The government had submitted a note in a sealed cover to the Supreme Court. As we know by now, someone in the Supreme Court misunderstood it, and thereupon improved upon it so as to make it even more convenient for the government.
The government also submitted another note. This one was given to us mortals also. It claimed to set out “Details of the steps in the decision making process leading to the award of 36 Rafale fighter aircraft order.” Far from being a sworn affidavit, the note was not even signed by anyone. It bore no date. And yet, and entirely contrary to its practice, the Supreme Court accepted it. And how!
“The procurement in question, which has been sought to be challenged,” the Supreme Court judgment begins, “has its origins in the post-Kargil experience that saw a renewed attempt to advance the strategic needs of the armed forces of the country”—incidentally, that must be another typing mistake. Surely, what governments would have sought to “advance” are not the “strategic needs” of the country’s armed forces, but the “strategic capabilities.” But this piece is about another feature of the judgment.
The government’s note had begun its description of the Defence Procurement Procedure with the words, “Post Kargil war, a new set of defence procurement management structures and systems were set up in the Ministry of Defence in 2001 . . .”
Robust reproduction
The government’s note [henceforth, “the note”] had said, “To promote indigenisation, a robust offset clause has been included in the Defence Procurement Procedure (DPP) since 2005.”
The Supreme Court judgment [henceforth, “the judgment”] records, “A robust ‘offset clause’ was included in the DPP in the year 2005 so as to promote indigenisation and to that effect Services Qualitative Requirements (SQRs) were prepared in June 2006.” And again later, “With the object of promoting indigenisation, a robust offset clause in said to have been included since 2005.”
The note had said, “In principle approval for the procurement of 126 fighter aircraft was granted by the Hon’ble Raksha Mantri in June, 2001. Services Qualitative Requirements (SQRs) in essence user requirements, were prepared on 08 June 2006.”
The judgment records, “As far back as in the month of June of the year 2001, an in-principle approval was granted for procurement of 126 fighter-jets to augment the strength of the Indian Air Force.”
The only thing to notice is that the mention of “Services Qualitative Requirements (SQRs)” in the note has been shifted from the sentence pertaining to the technical specifications of the aircraft – where it belongs – to the sentence relating to offsets, where it does not belong. But that, as the Supreme Court would say, is just “a minor deviation” in typing!
The note had said, “The Defence Acquisition Council (DAC) granted Acceptance of Necessity (AoN) on 29th June, 2007 for procurement of 126 Medium Multi Role Combat Aircraft (MMRCA) which included 18 direct flyaway aircraft equivalent to a single squadron, from the Original Equipment Manufacturer (OEM) and 108 under license manufacture by HAL to be delivered over the period of 11 years from the date of signing of contract. Bids for 126 fighter aircraft were issued on 28th August 2007.”
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The judgment records, “On 29th June 2007 the Defence Acquisition Council (‘DAC) granted the ‘Acceptance of Necessity’ for the procurement of 126 Medium Multi Role Combat Aircrafts (for short ‘MMRCA’) including 18 direct fly-away aircrafts (equivalent to a single squadron) to be procured from the Original Equipment Manufacturer (‘OEM’) with the remaining 108 aircrafts to be manufactured by Hindustan Aeronautics Limited (for short ‘HAL’) under licence, to be delivered over a period of 11 years from the date of signing. The bidding process commenced in August 2007.”
The note had said, “Six vendors submitted their proposals on 28th April, 2008. Technical Evaluations were approved in June 2009 and Field Evaluations conducted from July 2009 to May 2010. The Staff Evaluation Report was accepted in April 2011 wherein Rafale (M/s Dassault Aviation) and Eurofighter (M/s EADS) qualified field evaluations. Technical Oversight Committee report was approved in June 2011. The commercial bids were opened in November 2011 and M/s Dassault Aviation was determined L1 in January 2012. ”
The judgment records, “Six (06) vendors submitted proposals in April 2008. The proposals were followed by technical and field evaluations; a Staff Evaluation Report and a Technical Oversight Committee Report. All these were completed in the year 2011. The commercial bids were opened in November, 2011 and M/s Dassault Aviation (hereinafter referred to as ‘Dassault’) was placed as the L-I sometime in January 2012.”
The note had said, “Contract Negotiations commenced from February 2012. In the context of letters received and the issues raised relating to the determination of the L1 vendor, the then Hon’ble Raksha Mantri directed that the Independent Monitors be requested to examine the issues related to the determination of L1. The Independent Monitors cleared the process.”
Credit: Mika
The judgment records, “Negotiations commenced thereafter and continued but without any final result. In the meantime, there was a change of political dispensation at the centre sometime in the middle of the year 2014. ”
The note had said, “The scope of these procedures have [another typing mistake!] been successively revised and enlarged through periodical reviews resulting in the promulgation of DPP-2005, 2006, 2008, 2011, 2013, and 2016 to include aspects of indigenous manufacture, Transfer of Technology (ToT), offsets, etc.”
The judgment records, “The Government states that the DPP 2002 has been succeeded by periodical reviews in 2005, 2006, 2008, 2011, 2013 and 2016.”
