Tag: Rafale jets price

SC Verdict Today on Centre’s Objection in Rafale Review Pleas

The Centre had claimed privilege over documents pertaining to the Rafale fighter jet deal with France and said those documents cannot be considered in evidence as per Section 123 of the Indian Evidence Act.

New Delhi: The Supreme Court will on Wednesday pronounce the verdict on the preliminary objections raised by the Centre that the documents on which it was claiming “privilege” cannot be relied upon to re-examine the verdict in the Rafale fighter jet deal with France.

A bench headed by Chief Justice Ranjan Gogoi will pronounce the verdict.

On March 14, the apex court had reserved verdict on the preliminary objections raised by the Centre on admissibility of privileged documents annexed by former Union ministers Yashwant Sinha and Arun Shourie as also activist lawyer Prashant Bhushan in their review petition against the top court’s December 14 judgement that dismissed all petitions against the Rafale jet deal.

“Only after we decide the preliminary objection raised by the Centre, we will go into other aspect of the review petitions,” the bench said, adding that “only if we overrule the preliminary objection, we will go into other details”.

The Centre had claimed privilege over documents pertaining to the Rafale fighter jet deal with France and said those documents cannot be considered in evidence as per Section 123 of the Indian Evidence Act.

Attorney General K.K. Venugopal, appearing for the Centre had contended that no one can produce them in the court without the permission of the department concerned as those documents are also protected under the Official Secrets Act and their disclosure is exempted under the Right to Information Act as per Section 8(1)(a).

Bhushan had contended that the Centre’s objections were “mala fide and totally untenable arguments”.

Also read: What Did India’s Finance Ministry Think of the Objections Raised in the Rafale Deal?

The top court had further noted that according to the AG’s submissions “there are three Rafale documents whose publication comes under Official Secrets Act, 1923. These documents were unauthorisedly published. You claim privilege under section 123 of Evidence Act. You want us to adjudicate and strike down the review on this basis”.

Bhushan had submitted a note countering the preliminary objections raised by the centre on maintainability of the review petitions, stating that “preliminary objections are mala fide and totally untenable arguments”.

He had said government cannot claim privilege over the documents which are already published and is in public domain.

Bhushan had said that Section 123 Indian Evidence Act only protected “unpublished documents”.

While the Centre was making a submission that the documents can be withheld from disclosure under the RTI Act in view of the national security, the top court said Section 22 of the RTI Act gave it an overriding effect over the Official Secrets Act.

It also said that under Section 24 of the RTI Act even security and intelligence establishments are not exempted from disclosing information in relation to corruption and human rights violations.

“The RTI Act brought a revolution. In 2009, your own government said file notings can be made available under the RTI. Let us not go back now,” the bench has said.

Also read: With the RTI Law in Place, Rafale Deal Secrets Can’t Be Called ‘Stolen’

Bhushan further said that provisions of the RTI Act say public interest outweighs other things and no privilege can be claimed except for documents which pertain to intelligence agencies.

He also said that there is no government-to-government contract in purchasing Rafale jets as there is no sovereign guarantee extended to India by France in the Rs 58,000 crore deal.

He had submitted why the government didn’t lodge any FIR when these documents started coming out in November 2018.

He had further said that the government has itself filed a detailed CAG report regarding as many as 10 defence purchases and it is untenable on their part to now claim the privilege.

What Did India’s Finance Ministry Think of the Objections Raised in the Rafale Deal?

What view did the finance minister take on the concerns raised by the negotiating team? Was he supportive and then overruled by the Cabinet Committee on Security?

It has been established conclusively by the “stolen” documents published by The Hindu that three members of the Indian negotiating team, responsible for conducting the negotiations for the 36 Rafale fighter planes with French firm Dassault, had, in a June 2016 note submitted to the deputy chief of air staff and chairman of the Indian negotiating team, raised serious objections to some of the deal’s terms and conditions.

These objections have been widely discussed in the media and elsewhere, but a few of the serious ones need to be mentioned here again as an aide memoire.

The first objection was that the final price offered by the French government was 55.6% above the benchmark price. The final price was escalation-based while the benchmark price was firm and fixed.

The second objection was that “the reasonability of the price offered by the French government is not established. Even the final price offer by the French government cannot be considered as ’better terms’ compared to the MMRCA offer and therefore not meeting the requirement of the joint statement” issued after the meeting between the Indian prime minister and the French president.

The third objection raised by them was that the “additional commercial proposal of 1400 million Euros towards NRC for design and development ISE (India specific enhancements) was exorbitant and unrealistic”.

The fourth issue raised was with regard to sovereign or government guarantee that would have resulted in cost savings for both sides. The French side neither agreed for providing sovereign/government guarantee nor bank guarantee, nor did it even offer corresponding reduction in price because of this factor.

Also read | Why Does the CAG Have More to Say on the 2007 Rafale Process than the 2016 Deal?

The fifth point raised by these three members was with regard to the delivery schedule of the 36 planes, which was slower than the 18 planes in fly-away condition under the MMRCA process. They also observed that “the delivery schedule being offered by the French side in the IGA is highly optimistic”.

We also know that these issues were not resolved either at the level of the chairman of Indian negotiation team or at the level of the raksha mantri, and were ultimately settled by the cabinet committee on security which obviously overruled these very valid objections and decided to go ahead with the recommendations of the other four members which constituted a narrow majority of one in the seven-member negotiating team.

The finance minister’s role

What did the Ministry of Finance do, though? I am raising this question even at this late stage because I find that the role of the finance ministry, specially of the minister of finance, despite being crucial, has received little or no attention either from the media or the others.

