Rafale: Why Lalita Kumari Judgment Not Applicable In This Case? Asks Justice KM Joseph [Courtroom Exchange-AG's Arguments]

Attorney General K. K. Venugopal commenced his submissions stating that the same grounds as in the original proceedings are being reiterated based on documents which he would still stay are stolen from the Defence Ministry.

Indicating an earlier judgment of the Supreme Court, he advanced,

"Where a file was taken away from the Engineering Department and returned after tampering, the court said you can't bring it to the area where the photocopy machine is and then take it back".

During the hearing of the original writ petitions in November last year, petitioner-in-person Prashant Bhushan had argued that the government has refused to disclose the pricing details of the fresh deal under the garb of the Secrecy Agreement. It was his case that the Secrecy Agreement regards not every information as classified but only that to which a particular level of security classification has been accorded. At this point, Mr. Venugopal had objected that the Secrecy Agreement is supposed to be a confidential document and questioned where Mr. Bhushan had obtained it from. He even said that no court should allow Mr. Bhushan to read it. Mr. Bhushan asserted that he has extracted the Agreement from a book published in 2008 with the government's permission.

Justice KM Joseph, Judge, Supreme Court of India [LiveLaw]

 Even on Friday, former Cabinet Minister and another petitioner-in-person Arun Shourie submitted that he was astonished when the AG had said the aforesaid as at that moment he himself had a copy of the entire agreement downloaded from the website of the External Affairs Ministry from a book called 'India's Foreign Relations, 2008".

In response, the AG argued,

"Price is covered under Article 10 of the Inter-governmental Agreement (IGA) which is dated September 23, 2016, while the document produced by them is of 2008...Both countries had agreed that it (the agreement of 2008) will be the basis of secrecy whenever any contract is entered into"

Then he proceeded to read out excerpts from the CAG report affirming that the price under the new deal was in fact 2.86% less than the Audit Aligned Price and even the cost of the services, equipment etc was less and so was the cost of the India-specific Enhancements.

"The word 'fraud' is being thrown around. The entirety of the documents was not supposed to be disclosed. The government is entitled to keep the defence materials under cover. Your Lordships wanted the procedure to be followed, we gave you the entirety of the procedure. For the respect of the court, we produced the CAG report, the pricing details! A mistake in interpretation cannot be the basis of the review of the judgment!....where did Hindu get this ('secret' Defence Ministry file-noting)? They must explain! Is the government to be exposed in the purchase of combat aircraft important for the safety and security of the country!", contended the AG.

"Will Your Lordships undertake the entire exercise from the bottom to the level of the PM? In 2000, the Air force said they want 156 combat aircrafts. Until 2007, debates were going on and finally in 2007, a tender was issued and 6 manufacturers were shortlisted. From 2007 to 2015, the exercise of going into each and every aspect was carried out to decide who to select. Eurofighter could not compare to Dassault. In 2015, the whole matter was reviewed. M/S Dssault was not L1 and hence, the contract could not be concluded and Eurofighter was not found compliant...After the years from 2007 to 2015, this was a great setback! When you start the RPF again, another 5-7 years would be gone in it! Considering what is happening in India, it is not for ornamentation but very important for the protection of each one of us! No court in the world would go into the question of whether this or that aircraft to purchase!", he urged.

Justice K. M. Joseph questioned the AG on the petitioner's reliance on the Constitution bench judgment in Lalitha Kumari (2013) requiring the registration of an FIR if the complaint prima facie reveals the commission of a cognizable offence.

"Look at the basis on which CBI investigation is sought. That 3 out of 7 members of the Indian Negotiating Team (INT) raised some concerns? Each of them was answered by the CAG! We put out answers in the counter-affidavit! Now they are seeking 9 documents from us? If they had a prima face case, would they have asked us to produce the defence files?... Your Lordships are not the CAG. This is not a contract for building a highway or a dam!", offered the AG in response.

"Judicial review of the contract is different. But the question is if the law relating to the registration of FIRs in Lalitha Kumari has to be followed", pressed Justice Joseph.

Indicating two precedents, the AG replied that the right of inquiry is conditioned on a prima facie case while the petitioner are asking for documents to build up a prima facie case.

"There has been much song-and-dance about HAL (which was supposed to manufacture over 100 Rafale jets indigenously under the earlier deal). As already said, the number of manhours they required were 2.5 times more than Dassault in France. More than double! We didn't know when we would get the delivery!", he continued.

"What about the advantage to the country by the Transfer of Technology?", asked Justice Joseph.

"And who is to decide that the Technology Transfer was more advantageous? The court? The aircrafts made by HAL would not have been warrantied by Dassault! What would happen to the lives of the pilots?...after so many years, both Eurofighter and Dassault were found to be non-compliant. We had to start again. So the head of the government said to procure them directly, some of which are due to come by September this year", asserted the AG.

Further, he advanced that even in the contracts signed with Rosoboronexport of Russia, the requirement of Bank Guarantee is waived off in view of the assurance provided through a "Letter of Comfort‟ by the government of the Russian Federation. Similar are the Foreign Military Sales (FMS) cases with the US government. He sought to make the point that the decision to do away with the Sovereign Guarantee from the government of France in the Rafale deal was not unprecedented.

"But they (the petitioners) said these companies in Russia and the US are government companies?", inquired Justice Joseph.

"We haven't said that. Unless Your Lordships know...", remarked the AG.

"If the CBI is to file a FIR, would we be able to proceed with the contract?...Nothing else apart from 'fraud' has been said in the review petitions", he insisted.

Next, Justice Joseph asked for the records of the continued participation in the Rafale negotiations of the 3 members of the INT who had raised concerns over the higher Benchmark price and "parallel negotiations" by the PMO.

The AG narrated that after the concerns were raised on June 1, 2016, two more INT meetings were held. The concerns raised by the members were deliberated, recorded and addressed while ensuring utmost integrity and transparency in the process, allowing opinions to be freely expressed, recorded, discussed and, if necessary, modified. Aspects pertaining to the responsibility of the French Government, pricing, delivery schedule, maintenance terms, offsets, IGA terms, etc. were discussed and negotiated with the French side during the INT meetings. Certain concerns raised by the three members were also referred to the Defence Acquisition Council (DAC). The INT report indicated better terms and conditions arrived at as a result of negotiation as compared to 126 MMRCA case and achievements of Negotiating Team.

"I don't know if you noticed but the then Joint Secretary & Acquisition Manager (Air) was one of the three signatories to the note bringing out the concerns. The same Officer subsequently processed the case in the MoD and signed the note for CCS (Cabinet Committee on Security) approval", stressed the AG.

"You are going into it as if it is a contract to lay down a road or a bridge. It is a defence contract. There are many other things involved. If you ask whether you have the jurisdiction (to go into said records), I would say no. If you still ask me to produce them, I will. You are being taken in by these incomplete leaks. They (the media) should never have placed their hands on these (notings). They have stolen documents and I have proved this by Your Lordships' judgment", he averred.

"There are, however, certain areas of governmental activity, national security being the paradigm, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the Government's claim is bona fide. In this kind of non­justiciable area judicial review is not entirely excluded, but very limited", he quoted resting his case.