Rafale deal: Defence procurement processes broadly followed, says SC

Supreme Court of India
No case of "commercial favouritism" in Reliance as offset partner for Rafale: Supreme Court

The Supreme Court said Friday it cannot seek clause-by-clause compliances of Defence Procurement Procedures (DPP) in the Rafale fighter jet deal and opined that the processes have been “broadly” followed.

It also expressed satisfaction with the government’s decision-making process which led to the deal between India and France for procurement of 36 Rafale jets, saying that there was “no occasion to really doubt” it.

The top court, while junking the PILs challenging the Rs 58,000 crore Rafale deal, examined the three “broad areas of concern” — the decision-making process, difference in pricing and the choice of Indian Offset Partner by Dassault Aviation.

Scrutinising the decision-making process, a bench headed by Chief Justice Ranjan Gogoi said though it had no occasion to really doubt the process, even if there were minor deviations then they would not lead to annulment of the deal.

On the DPP, the court cannot seek “clause-by-clause compliances” of the Defence Procurement Procedures. “Broadly, the processes have been followed”.

The bench, also comprising Justices S K Kaul and K M Joseph, said: “We have studied the material carefully. We have also had the benefit of interacting with senior Air Force Officers who answered court queries in respect of different aspects, including that of the acquisition process and pricing.

“We are satisfied that there is no occasion to really doubt the process, and even if minor deviations have occurred, that would not result in either setting aside the contract or requiring a detailed scrutiny by the court.”

It further added: “We have been informed that joint exercises have taken place, and that there is a financial advantage to our nation. It cannot be lost sight of, that these are contracts of defence procurement which should be subject to a different degree and depth of judicial review.”

Rafale fighter jet
Rafale fighter jet


The top court dismissed the key allegation that the government changed the deal and decided to procure 36 Rafale fighter jets instead of 126.

It said: “The need for the aircrafts is not in doubt. The quality of the aircraft is not in question. It is also a fact that the long negotiations for procurement of 126 Medium Multi-Role Combat Aircraft (MMRCA) have not produced any result, and merely conjecturing that the initial RFP could have resulted in a contract is of no use.

“The hard fact is that not only was the contract not coming forth but the negotiations had come practically to an end, resulting in a recall of the RFP. We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircrafts in place of 126.”

The top court said that it cannot “possibly” compel the government to go in for purchase of 126 aircrafts.

“Our country cannot afford to be unprepared/under-prepared in a situation where our adversaries are stated to have acquired not only 4th Generation, but even 5th Generation Aircrafts, of which, we have none. It will not be correct for the court to sit as an appellate authority to scrutinize each aspect of the process of acquisition,” it said.

The bench also took note of the reasons, including unresolved issues between Dassault Aviation and Hindustan Aeronautics Limited, which had led to annulment of earlier deal for procurement of 126 Rafale jets.

“Man­Hours that would be required to produce the aircraft in India: HAL required 2.7 times higher Man­Hours compared to the French side for the manufacture of Rafale aircraft in India,” it noted, adding “issues related to contractual obligation and responsibility for 108 aircraft manufactured in India could not be resolved.”

Indian Negotiating Team (INT) held as many as 74 meetings, including 48 internal and 26 external INT meetings with the French side, it said.

“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. 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…DPP 2013,” it said. PTI