Under the established procedure of the government of India, no cabinet note can be put up to the cabinet or any of its committees including the committee on security without the concurrence or comments of the ministry approved at the level of the finance minister himself. I also know from personal experience that all expenditure proposals are examined in great detail in the finance ministry.

The proposal to buy 36 Rafale fighter planes from the French company Dassault was not only an important proposal, but also involved a huge cost to the exchequer – nearly Rs 60,000 crore. I have no doubt in my mind that the proposal would have been examined thoroughly by the officials of the Department of Expenditure in the Ministry of Finance, especially in the light of the objections raised by the three important members of the negotiating team. Did they deal with the objections and find merit in them? Did they dismiss them as of little or no consequence? Or did they agree with the raksha mantri’s suggestion and recommend to the finance minister that the issue should be referred to the cabinet committee on security for resolution? What was the view taken by the finance minister on this issue?

Also read | If I Had Got More Than a Minute to Speak: Arun Shourie on Rafale Proceedings in SC

The finance minister is a crucial member of the cabinet committee on security, especially when it comes to financial issues. It is a responsibility cast upon the ministry by the Transaction of Business Rules and the General Financial Rules of the government of India. The finance minister cannot shirk this responsibility, however unpleasant it may be. It is also not open to him to suggest that he is unable to settle the objections raised at the official level, which should be done by the final decision-making body, namely the cabinet committee on security.

So what view did the finance minister take? Did he support all or some of the objections raised and was overruled in the cabinet committee on security? If he failed to highlight these objections, then it should be considered a serious dereliction of duty on his part.

The Ministry of Finance generally takes a conservative view of the expenditure proposals submitted by other ministries, examines them thoroughly and often alters the proposals or rejects them totally. The officers of the Ministry of Finance are trained to do so. It is highly unlikely, therefore, that they would have ignored the very valid objections to the deal raised by the members of the negotiating team. And if they did not, then what happened at the level of the finance minister? What view did he take on these objections?

The file noting published by the Hindu newspaper also reveal that the PMO was carrying on parallel negotiations with the French side which was objected to by the officials of the Ministry of Defence. This objection was entirely valid because the prime minister and his office have no role in defence acquisition until the matter reaches the cabinet committee on security. Until then, his role is only as important as the role of the home minister or the external affairs minister, the other two members of the cabinet committee on security.

Also read | With the RTI Law in Place, Rafale Deal Secrets Can’t Be Called ‘Stolen’

But the two ministers whose role is crucial before that stage is reached are the defence minister and the finance minister. In this deal, it is these two who have failed the country, specially the finance minister who is charged with the responsibility to ensure that government funds are spent judiciously and not wasted. The finance minister who is now the chief blogger of the government has not only ruined the economy of the country but is also guilty of serious dereliction of duty in the Rafale deal.

Untruth is not permanent, only truth is – and truth has a bad habit of turning up uninvited at the wrong time.

Yashwant Sinha is a former finance minister of India.

Goa Minister Said Manohar Parrikar Has Rafale Documents in His Bedroom: Congress

Goa minister Vishwajit Rane, who is purportedly on the recording released by the Congress, has said the audio is doctored.

New Delhi: The Congress on Wednesday demanded answers from Prime Minister Narendra Modi on Goa chief minister Manohar Parrikar’s purported claim that he had a file on the Rafale deal “lying in his bedroom”. The grand old party asked if this was the reason why a joint parliamentary committee probe was not being ordered.

Congress chief spokesperson Randeep Surjewala published a conversation purportedly between Goa minister Vishwajit Rane and another person.

Rane purportedly can be heard saying that during a Goa cabinet meeting last week, Parrikar stated he had an entire file and all documents relating to the Rafale deal lying in his bedroom, Surjewala claimed, playing the conversation for the media outside parliament.

He quoted Rane as saying, “The chief minister made a very interesting statement, that I have all the information of Rafale in my bedroom….that’s means he is holding them to ransom. He said it is in my bedroom here only in my flat, each and every document on Rafale.”

Rane has said that the tape is doctored and that Parrikar “never made any reference to Rafale”.

Also Read: During Crucial Rafale Negotiations, PMO Compromised Defence Ministry’s Position

There was no confirmation on whether it was the voice of Rane in the audio. The identity of the other person was also not ascertained.

The BJP has alleged that the Congress is only “peddling lies” on the Rafale issue.

“Now it is clear that the ‘chowkidaar is chor’ (the watchman is a thief),” Surjewala told reporters in an apparent reference to Modi.

“Now the prime minister should answer. The country is demanding answers as to what secrets in the Rafale ‘scam’ are lying inside Manohar Parrikar’s flat and bedroom,” he claimed, asking why the ‘chowkidaar’ is fearing Parrikar.

“Now the prime minister has to answer. He only does captive interviews and is not used to answering questions from the media. What is the hitch in making public all the documents,” he asked.

Surjewala claimed the skeletons were tumbling out of the Rafale scam cupboard.

“New evidence busts ‘chowkidar’s’ worst kept secrets. What is Modi government hiding… Is this the reason why a JPC probe is not being ordered,” he asked.

Training his guns on Modi, Surjewala said, “this is a personal charge against you”.

Also Read: Missing Links: The Supreme Court’s Verdict on the Rafale Deal

“There was corruption and wrongdoing in the Rafale scam and it is all recorded in the files. Those files are with Mr Parrikar. Why are they being hidden? If Mr. Modi has nothing to hide, then why is Mr. Parrikar keeping those files in his bedroom and threatening everybody that nobody can do anything against him, for he has the Rafale files,” he alleged.