The note had said, “Of the total procurement of about Rs. 7.45 lakh crore since 2002 under DPP, IGAs [Inter Government Agreements] of different kind [another typing mistake!] including FMS [Foreign Military Sales] and SCOC [Standard Clauses of Contract] account for nearly 40%.”
The judgment records, “Of the total procurement of about Rs.7.45 lakh crores since 2002 under DPP, different kinds of IGAs [Inter Government Agreements], including Foreign Military Sales and Standard Clauses of Contract account for nearly 40%.”
The note had said, “The Preamble to the DPP captures its essence. It states that . . .,” and it had proceeded to quote two sentences.
The judgment records, “The preamble to DPP has been referred to capture its essence, which emphasizes that . . .,” and it proceeds to quote the same sentences.
The note broke off the quotation, only to continue, “It [the Preamble] also states that . . .,” and it proceeded to reproduce another two sentences.
The judgment breaks off the quotation, only to continue, “It [the Preamble] also states that . . ,” and it proceeds to reproduce the same two sentences.
No desire to critically examine claims
The note had stated, “. . .the contract negotiations could not conclude mainly due to unresolved issues related to 108 aircraft to be manufactured in India. These issues pertained to lack of common understanding between HAL and Dassault Aviation on following:
“i) Man-hours that would be required to produce the aircraft in India: HAL required 2.7 times higher Man-Hours compared to the French side for the manufacture of Rafale aircraft in India.
“ii) Dassault Aviation as the seller was required to undertake necessary contractual obligation for 126 aircraft (18 direct flyaway and 108 manufactured in India) as per RFP requirements. Issues related to contractual obligation and responsibility for 108 aircraft manufactured in India could not be resolved.”
The first assertion bordered on the idiotic: it glossed over the way those much-vaunted man-hours would fall over time, once the infrastructure and technology were in place; it glossed over the gains that would accrue to the country by becoming self-reliant. The second assertion should actually have exposed Dassault to the prospect of being thrown out of the contract all together as it was now reneging on what it had accepted when it bid under the Request for Proposals.
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And as for the inability of Dassault and HAL to agree on providing guarantees, etc., what the government’s note was asserting was in direct contradiction to what the CEO of Dassault and the Chairman of HAL had stated on record – and these statements had been brought to the notice of the Supreme Court. The assertions were in flat contradiction to the fact – which had also been brought to the attention of the Court– that Dassault had entered into a work-share agreement with HAL.
Instead of examining the government’s assertions in light of these facts, the judgment says, “As far as the endeavour to procure 126 fighter aircrafts is concerned, it has been stated that the contract negotiations could not be concluded, inter alia, on account of unresolved issues between the OEM and HAL. These have been set out as under . . .” and proceeds to reproduce those two concoctions from the note!
The note then said, “The above issues remained unresolved for more than three years. This delay impacted the cost of acquisition, as the offer was with in-built escalation and was influenced by Euro-Rupee exchange rate variations.”
The judgment says, “The aforesaid issues are stated to have been unresolved for more than three years. Such delay is said to have impacted the cost of acquisition, as the offer was with ‘in-built escalation’ and was influenced by Euro-Rupee exchange rate variations.”
The note said, “As the contract negotiations reached a stalemate and RFP compliance could not be ensured, the process of RFP withdrawal was initiated in March 2015 and RFP for 126 MMRCA was finally withdrawn in June 2015.”
These dates and the assertions about them were at the heart of the matter—because the Prime Minister had out-of-the-blue announced the 36-aircraft deal on 10 April 2015. They were clearly tailored to shield the announcement – an announcement about which the defence minister had no prior knowledge, about which the foreign secretary (much in the inner-circle of the PM) had no knowledge, about which Dassault’s CEO had no knowledge, about which the French government had no knowledge. The assertions in the note screamed to be examined.
The court chose not to look into the matter at all. Literally lifting words from the government’s note, the judgment says, “The stalemate resulted in the process of RFP withdrawal being initiated in March 2015.” “Look,” exclaimed Voltaire, “how well God has designed the nose to hold the spectacles”!
The note says, “During this long period of inconclusive 126 MMRCA process, our adversaries inducted modern aircraft and upgraded their older versions . . . Further, they modernised and inducted aircraft with advanced weapon and radar capabilities. As per available information, our adversaries inducted more than 400 fighters (equivalent to more than 20 Squadrons) during the period 2010 and 2015. They not only inducted 4th Generation Aircraft but also inducted 5th Generation Stealth Fighter Aircraft.”
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The judgment says, “In this interregnum period [another typo, since the word ‘interregnum’ itself conveys the sense of a period], adversaries of the country, qua defence issues, inducted modern aircrafts and upgraded their older versions. This included induction of even 5th Generation Stealth Fighter Aircrafts of almost 20 squadrons, effectively reducing the combat potential of our defence forces.”
The note said that to cut through this stalemate, “An Indian Negotiating Team (INT) was constituted to negotiate the terms and conditions of the procurement of 36 Rafale aircraft with the French Government team . . . Negotiations between the INT and the French side started in May 2015 and continued upto April 2016. A total of 74 meetings, which included 48 internal INT meetings and 26 external INT meetings with the French side were held during the negotiations.”
