Here Are All The Questions That The Rafale Deal Raises

The last two days were baffling for me to say the least. I was shocked for a moment when I got to know that the Supreme Court has dismissed all writ petitions against the Rafale deal. There were too many aspects of the case that hadn’t even been touched in the Court yet. Wild conspiracy theories came to my mind, such as Judge Loya’s mysterious demise, PM Modi’s hobnobbing with the CJI during a dinner at SC premises and I wondered if any or all of those factors had influenced the verdict. Then I went to Twitter to check the trail of tweets regarding the case and it became evident that such a decision was made because of many reasons and a malicious one as well.

Before we go into the judgement, let us see what the case is all about. Essentially, there are two contentious issues about the deal. One is with the pricing and unprecedented increase in cost and the other is with the choice of the offset partner.

To respond to a Twitter user arguing that the Modi government was being falsely accused of hiking the price of the jets, I was forced to do the basic math and prove him wrong.

To understand the selection of the offset partner, we need to look at the fundamentals of the deal itself. The IAF is in need of modernizing its fleet of jets so with the approval of the erstwhile government in 2007, it initiated due diligence of several manufacturing companies and submitted its preferences to the government which in turn looked at pricing and other factors and decided on Rafale jets. This means it is a government contract to buy these jets from a foreign company. This contract should ideally go through the French government and to Dassault, the manufacturer of Rafale jets. A sovereign guarantee becomes relevant when the deal is between the two governments.

From the time the due diligence started, HAL was always the default offset partner because no other company in India has the expertise, experience and resources. If there were a list of such companies would have been made and their due diligence done before the Indian government would have had projected HAL to the French government and Dassault. Even after this, there were issues that HAL had to iron out with Dassault and finally a work share agreement was signed between them in 2014. If Anil Ambani’s RDL had existed in 2014 or prior to that and if it had the expertise and experience, it would have been eligible to be evaluated as the offset partner. The Modi government has been wrongly claiming all along that it is upto Dassault to choose the offset partner. Buyer is always the King so the seller will always try to go by the terms of the buyer as much as they can, especially in cases of such high profile and high worth deals. This is fundamentals of business. Dassault was given HAL as the offset partner before and they had collaborated till 2014. So replacing HAL with RDL has to be the decision of the Modi government.

Why the SC dismissed the case has many aspects to it. First of all, the court felt it was not the authority to decide on the pricing issue. Secondly, the court cited lack of evidence for the allegation that the deal was arm twisted by the Modi government to make RDL the offset partner. There wouldn’t be any documented proof to it. French ex-President Francois Hollande has already mentioned that the deal would have been a no go if Dassault hadn’t agreed to Modi government’s demand to make RDL the offset partner. The proof for it has to be interpreted from four aspects.

1) The French government has refused to give a sovereign guarantee to the Indian government. This translates to the situation where if in case of a conflict between Dassault and RDL or IAF, the French government will have the choice to not take any responsibility or be part of any arbitration. Such a decision would have been made only because of the choice of the offset partner in India because until HAL was replaced by RDL, the French government had not made the decision.

2) The completely incomprehensible and mind boggling investment that Dassault has made into a defunct Anil Ambani company. Why was such an investment made and why AFTER RDL was confirmed as the offset partner? Why invest now? Why not two years before or 10 years later? The timing is completely suspect and the investment warrants an investigation. Is that kickback money which Dassault doled out for getting the deal, which has been channeled into the company?

3) The complaint Sherpa, a French legal NGO has lodged with the National Financial Prosecutor’s office in France alleging misappropriation and corruption in the deal and asking for an investigation. This should have been submitted to the SC with the argument that the deal’s integrity is under the cloud of suspicion even in France.

4) Whether RDL has the expertise, experience and resources to be the offset partner of Dassault to manufacture and maintain the Rafale jets. The government has released an audit report this year to back up its claim of HAL not having enough expertise to be the offset partner. Why was this audit of HAL not done from 2007-2017? Why now? Its timing is again a suspect. Where is the similar audit report for RDL and the proof that RDL has the expertise and resources to be the offset partner? Dassault must have also done its due diligence on both HAL and RDL. Where are those reports?

Neither the SC judges nor eminent lawyers who have lodged the case against the deal seem to be interested in probing these points and asking pointed questions about them. These are the areas which could be used as circumstantial evidence to weave a story line and prove that Modi government forced Dassault to accept RDL as the offset partner.

The reason why the Court didn’t want to delve into the pricing aspect became evident when in the judgement the Court has mentioned that the CAG audit report of the deal has been verified and ratified by the PAC and is available in the public domain. This is part of the information that the government gave to the Court in the sealed envelope. The government itself has been delaying the CAG audit of the deal till now so there is no question of PAC even seeing the report forget ratifying it. This blatant lie of the government was called out as soon the judgement was published in the public domain. The response of the government has been even more bizarre. In its statement, it has mentioned that there is a typo error in the document and “has been” was wrongly typed instead of “will be” and it will be requesting the Court to edit the judgement to make the changes.

Simply editing the judgement of any case in itself warrants a thorough review by the relevant court. When such a situation arises in the apex court of the country against the government because of an error that could have affected the outcome of such an important case, then it becomes impossible. The judgement in itself will have to be scrapped and the case reopened.

‪What has to be noted here is the way in which the Supreme Court treated the contents of the sealed envelope as highly sensitive information when it was nothing more than misinformation. By blaming it on grammatical correction and misinterpretation the government is trying to put the onus of the flawed verdict on the Court when it is the government itself that has misguided the Court. But I believe part of the fault lies with the judges as well. A multiple bench, when constituted for a case, allows multiple judges to review the case independently so that the review can be thorough and the judgement is flawless. Here all three judges decided to take the government’s document on face value when the case was petitioned against the government itself. This doesn’t necessarily mean the judges had to be suspicious about the government. All they had to do was to check each aspect of the case thoroughly including the CAG report and verifying the government’s claim with the PAC chief.

The opposition parties are demanding for a JPC probe and in the light of the proof of the government misguiding the SC to give a skewed judgement in its favor, it would only serve to unite them and their voice would grow louder now that general elections are just a stone’s throw away. The situation can be easily diffused by the government by changing the offset partner. But it is the autocratic and obstinate nature of Modi and Amit Shah because of which they are clouding the minds of people and even that of judges of the SC with their blatant lies and deception. Why are they backing Ambani with their lives? They are piling on one lie on top of another to protect Ambani and itself from getting exposed. Looks like it is going to get choked between the devil, which is the case in the SC and the deep sea, which is the opposition’s demand for JPC and an aggressive PAC.

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