Rane demands probe into audio clip

Rane told BJP president Amit Shah on Wednesday that he has asked the state government to order an inquiry into the matter.

In a letter to Shah, Rane said he never had any conversation with anyone on the Rafale issue.

According to BJP sources, Rane has said, “I have also sent a letter to Chief Minister Manohar Parrikar asking for an immediate police inquiry and criminal investigation to expose the mischievous elements.”

“…this is a doctored audio and have never had any discussion with this regard on this subject with anyone,” Rane said.

“I would like to…inform the chief minister that there is someone playing mischief and there should be inquiry in this matter and such mischievous elements need to be brought to the books,” Rane said in the letter to Parrikar.

(With PTI inputs)

Rafale Deal: The Mystery of the 3-Billion-Euro Price Hike

How did the benchmark price for 36 Rafales go up from 5.2 billion euros to 8.2 billion euros and on what basis did the Modi-led Cabinet Committee on Security agree to pay more per plane than the MMRCA RFP had envisaged for the same configuration?

New Delhi: On November 14, the Supreme Court reserved its verdict on the PIL questioning the Modi government’s controversial decision to purchase 36 Rafale fighter jets from France in flyaway condition by cancelling the then 95% negotiated RFP for 126 aircraft.

On the same day, drawing on internal correspondence between the ministries of law and defence, The Wire had reported how the Modi government failed to secure from France a sovereign guarantee for the deal’s implementation and settled instead for a ‘letter of comfort’. The issue also figured prominently in the court’s hearings.

The only problem with such a letter – says Sudhanshu Mohanty, who was the Financial Advisor (Defence Services) in the Ministry of Defence from October 2015 to May 2016 – is that it “provides no comfort at all”. It was during his tenure that the deal for 36 Rafales was negotiated. Prior to becoming FA in MoD, Mohanty was the Controller General of Defence Accounts (CGDA). Speaking to the Economic Times a day after the Supreme Court wrapped up its hearings, he said that the bench mark price (BMP) set for 36 Rafales at the start of the negotiation by the contract negotiation committee (CNC) was 5.2 billion euros but that later it was increased to 8.2 billion euros. What he said is worth quoting in full:

“It has been brought out that the negotiating team came up with a benchmark price that was overruled by the ministry. It wouldn’t be fair on my part to comment on the benchmark price. The more relevant question that needs to be asked is: On what grounds was this overruled? What logic and justifications were adduced on file to overrule the points made by senior ministry officials who negotiated the contract? Further, as per the information available in public domain, the Defence Acquisition Council headed by the defence minister and consisting of all top MoD honchos didn’t recommend the case, and instead left it to the Cabinet Committee on Security to take a call. Why? This needs to be looked into. For, not in my fallible memory of defence capital acquisition can I recall such a thing — because it is strange, even queer.”

This is very important because the government submitted a detailed answer in the Supreme Court (though it was undated and unsigned and was not an affidavit) saying it had followed all the guidelines prescribed by the Defence Procurement Procedure (DPP) 2013.

Since the prescribed procedure would presumably have involved the DAC recommending a case and not leaving it to the CCS,  the government’s claim that it followed all the steps prescribed by the procurement guidelines does not appear to be accurate.

Para 51 of DPP 2013 states: “In all cases, CNC (Contract Negotiation Committee) should establish a benchmark and reasonableness of price in an internal meeting before opening the commercial offer.”

Para 26 of the government’s reply to the Supreme Court states: “The INT (Indian Negotiating Team) report was finalised and signed on July 21, 2016.” And it boasts of how the INT negotiated “better price, delivery and terms in comparison with 126 MMRCA case”.

Para 27 confirms, “Chairman of INT submitted the report on August 4, 2016 and recommended the case to be progressed for CCS (Cabinet Committee on Security) approval and signing the IGA (Inter Government Agreement).” “The proposal was placed before the CCS on August 24, 2016. The approval of Cabinet Committee on Security for the signing of the IGA for procurement of 36 Rafale aircraft was accorded on August 24, 2016.”

Here is the contradiction. When the negotiations started in May 2015 (as per para 25 of the government’s answer to the Supreme Court) an expert committee led by MoD official M.P. Singh (advisor-cost) determined the benchmark price to be 5.2 billion euros. Singh and his colleagues were over-ruled by others in the ministry but even so, the DAC “didn’t recommend the case” and kicked the ball up to the CCS. And it was the CCS which took the decision to accept the hike in the benchmark price.

In other words, if the benchmark price had to be increased at the last minute by the CCS – basically a group of ministers led by Prime Minister Modi and comprising Arun Jaitley, Manohar Parrikar, Rajnath Singh and Sushma Swaraj – who have no technical know-how or expertise in the subject matter, how can the government say it followed all the procedures? It is apt to remember here that the three MoD officials – Rajeev Verma, (then) joint secretary (Air), A.R. Sule (then) finance manager (Air) and M.P. Singh himself – raised objections on the revised benchmark price and they were either transferred or sent on leave as the government bulldozed its way.

The irony is that the entire controversy over the price of the 36 Rafales can be traced back to this hike in benchmark price. Had the government stuck to the 5.2 billion euro benchmark price, it would have produced a price similar to what was “discovered” via the 126 MMRCA RFP process.

As Ajai Shukla has reported in the Business Standard, the total cost of the 126 Rafales under the MMRCA deal RFP was 19.5 billion euros and included the same configuration of weapons and other related accessories and terms and conditions in comparison to the Modi government’s deal, which costs 7.8 billion euros for 36 aircraft in flyaway condition from France, 2 billion euros more than what the cost might have been if the MMRCA RFP had been used as the benchmark.

