Did govt's move to buy jets from Dassault meet norms, asks Supreme Court

On Wednesday, the Supreme Court (SC), in dealing with the three petitions filed against the purchase of 36 Rafale fighters from France, asked for details of the government decision-making that scuttled an ongoing procurement of 126 Rafale fighters and replaced that with the purchase of 36 Rafales from French vendor, Dassault.

The SC has asked for the details to be submitted in three separate sealed covers on or before October 29. The matter will next be heard on October 31.

The apex court made it clear that it will not examine the technical and commercial aspects of the purchase – that is to say, the suitability of the Rafale or the price at which it was bought. All that the judges will scrutinise is “the details of the steps in the decision-making process leading to the award of the order for the defence equipment in question, i.e., Rafale jet fighters (36 in number).”

Effectively, the apex court will establish whether, in going in for an Inter-Governmental Agreement (IGA) with France, the government met the conditions and procedures stipulated in the Defence Procurement Procedure of 2016 (DPP-2016).

DPP-2016 governs the procurement of 36 Rafales, while the aborted procurement of 126 medium multi-role combat aircraft was being pursued under an earlier procedure, i.e., DPP-2006.

The conditions in which the government can process a deal through an IGA are detailed in Paragraphs 104-105 of DPP-2016. Paragraph 106 stipulates the conditions for “procurement on strategic considerations”.

Paragraph 104 notes: “There may be occasions when procurements would have to be done from friendly foreign countries, which may be necessitated due to geo-strategic advantages that are likely to accrue to our country. Such procurements… would be based on mutually agreed provisions between the governments of both the countries.”

This paragraph then describes three contingencies when an IGA can be resorted to. The first is when India’s military identifies “equipment of proven technology and capabilities… (while) participating in joint international exercises.” This is not the case with the Rafale procurement, which was already being pursued under a global tender.

The second contingency is “where a very large value weapon system/platform, which was in service in a friendly foreign country, is available for transfer or sale.” This clause does not apply to the Rafale either, since it stipulates that the purchase “would normally be at a much lesser cost than the cost of the original platform/weapon system, mainly due to its present condition.” This condition applies for situations like India’s purchase of INS Vikramaditya from Russia.

The third contingency relates to the purchase of “a specific state-of-the-art equipment/platform, however, the government of the original equipment manufacturer’s (OEM’s) country might have imposed restrictions on its sale and thus the equipment cannot be evaluated” in the kind of user trials that India demands. This condition does not apply to the Rafale either, which was extensively tested and evaluated in user trials by the Indian Air Force.

Paragraph 105 of DPP-2016 caters for an IGA that would bind the OEM’s government to ensure “product support over a long period of time” and to “provide for the assistance of the foreign government in case the contract(s) runs into unforeseen problems”. 

Paragraph 106 provides for “procurement on strategic considerations”, where “major diplomatic, political, economic, technological or military benefits deriving from a particular procurement may be the principal factor determining the choice of a specific platform or equipment on a single vendor basis.”

This also provides for buying equipment from an OEM who is “not necessarily the lowest bidder (L-1).”

“Decisions on all such acquisitions would be taken by the Cabinet Committee on Security (CCS) on the recommendations of the Defence Procurement Board (DPB),” says DPP-2016.

One analyst says the government could use Paragraph 106 to justify the 36 Rafale procurement on the grounds of French willingness to equip them with nuclear weapons delivery ability. However, the DPB note and the CCS note would have to support such a contention.

SC SEEKS DETAILS
 

• The SC has asked for details of the decision-making process in the Rafale deal with France to be submitted in three separate sealed covers on or before October 29
• The apex court made it clear that it would not examine the technical and commercial aspects of the purchase
• All that the judges will scrutinise is: 'the details of the steps in the decision-making process leading to the award of the order for the defence equipment in question'
• The conditions in which the govt can process a deal through an Inter-Governmental Agreement is detailed in Paragraphs 104-105 of Defence Procurement Procedure of 2016