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PMO ‘monitoring’ Rafale deal progress is not tantamount to parallel talks with French side, govt tells SC

 

The submission follows the court’s directive on Tuesday last that the government respond to the Rafale deal case review petitions by Saturday. The Centre had sought a whole month to respond.

The Prime Minister’s Office (PMO) was “monitoring” the progress of the 36 Rafale jets’ purchase deal, but this cannot be taken as “parallel negotiations” with the French side, the government told the Supreme Court on Saturday.

The submission follows the court’s directive on Tuesday last that the government respond to the Rafale deal case review petitions by Saturday. The Centre had sought a whole month to respond.

“The monitoring of the progress by the PMO of this government to government process cannot be construed as interference or parallel negotiations,” the government said.

A series of reports published by The Hindu had revealed that the PMO was conducting “parallel negotiations.” A Defence Ministry note that was published said the “parallel parleys” had “weakened the negotiating position of MoD [Ministry of Defence] and Indian Negotiating Team.”

The government said these “selective” reports, based on “some incomplete internal file notings procured unauthorisedly and illegally” did not reflect the final decision of the competent authority of the Union government. They cannot form the basis of a review petition in the apex court.

The two affidavits filed by the MoD said the actions of the review petitioners, who include former Union Ministers Yashwant Sinha and Arun Shourie and senior lawyer Prashant Bhushan, “tantamount to questioning the sovereign decision concerning national security and defence.”

The government attacked the court’s April 10 judgment agreeing to hear the review petitions on the basis of the Rafale purchase documents published in the media. The government said the judgment would now be taken to imply that any secret document can be obtained through any means and put in the public domain without attracting penal action.

“This could lead to the revelation of all closely guarded State Secrets relating to space, nuclear installations, strategic defence capabilities, operational deployment of forces, intelligence resources in the country and outside, counter-terrorism and counter-insurgency measures etc. This could have implications in the financial sector also if say budget proposals are published before they are presented in Parliament. Such disclosures of secret government information will have grave repercussions on the very existence of the Indian State,” it cautioned.

The government countered that the Defence Procurement Procedure (DPP) was turned on its head when Prime Minister Narendra Modi and the French President announced the purchase in a joint statement on April 10, 2015 – that is, well over a year before the Cabinet Committee on Security (CCS) approved the purchase on August 24, 2016. The DPP mandates that any defence deal worth over Rs. 1000 crore first requires CCS approval.

To this, the government simply claimed: “DPP does not mandate approvals prior to conveying an intent or making an announcement.” It said a waiver of sovereign guarantee in Inter-Governmental Agreements (IGA) was “not unusual”.

In contracts signed with Rosoboronexport, the requirement of bank guarantees was waived off in view of assurances provided through a ‘Letter of Comfort’ from the government of the Russian Federation, the government said, adding, “Similarly, in Foreign Military Sales (FMS) with the US government, no sovereign/bank guarantee is signed.”

Further, in the Rafale procurement, the French government had proposed to provide ‘outstanding guarantees’ as per the IGA and a ‘Letter of Comfort’ from the French Prime Minister, the government noted.

It reiterated that it had no role in the selection of the Indian Offset Partner, which is a commercial decision of Dassault Aviation.

The government dismissed allegations such as the “Reliance Group paid 1.48 million Euros to former French President Francois Hollande’s partner’s venture.” It said these charges were “matters of individual perceptions” of the petitioners.

It said DPP-2013 was followed and approval of the Defence Acquisition Council was taken for the procurement of the Rafale aircraft. The Indian Negotiating Team conducted comprehensive negotiations with the French side for about a year, holding 48 internal and 26 external meetings with the French side. The approval of the CCS was taken before signing the IGA.

Besides, the Comptroller and Auditor General (CAG) had concluded that the price of 36 Rafales was 2.86% lower than the audit aligned price, apart from additional benefits that would accrue.

The CAG has acknowledged that the Rafale deal was a better bargain than the earlier aborted deal with Dassault for 126 Medium Multi-Role Combat Aircraft (MMRCA). Though the price discovery of 126 MMRCA was determined out of a global competitive tender, the reasonability of the price for Rafale through the IGA was established by CAG audit, the government pointed out.

While the past process of 126 MMRCA could not come to a conclusion in 15 years, the Rafale deal was concluded in over a year.

The Rafale procurement was on schedule with the deliveries of the aircraft commencing September, 2019 and training for the Air Force team had begun in France, the government said.