Buckling on the arbitration issue

DPP 2013, Schedule 1, Appendix H Para 2.5 reads: “The arbitration tribunal has its seat in New Delhi or such other places in India as may be decided by the arbitrator”. Para 2.6 says “The arbitration proceedings shall be conducted in India under the India Arbitration and Conciliation Act, 1996 and the award of such Arbitration tribunal shall be enforceable in India courts only”.

A 2016 note from MoD on the Rafale negotiations accessed by The Wire makes it clear that on French insistence, the Modi government agreed to change the seat of arbitration out of India. And it clearly mentions that the government didn’t insist on a sovereign guarantee or adequate bank guarantee.

It says in para 3: “To briefly recapitulate, it was considered essential that the proposed IGA retains the character of Government to-Government Agreement for this procurement. As may be seen in Encl 13A, it was stated in out reference to MoL&J the core elements of G-to-G character seem to be:

  1. The responsibility for the supply of equipment and related industrial services and performance of the entire contract remains with the foreign government;
  2. Dispute resolution mechanism at Government-to-Government level only.

Para 4 reads: “With reference to the peculiar nature of proposed IGA for procurement of 36 Rafale aircraft, certain issues arose during the course of negotiations which include the issues of Transfer of rights and obligations by French Government to the French Industrial Suppliers, Arbitration between Government of India and French Industrial Suppliers, French side not agreeing to provide Sovereign/Government Guarantee, etc. which were referred to MoL&J in this context for examination to ensure that the Government to Government character of the proposed Agreement is being retained and the legal and financial interests of Government of India are adequately protected.”

Para 5 says : “….While giving the legal advice as a whole, MoL&J concluded by stating that the suggestions, modifications and improvements discussed above in respect of draft IGA and draft Supply protocols ma1, be considered and suitably addressed to, as deemed appropriate. It was further suggested that on matters of administrative policy, a conscious decision may accordingly be taken at an appropriate level as the issues / suggestions are required to be suitably addressed to by the administrative department before the vetting of draft IGA & draft Supply Protocols and also in view of secretary MoD’s note dated l l.12.2015 for the urgency in the matter. …. However, as stated in para 3 of Note 231 (copy at Encl 15A), MoL&J have not specifically responded on the issue of G-to-G character getting affected by the provisions proposed by the French side, especially by transfer of rights and obligations by French Government through French Industrial Suppliers, Arbitration with French industrial suppliers and absence of Government / Sovereign Guarantees etc. as raised in Note 223 referred to above. MoL&J have also not commented on certain other issues such as technical arrangement, implications of different country laws etc.”

Para 6 & 7 clearly states, National Security Advisor (NSA) was with the Indian Negotiating Team (INT) in France on Jan 12 and 13, 2016.

Para 6 Reads: “After receipt of above legal advice, discussions have taken place during the meetings of INT on these issues, in the meetings in MoD and also in the meeting of NSA and Member Secretary, INT, with the French side in Paris”.

Para 7 says: “As per the advice of MoL&J, the French side was requested to incorporate a clause on  ‘Joint and Several Responsibility’ in respect of Article 3.1. Article 4.3 was amended in the meeting of NSA and Member Secretary, INT with the French side in Paris on 12 &. 13 January 2016 and was further amended after discussions in MoD.”

These notes make it evident that National Security Advisor Ajit Doval was the person who facilitated the acceptance of a “Letter of Comfort” from France instead of a sovereign guarantee.

In a nutshell, none of the committees comprising experts and bureaucrats approved the 3 billion Euro hike in benchmark pricing, but it was the Cabinet Committee on Security headed by Prime Minister Modi which decided on it. And it is the same CCS which agreed on a letter of comfort from France instead of a mandatory sovereign guarantee on a G to G deal.

It is hard to see how the Modi government could have told the Supreme Court that the procurement contract for 36 Rafales was according to the procedures set in DPP 2013.

Either Party Can Break Promise, Ex Defence Bureaucrat Says on Rafale Deal’s ‘Letter of Comfort’

In a media interview, Sudhansu Mohanty, former Comptroller General of Defence Accounts, also said that the change in the benchmark price was suspicious.

New Delhi: Former defence ministry bureaucrat Sudhansu Mohanty has criticised both the change in benchmark price in the Rafale deal and France’s refusal to provide a sovereign guarantee.

In an interview with the Economic Times, Mohanty, former Comptroller General of Defence Accounts and Financial Adviser of Defence Services, said that the change in the benchmark price was suspicious.

As The Wire has reported, the negotiating team in charge of the Rafale contract had initially pegged the price of the 36-aircraft deal at €5.2 billion. This figure was eventually overruled with the adoption of a new formula that placed the benchmark price at €8.2 billion. This change allowed the €7.87-billion deal to finally go through, because defence procurement rules prohibit any large deviation between the benchmark and final price.

Also Read: Rafale Twist: Why Did France Refuse to Give India a Sovereign Guarantee?

Putting aside the question regarding the jump in benchmark price from €5.2 billion to €8.2 billion, Mohanty stressed that a more relevant inquiry would ask why the benchmark price decided by the negotiating team was overruled by the ministry. In specific, the government should come clean on the grounds for dismissing the benchmark price determined by senior ministry officials who negotiated the contract.

Additionally, Mohanty also asked why the Cabinet Committee on Security had recommended the final change in benchmark price instead of the Defence Acquisition Council.

Sovereign letter of comfort?

