advocate Mukul Rohatgi argued that the apology expressed by the Congress president was belated and not sincere. He had led the public astray by saying that the Court had said "chowkidar chor hain".

In response, Dr A M Singhvi clarified that Gandhi had acknowledged his mistake in attributing the remarks to the Supreme Court and had expressed regret in the very first affidavit filed even before the issuance of notice. Rahul Gandhi stands by his political slogan but apologises for attributing the remark to the SC, Singhvi said.

Background

On April 10, the SC had decided to hear the review on merits,rejecting the preliminary objections raised by Centre regarding admissibility of documents produced by petitioners

The review petition is filed by Advocate Prashant Bhushan and former Union Ministers Yashwant Sinha and Arun Shourie for reviewing the December 14 judgment which had declined to order probe into the alleged corruption in the deal to procure 36 aircraft from French company Dassault Aviation.

They argue that the Court, instead of dealing with the original prayer for registration of FIR and investigation by CBI, reviewed the merits of the decision making process in the deal, without having adequate facts before it. The Court had relied on the incomplete and erroneous information supplied by the Government through sealed cover envelopes, leading to "patent factual errors" in the judgment, submit the review petitioners.

Later, the review petitioners produced in the Court the reports published by N Ram in The Hindu, which had claimed that there were several discrepancies in the deal process.

According to the petitioners, the Government's submission that the entire negotiations were handled by the Indian Negotiating Team is discredited by the revelation made by The Hindu that Prime Minister's Office(PMO) held "parallel negotiations" with the French side, much to the objections of some of the officials of the Ministry of Defence. That the PMO intervened in the negotiations stands admitted by the statements of the then Defence Minister Mohan Parikkar, the petitioners state.

The finding of the Court that negotiations by Indian Negotiating Team(INT) arrived at better terms relating to "price, delivery and maintenance", is based on erroneous and incomplete facts, say the petitioners. Referring to the dissent of three officials of the INT, which was reported in "The Hindu", they submit that the interventions by the PMO led to the dilution of the several important clauses in the deal, like waiver of sovereign guarantee, non-insistence of payment in escrow account and incorporation of arbitration at Geneva as means of dispute resolution.

Claiming that these were privileged documents which were accessed by media without authorization, the Centre had objected to the Court relying on them.

The SC however overruled the Centre's arguments based on Official Secrets Act and national security and held that the "right of such publication would seem to be in consonance with the constitutional guarantee of freedom of speech".

On Saturday, the Centre filed a counter-affidavit stating that "monitoring of the process by PMO cannot be regarded as interference or parallel negotiations". The Government has also said that the contentions of the petitioners were based on selective leaks in media.

Correction application and Perjury petition

The Government's note submitted on November 12 stated that the pricing details have been already shared with the CAG, and the CAG report "is examined by the PAC, and a redacted version of the report is placed in the Parliament". Based on this, the Court refrained from examining the pricing details of the deal, on the premise that they have been examined by the CAG and PAC. Since the CAG report was not existing at the time of judgment, the apex court's references to such a report in the judgment led to huge controversy. This led to the Government filing a "correction application" on the next day of judgment, saying that the references to the CAG report were based on misinterpretation of grammatical tenses.

The petitioners have also filed a perjury application seeking criminal prosecution against officials who allegedly misled the Court. Countering this, the Defence Ministry has filed an affidavit stating that the application is wholly "misconceived" and is based on incomplete file notings and selective media leaks.