The judgment says, “An INT (Indian Negotiating Team) was constituted to negotiate the terms and conditions, which commenced in May 2015 and continued till April 2016. In this period of time, a total of 74 meetings were held, including 48 internal INT meetings and 26 external INT meetings with the French side.”
The note says, “As mandated by the DAC, the INT completed its negotiations and arrived at better terms relating to price, delivery and maintenance compared to the MMRCA offer of M/s Dassault Aviation.”
The judgment says, “It is the case of the official respondents that the INT completed its negotiations and arrived at better terms relating to price, delivery and maintenance, as compared to the MMRCA offer of Dassault”—no examination there: just “It is the case of the official respondents that . . .”
The note listed the subsequent steps – up to the approval of the contract by the Cabinet Committee on Security, and concluded, “It is reiterated that the procurement process laid down in the Defence Procurement Procedure (DPP)-2013 was followed in procurement of 36 Rafale aircraft.”
The judgment says, “This was further processed for inter-ministerial consultations and the approval of the CCS was also obtained, finally, resulting in signing of the agreement. This was in conformity with the process, as per para 72 of DPP 2013.”
Ambani howler came from government too
The government had also handed a note asserting that it had nothing to do, as it was meant to have nothing to do with selecting Anil Ambani’s company to be the offset partner. This was in blatant contradiction of clause after clause of the DPP and the Offset Guidelines. These had been listed for the court. The judgment totally disregards them. Once again it repeats the assertions of the government. And it makes a howler of the same scale – and a howler as convenient to the government as those invented reports. “It is no doubt true,” the judgment says, “that the company Reliance Aerostructures Ltd., has come into being in the recent past, but the press release suggests that there was possibly an arrangement between the parent Reliance company and Dassault starting from the year 2012.”
The company with which Dassault had been talking – off and on, in a desultory manner – was Mukesh Ambani’s cash-rich Reliance, not Anil Ambani’s debt-ridden company. But for the moment the question is: what was the court reproducing this time?
Another government handout! In a press release issued on September 22 2018, the defence ministry had slipped in this sleight of words. “It has been reported that a JV between Reliance Defence and Dassault Aviation came into being in February 2017. This is a purely commercial arrangement between two private companies. 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.”
And the Supreme Court reproduced this fiction too!
The press release continued, “Dassault Aviation has issued a Press Release stating that it has signed a partnership agreement with several companies and is negotiating with hundred odd other companies.”
The judgment says, “Dassault has also issued a press release stating that it has signed partnership agreements with several companies and is negotiating with over hundred other companies.”
Here is the Supreme Court, which in this very judgment scolds others for relying on statements to the press, reproducing verbatim a press release about a press release! Not just that, it is reproducing the press release of the very government whose conduct it is to scrutinise. And whose press release was that government’s press release reproducing? The press release of the very companies whose conduct the court is to scrutinise!
The government’s press release had continued: “As per the guidelines, the vendor is to provide the details of the offset partners either at the time of seeking offset credit or one year prior to discharge of offset obligation, which in this case will be due from 2020.”
The judgment says, “As per the guidelines, the vendor is to provide details of the IOPs [Indian Offset Partners] either at the time of seeking offset credit or one year prior to discharge of offset obligation, which would be from 2020 onwards.”
Talk of “application of mind.”
If a student lifts sentence after sentence, para after para like this from some help-book, what would you say? But when the Supreme Court does so, we must say that it has found everything in order!
And what of the student who, while so fluently lifting lines and paras from that help-book, says nothing on the real questions he has been asked to answer?
The vital question was how the price per plane had been tripled. The note on that was in sealed cover. The judgment, having invented that non-existent Report of the CAG; having had the non-existent Report processed by the Public Accounts Committee; having invented another non-existent Report of the PAC; having placed that non-existent Report of the PAC in Parliament; having thus brought all the non-existent facts in the “public domain,” proceeds to repeat the assertions of the government in the other note – the one in the sealed cover – only to conclude, “It is certainly not the job of this 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.”
The vital question was as to how the requirement of 126 planes had been slashed to 36. The judgment, having done all it can by reproducing at length the government’s assertions, washes its hands of the matter. It says, “We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircraft in place of 126. We cannot possibly compel the government to go in for purchase of 126 aircraft.”
The vital requirement was that 108 of the 126 the planes be produced in India. The note advanced those misleading assertions about man-hours, etc. The judgment repeats them.
The vital question was how the insistence – and it was precisely that in the Request for Proposals, an insistence – that technology be transferred was completely given up. The note said not a word. The judgment says not a word.
A precedent
I am reminded of what happened in a school for little kids. The children had been given homework. The teacher had corrected the answer books overnight. She was calling up the children, one by one, and returning the exercise books – marked and all. “Sanjay,” she called out. Little Sanjay walked up to her desk. She opened his copybook – all marked in red, mistake after mistake. Returning the copybook, she lost her temper, “I just can’t imagine how just one boy can make so many mistakes.”
The little boy answered, “Ma’am my father helped me.”