On Wednesday, Attorney General K.K. Venugopal also confirmed one of The Wire‘s stories and admitted that France gave no sovereign guarantee that Dassault would meet its obligation of delivering the 36 Rafale jets. Instead, Venugopal noted, the French government had offered only a letter of comfort (LoC).

According to Mohanty, a LoC is the farthest thing from a sovereign guarantee.

“Loosely, it can be said to be a ‘letter of intent’, as is often used in international contracts. Maybe, morally binding but not legally binding and enforceable. Somewhat akin to a ‘sagaai’, betrothal. Either party can break the promise and go their different ways – and with impunity, although the moral aspect will doubtless stick. However, in matters of a buying nation’s commitment based on public funds, it can cause harm to the nation,” the bureaucrat told The Economic Times.

“If there are voices raised over a problem in a contract, for example, the successor government may or may not honour what has been promised in a letter. On the other hand, the cost of the contract with bank guarantees would be different as the vendor would have to guarantee the deliverables as per the contract till the time it is made available to the buyer and other terms are fulfilled, that could stretch well up to seven years and more…,” he added.

Also read: Post-Rafale, Dassault Investment in Inactive Anil Ambani Company Gave Reliance Rs 284 Crore Profit

Asked about the change in offset rules that did not oblige the vendors to share details with the defence ministry, Mohanty pointed out that the government would be ultimately incurring a loss if a foreign vendor picks an Indian company with no experience and credibility in defence production as its partner.

Making the case for Hindustan Aeronautics Limited, he said, “The cost of production, in terms of labour costs, is significantly lower in India. How much this increase in work hours would have impacted the pricing of the deal has to be studied. HAL’s 2.7 times higher man hour requirements vis-à-vis Dassault need to be put through the formulaic PPP model or its variant to equilibrate the labour hours/rates and see the actual difference. Taking into account the difference in cost of living standards and labour rates here, the HAL offer could perhaps have been very competitive.”

Modi Govt ‘Short-Circuited’ Acquisition Process in Rafale Deal, Prashant Bhushan Tells SC

The Supreme Court is currently hearing pleas seeking a court-monitored probe into the controversial purchase of Rafale jets.

New Delhi: The Supreme Court on Wednesday commenced its hearing on pleas seeking a court-monitored probe into the procurement of 36 Rafale fighter jets from France.

A bench comprising Chief Justice Ranjan Gogoi and Justices S.K. Kaul and K.M. Joseph is also likely to peruse the pricing details of the jets submitted by the government in a sealed cover.

During the hearing, advocate Prashant Bhushan, appearing on behalf of himself and former Union ministers Yashwant Sinha and Arun Shourie, submitted that the NDA government “short-circuited” the acquisition process by taking the inter-government agreement (IGA) route to avoid giving a tender.

He said, as The Wire has also reported, that there was no sovereign guarantee from the French government in the deal with regard to obligations and responsibilities.

Bhushan argued that initially, the Union law ministry had flagged the issue, but later gave in to the proposal of entering into the IGA.

Also read: Rafale Twist: Why Did France Refuse to Give India a Sovereign Guarantee?

The Air Force needed 126 fighter jets and had intimated the Defence Acquisition Council (DAC) about it, he said, referring to the process of defence acquisition.

Initially, six foreign companies had applied and two firms were shortlisted during the earlier process.

Later, the deal went to French firm Dassault and state-owned Hindustan Aeronautics Ltd was part of it. But suddenly a statement was issued and it said there will be no technology transfer, and only 36 jets would be procured, the lawyer told the court.

Bhushan submitted that nobody knows about the alleged change in the deal done by the prime minister and even the defence minister was not aware about the the change.

According to LiveLaw, Shourie, who spoke after Bhusan, told the Supreme Court that Dassault’s documents reveal that the actual pricing of jets is contrary to prices disclosed in parliament. He also insisted that Dassault Aviation would not have chosen Reliance Defence as its offset partner on its own, since the company had no relevant experience.

Advocates M.L. Sharma, Vineet Dhanda and AAP MP Sanjay Singh also advanced their arguments before Bhushan.

Also read: Rafale Deal Reveals How Cabinet ‘Rules of Business’ Suffer Under Modi’s Rule by Fiat

Sharma, who opened the arguments, told the court that the IGA was “illegal” and sought an investigation into the matter. Dhanda sought a proper reply from the Centre on his plea questioning the Rafale deal.

The AAP leader’s counsel Dheeraj Singh questioned why the government reduced the deal of 126 jets to 36.

He said the government should have increased the number of jets when there was a concern that adversaries were inducting more fighter jets.

Bhushan also raised the same point as Singh and said 3.5 years have passed since the deal was signed on 36 Rafale jets but no aircraft has been received till now.

He said the first jet is to be delivered in September 2019 and delivery to continue till 2022.

“If the 126 aircraft deal was still on, at least 18 jets would have been delivered by April 2019,” he submitted.

Also read: Dassault CEO’s Interview Digs Bigger Hole for Modi Government on Rafale

The hearing is currently underway in the top court.

Two days ago, the Centre had handed over details on the decision-making process that went into the contract to the petitioners.

(With PTI inputs)

Rafale Twist: Why Did France Refuse to Give India a Sovereign Guarantee?

Documents reveal how two core conditions of a government-to-government contract were diluted in the run-up to purchasing 36 Rafale jets.

New Delhi: The Narendra Modi government has consistently claimed that the Rafale aircraft deal was between two governments – India and France – and therefore there was hardly any possibility of India’s interests being compromised in any way.

However, government documents accessed by The Wire reveal the Ministry of Law and Justice had opined that the “core elements of Government-to-Government (G-to-G) character” of the Rafale deal were not acceptable to France and consequently had to be diluted and waived in the final inter-governmental agreement (IGA) signed between the two governments in September 2016.

