Rafale Deal | No substantial record to show that this is a case of commercial favouritism: SC

“Perception of individuals cannot be the basis of fishing and roving enquiry by the Court.”

Supreme Court: A Bench comprising of CJ Ranjan Gogoi and S.K. Kaul and K.M. Joseph, JJ. dismissed the petitions pertaining to seeking probe in ‘Rafale Deal’ by stating that “we find no reason for any intervention by this Court on the sensitive issue of purchase of 36 defence aircrafts by the Indian Government.”

The present judgment given by the 3-judge bench of the Supreme Court dealt with 4 writ petitions in regard to procurement of 36 Rafale Fighter Jets for the Indian Airforce. 

Background Note:

In June, 2001, an in-principle approval was granted for procurement of 126 fighter-jets to augment the strength of the Indian Airforce. A more transparent Defence Procurement Procedure (DPP) was formulated in the year 2002, further in the year 2005 a robust ‘offset clause’ was included in the DPP in order to promote Indigenisation which was followed by Services Qualitative Requirements (SQRs) in the year 2006. Later in the year 2007, Defence Acquisition Council (DAC) granted ‘Acceptance of Necessity’ for procurement of 126 medium multi role combat aircrafts.

Bidding process commenced in August, 2007 and the proposals were followed by technical and field evaluations; a Staff Evaluation Report and a Technical Oversight Committee Report. Commercial bids were opened in November, 2011. Dassault Aviation was placed as the L-1 by January 2012. Negotiations commenced and continued but without any final result.

It has been stated that a process of withdrawal of the Request for Proposal in relation to the 126 MMRCA was initiated in March 2015, which was finally withdrawn in June 2015. Negotiations were carried out and the process was completed with the approval of the Cabinet Committee on Security (CCS). Further, contract along with Aircraft Package Supply Protocol; Weapons Package Supply Protocol; Technical Arrangements and Offset contracts was signed in respect of 36 Rafale Jets on 23-09-2016 which were to be delivered from October, 2019.

Triggering Point for the present Writ Petitions:

In September, 2018, certain newspapers reported a statement made by the former President of France, Francois Hollande, to the effect that the French Government were left with no choice in the matter of selection of Indian Offset Partners and the Reliance Group was the name suggested by the Government of India, which seems to have triggered the present petition.

Court’s Analysis & Decision:

The Bench noted that, it would be appropriate, at the outset, to set out the parameters of judicial scrutiny of governmental decisions relating to defence procurement. Referring to the decision in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, Court held that “it was not to exercise the power of judicial review even if a procedural error is committed to the prejudice of the tenderer since private interests cannot be protected while exercising such judicial review.” It was also stated by the Court that various judicial pronouncements from Tata Cellular v. Union of India, (1994) 6 SCC 651, emphasise the aspect that scrutiny should be limited to the Wednesbury Principle of reasonableness and absence of mala fides or favouritism.

Coming to the present issue, it was stated that it is a defence tender for procurement of aircrafts. The parameter of scrutiny would give far more leeway to the Government, keeping in mind the nature of the procurement itself, and the said aspect was highlighted and emphasized in the decision of Siemens Public Communication Networks (P) Ltd. v. Union of India, (2008) 16 SCC 215. Therefore, “the extent of permissible judicial review in matters of contracts, procurement, etc. would vary with the subject matter of the contract and there cannot be any uniform standard or depth for the same.”

Hence, the Court scrutinised the controversy raised in the writ petitions which primarily raise 3 broad areas of concern, namely, 

  1. decision-making process; 
  2. difference in pricing; and
  3. the choice of IOP.

On a careful consideration of every aspect of the above-stated issue and concerns, the Court extended its’ view by stating that they interacted with the senior Air Force Officers who answered Court queries including that of the acquisition process and pricing. To which the bench stated that there is no reason to really doubt the process and further they were informed that there is financial advantage to our nation.

“We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircrafts in place of 126 and cannot possibly compel the Government to go in for purchase of 126 aircraft.”

“Our country cannot afford to be unprepared/ underprepared in a situation where our adversaries are stated to have acquired not only 4th generation, but even 5th generation aircrafts, of which, we have none. It would not be correct for the Court to sit as an appellate authority to scrutinize each aspect of the process of acquisition.”

In regard to the pricing issue, the Court stated that it is certainly not the job of the Court to carry out a comparison of the pricing details in matters like the present. We say no more as the material has to be kept in a confidential domain.

Lastly, the Court stated that it is neither appropriate nor within the experience of the Supreme Court to step into the arena of what is technically feasible or not. According to the Court, there was no substantial record to show that this is a case of commercial favouritism.

Thus, the writ petitions were dismissed and held that there is no reason for any intervention by the Supreme Court on the sensitive issue of purchase of 36 defence aircrafts by the Indian Government.[Manohar Lal Sharma v. Narendra Damodardas Modi, 2018 SCC OnLine SC 2807, decided on 14-12-2018]

One comment

  • Since government saying Supreme Court misinterpreted the CAG report as it has not been examined by the PAC and not submitted in the parliament. Therefore, the government now teaching the Supreme Court to correct their English specially the tenses THE past, present and future.
    ” AMAZING ! ” How can the SC Judges misinterpreted simple English as per the Government.

Join the discussion

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.