So what were the two core G-to-G elements that France did not accept? The law ministry gave a clear view to the Ministry of Defence that in G-to-G contracts, “the responsibility for the supply of equipment and related industrial services and performance of the entire contract remains with the foreign government”.

The second condition cited by the law ministry was that “the dispute resolution mechanism remained at Government-to-Government level only”.

Also read: Rafale Deal Reveals How Cabinet ‘Rules of Business’ Suffer Under Modi’s Rule by Fiat

However, in the course of negotiating the IGA, certain sensitive issues arose whereby the French government sought to transfer its own direct responsibilities and obligations to the industrial supplier – in this case Dassault Aviation.

For instance, in the event of a future breach of contract or any other dispute, France insisted India would have to enter arbitration proceedings with the equipment-supplying company, Dassault. Consequently, the French government shied away from providing a direct sovereign guarantee for the performance of the contract. The law ministry saw a direct sovereign guarantee from France as core to the G-to-G character of the deal to purchase 36 Rafale fighter aircraft. This sovereign guarantee was, however, not forthcoming.

The law ministry, though, managed to have one fresh clause introduced in the IGA which mentioned “joint and several responsibility” of the French government and the industrial supplier.

Also read: Post-Rafale, Dassault Investment in Inactive Anil Ambani Company Gave Reliance Rs 284 Crore Profit

But this too fell way short of its advice that the French government take direct responsibility for its future obligations on the performance of the contract by providing a sovereign guarantee.

The French government eventually agreed to provide a letter of comfort which, in legal terms, is much weaker than a sovereign guarantee.

The defence ministry’s main concern was whether the proposed international arbitration in Geneva under the rules of UNCITRAL (United Nations Commission on International Trade Laws) was legally tenable because there was no direct contract between the government of India and the French supplier Dassault.

After all, the Modi government has also been publicly asserting it has no direct dealings with Dassault and its agreement is only with the French government. Consequently, the defence ministry also raised the question of whether the “government to government character of the procurement is maintained by incorporating the provision of arbitration with the French industrial suppliers?”

The law ministry replied to the defence ministry’s query by clearly stating that the Indian government’s direct arbitration with the French industrial suppliers, in this case Dassault, was not tenable since India was not a “signatory or confirming party to the Convention”.

“Indian side have desired during negotiations that the content of the Convention should be made known to the Indian side to ascertain what hold the French government has over the Industrial Suppliers for the execution of supply protocols and what are its legal ramifications to us. However, the French side has not shared the language of the Convention with Indian side,” the law ministry noted.

Also read: With Its Big Little Lies on Rafale, the Modi Govt is Treading a Treacherous Path

Finally, the defence ministry under Manohar Parrikar agreed with the law ministry advice with regard to retaining the core elements of the G-to-G agreement which essentially involved France taking direct responsibility for the performance of the contract with a sovereign guarantee and India avoiding any direct dealing through any future arbitration with Dassault in the event of a dispute.

However, this was not acceptable to France. In the end, the defence minister simply stated that any decision on the waiver of these core elements must be taken at the level of the Cabinet Committee on Securities (CCS). The waiver on these two aspects was finally granted in a CCS meeting held on August 24, 2016.

The final inter-governmental agreement between India and France was signed on September 23, 2016.

Rafale Deal: Dassault CEO Says ‘Not Lying’; Congress Slams ‘Doctored Interviews’

Eric Trappier claimed that the price in the contract for 36 aircraft was brought down by 9% after government-to-government negotiations.

New Delhi: Dassault Aviation CEO Eric Trappier on Tuesday reiterated his statement that his company had chosen its offset partner in the Rafale deal – Reliance Defence – without any external pressure. In an interview to ANI, Trappier also claimed that the price in the contract for 36 aircraft was brought down by 9% after government-to-government negotiations.

“Price of 36 was exactly the same when you compare with 18 flyaway. 36 is the double of 18. So as far as I was concerned, it should have been double the price. But because it was government to government, there was negotiation, I had to decrease price by 9%,” Trappier said.

Also read: Rafale Deal Reveals How Cabinet ‘Rules of Business’ Suffer Under Modi’s Rule by Fiat

“We chose (Anil) Ambani by ourselves. We are also looking at other partners. We already have 30 partners other than Reliance,” Trappier told ANI.

Trappier also responded to Rahul Gandhi’s press conference, in which he had referred to The Wire‘s reportage on ties between Dassault and Reliance and said that the “Dassault CEO is lying”. “I don’t lie. The truth I declared before and the statements I made are true. I don’t have a reputation of lying. In my position as CEO, you don’t lie,” Trappier said on Tuesday.

Congress response

The Congress responded to Trappier’s comments by saying that “dictated interviews” and “manufactured lies” cannot suppress the Rafale scam.

The nation needs a “fair investigation” and not “doctored explanations” on the fighter jet deal, Congress chief spokesperson Randeep Surjewala said.

Also read: Post-Rafale, Dassault Investment in Inactive Anil Ambani Company Gave Reliance Rs 284 Crore Profit

“Fixed match between BJP government and Dassault and PR Stunts of PM Modi and Eric Trappier can’t hide the blatant corruption,” he alleged.

French aerospace major Dassault Aviation has partnered with Reliance Defence Ltd for delivering 36 Rafale fighter jets to the Indian Air Force.

Modi Govt’s ‘Blatant Lies’ Exposed, Says Opposition After Hollande’s Rafale Comments

Congress president Rahul Gandhi on Saturday alleged that Prime Minister Narendra Modi and Anil Ambani jointly carried out a Rs 1,30,000 crore “surgical strike” on the defence forces.

New Delhi: Opposition parties have stepped up their attack on the Rafale deal, alleging that the government’s “complicity, collusion and conspiracy” to benefit Prime Minister Narendra Modi’s “crony friend” has been exposed following former French President Francois Hollande’s comments.

Congress president Rahul Gandhi on Saturday said there was “clear-cut” corruption in the Rafale deal and asked Prime Minister Narendra Modi to clear his position on the issue.

Gandhi’s blistering attack on Modi during a press conference came a day after former French president Francois Hollande was quoted as saying that the Indian government proposed Anil Ambani’s Reliance Defence as the partner for Dassault Aviation in the Rs 58,000 crore Rafale jet fighter deal.

“Why is the prime minister silent? It is a matter related to defence forces, it is a matter related to corruption,” he said.

He also claimed that various defence ministers of the NDA government have been lying to protect Modi.

Gandhi demanded a joint parliamentary committee probe to which Hollande can also be called. “We are absolutely convinced that the prime minister is corrupt… He must clarify,” Gandhi said.

“For the first time probably in Indian history, an ex-French president is calling the prime minister a thief. So, it is very important the prime minister makes it clear what his position is. It is the question of the dignity of the office of the prime minister. It is a defence-related question. It is a question of the future of our jawans, future of our airforce. What I am surprised by is the PM is completely silent. Not one word has come out after (Hollande’s) comments. The gentleman (Hollande) is the ex-president of France with whom our prime minister had a one-to-one meeting in which the Rafale contract was decided.”

He said that because of the PM’s silence, “the people of India now think that our country’s prime minister is a thief.”

“It is very important for the prime minister now to either accept Mr. Hollande’s statement or state that Mr. Hollande is lying and tell what the truth is,” he said.

The hashtag #Mera_PM_Chor_Hai (My PM is a thief) was widely being used by AAP and Congress supporters on Twitter. Congress demanded a Joint Parliamentary Committee to probe into the matter.

The Congress, from its official Twitter handle, said the former French president had exposed “the web of lies” spun by the Modi government.

On Twitter earlier on Saturday, Gandhi that Prime Minister Narendra Modi and Anil Ambani jointly carried out a Rs 1,30,000 crore “surgical strike” on the defence forces.

“The PM and Anil Ambani jointly carried out a One Hundred & Thirty Thousand Crore, SURGICAL STRIKE on the Indian Defence forces. Modi Ji you dishonoured the blood of our martyred soldiers. Shame on you. You betrayed India’s soul,” Gandhi tweeted.

“Cat’s out of the Bag!!! Complicity, Collusion & Conspiracy of Modi Govt in denying the PSU, HAL a 30,000 Cr ‘offset contract’ to benefit PM’s crony friend exposed!” Congress’s chief spokesperson Randeep Surjewala tweeted.

Also read: Indian Govt Suggested Reliance as Partner in Rafale Deal, Hollande Tells French Website

Congress leader P. Chidambaram said, “In the NDA-negotiated Rafale aircraft deal, we have got no aircraft, we have got only lies. What is the new lie that the government will put out in response to Mr Hollande?”

“Defence Minister has been called out again! This time by then President of France, Mr Hollande,” he said.

“President (former) Francois Hollande should also enlighten us how the price went up from 590 crore in 2012 to 1,690 crore in 2015 per Rafale fighter jet? Escalation of a mere 1,100 crore. I am sure the Euro equivalent would not be a problem to calculate,” Congress spokesperson Manish Tewari tweeted.

Another Congress spokesperson, Priyanka Chaturvedi, alleged that “Rafale Minister” and “Reliance Defence’s Publicity Minister” colluded to throw HAL out of the deal and hand it over to their dear friend.

In a statement released on Saturday, the Communist Party of India (Marxist) demanded the immediate formation of a Joint Parliamentary Committee “so that the role of the Prime Minister and government is enquired into to find out the truth of the matter”. The party said that the “Rafale deal is proving to be a first rate scam which the Modi government is desperately trying to cover up”. “The statement of the former President has exposed the claims made by Prime Minister Narendra Modi and Defence Minister Nirmala Sitharaman that the Indian government had no role in it, as a blatant lie,” the CPI(M) said.

The Aam Aadmi Party also attacked the BJP government over the Rafale deal. Delhi chief minister Arvind Kejriwal on Friday demanded that the BJP-led Central government come clean on the Rafale deal in light of former French president Francois Hollande’s purported statement “directly contradicting” its stand.

A Rafale fighter jet. Credit: Reuters/Abhishek N. Chinnappa/File Photo

Taking to Twitter, Kejriwal said, “By hiding crucial facts on Rafale deal, is Modi govt not endangering national security? Former French President’s statement directly contradicts what Modi govt had been saying so far. Can the country be taken for a ride any further?”

Kejriwal asked three questions to the prime minister in his tweets. “One, Why did you get ensure Anil Ambani gets the Rafale offset contract, not anyone else? Two, Anil Ambani has said he has personal relations with the PM. Is this relationship professional also? Who pocketed the profits from Rafale deal – PM, BJP or someone else?”

Addressing a press conference in Nagpur, AAP leader Sanjay Singh said, “The statement made by former French president Francois Hollande on the Rafale deal is shocking and it proves that the Rafale deal is a big scam.”

Rashtriya Janata Dal national spokesperson Manoj Kumar Jha also tweeted about Hollande’s statement, saying he was waiting for Arun Jaitley to come out with more “brazen lies” to defend the deal.

The renewed attack on Modi came a day after a French media report quoted former French president Francois Hollande as saying that the Indian government proposed Ambani’s Reliance Defence as the partner for Dassault Aviation in the Rs 58,000 crore Rafale jet fighter deal and France did not have a choice.

The report in Mediapart, a French-language publication, quoted Hollande as saying, “It was the Indian government that proposed this service group, and Dassault which negotiated with Ambani. We had no choice, we took the interlocutor who was given to us.”

Also read: Full Text of French Report on How Modi Govt Pushed Anil Ambani as Rafale Deal Partner

Reacting to Hollande’s reported remark that is at variance with the Indian government’s position, a defence ministry spokesperson said Friday, “The report referring to former French president Hollande’s statement that government of India insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified.”

The spokesperson also said, “It is reiterated that neither the government nor the French government had any say in the commercial decision.”

The French government on Friday said it was in no manner involved in the choice of Indian industrial partners for the Rafale fighter jet deal, asserting that French companies have the full freedom to select Indian firms for the contract.

In a statement, Dassault Aviation said it decided to partner with Reliance Defence in accordance with the policy of ‘Make in India’.

The opposition has been accusing the government of choosing Reliance Defence over state-run Hindustan Aeronautics Ltd even though the private firm did not have any experience in the aerospace sector.

(With PTI inputs)

In Damage Control Mode on Rafale, Modi Govt Speaks of ‘Unnecessary Controversies’

While the MoD said François Hollande’s remarks should be seen in the context of “conflict of interests issues” raised by the French media, Ravi Shankar Prasad cited a 2012 MoU signed by a Mukesh Ambani company to argue Dassault chose ‘Reliance’ before BJP came to power.

New Delhi:  Former French president Francois Hollande’s remarks on the Rafale deal need to be seen “in its full context”, India’s defence ministry said in a full statement on Saturday evening that marked its first attempt to directly address the charge of cronyism in the agreement to buy 36 aircraft from France.

And on a day when Congress president Rahul Gandhi said Hollande’s disclosure was tantamount to accusing Prime Minister Narendra Modi of looting the Indian taxpayer, the Bharatiya Janata Party fielded senior minister Ravi Shankar Prasad to try and tamp down the escalating controversy.

On Friday, Hollande stirred up a storm by saying that the Indian government had been the one to propose Anil Ambani’s Reliance Defence as a partner for the 36-aircraft deal – a statement that directly contradicted the Modi government’s line so far on the matter.

The defence ministry, however, says that “unnecessary controversies are being sought to be created regarding a statement purportedly made by Hollande”.

Curiously, the ministry states that the French politician’s remarks need to be seen in light of the “conflict of interest” issues that had been raised by Paris-based investigative website Mediapart.

As The Wire reported yesterday, Mediapart’s story takes off on the issue of Reliance Entertainment indirectly funding a film production headed by Julie Gayet, the partner of Francois Hollande.

“The reported statement perhaps needs to be seen in its full context – where the French media has raised issues of conflict of interest involving persons close to the former President.  His subsequent statements are also relevant in this regard,” the defence ministry statement notes.

Also read: Indian Govt Suggested Reliance as Partner in Rafale Deal, Hollande Tells French Website

The Nirmala Sitharaman-headed ministry doesn’t go into further detail and doesn’t elaborate on what “subsequent statements are relevant in this regard”.

Hollande’s reaction to the controversy

Hollande himself has directly and indirectly made two statements in the last 24 hours since his initial remarks that kicked off the controversy. To NDTV, the office of Hollande noted that the French leader “stood by his remarks”. In a story published by news agency AFP, the former president notes that while France “did not choose Reliance in any way”, only “Dassault can comment” on whether India put pressure on the Anil Ambani-led company and the French defence major to work together.

The Indian defence ministry rounded off its statement with two more points. It noted, as it did on Friday as well, that it “had no role in the selection of Reliance Defence as the offset partner”.

“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.In view of above, it is once again reiterated that the Government of India has no role in the selection of Indian Offset partner which is a commercial decision of the OEM,” the statement reads.

Secondly, it slips in one sentence on how Dassault Aviation in 2012 had entered into a partnership with Reliance Industries for the defence sector – this is the Mukesh Ambani-led group of companies and not Anil Ambani.

“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,” the statement notes.

Also read: Full Text of French Report on How Modi Govt Pushed Anil Ambani as Rafale Deal Partner

In his press conference, Ravi Shankar Prasad also emphasised this 2012 MoU to make the case that Dassault’s selection of “Reliance” as a partner predated the 2014 elections which brought the BJP to power.

What Prasad chose not to point out was that the partnership he and the defence ministry referred to was with the Mukesh Ambani-led Reliance Aerospace Technologies Ltd (RATL), which was set up in 2008. As multiple media reports from that time have noted, RATL started hiring key staff to form a roadmap “that included discussions on the role that would be played by Hindustan Aeronautics Ltd (HAL)”.

However, by 2014, this partnership petered out, never going effectively beyond the memorandum of understanding stage.

The two Ambani brothers had by then gone their separate ways and it is not clear what point Prasad was trying to make by mentioning the 2012 MoU since it had nothing to do with the Anil Ambani group, which also uses the word “Reliance”.

Prasad also repeated earlier accusations levelled by Sitharaman – and refuted by the Congress – that  the erstwhile UPA government had effectively scuttled the earlier deal for 126 aircraft. Prasad added a new charge on Saturday – that the UPA put the deal with Dassault on hold because it had wanted bribes which the company had refused to pay.