Rafale Scam: Modi Govt’s Reply in Supreme Court Hides Its Wrongdoings and Violations of Procedure, says Ex-MoD Official
Due process was not followed in the Rs 59,000-crore Rafale deal when PM Modi announced it in Paris without any proposal, and his government cannot explain why decisions taken by the defence ministry were taken by PM Modi himself in this case.
Modi government’s 16-page submission in the Rafale case to the Supreme Court, which was also shared with the petitioners on the orders of the apex court, only “fuzzifies” and “profundifies,” in an attempt to conceal that the Rs 59,000-crore deal with France “doesn’t fulfil the prescribed rigmarole of defence capital acquisition”.
Sudhansu Mohanty, a former Financial Adviser (Defence Services) in the Ministry of Defence who retired in May 2016 – a year after negotiations on Rafale deal began – wrote a detailed piece on the “disingenuous claims” and “violations of procedure” as Modi government pushed for the Rafale deal against the written advise of senior ministry officials.
Mohanty clearly states “that the announcing of the intergovernmental agreement (by PM Narendra Modi in Paris on April 10, 2015) didn’t have the approval of the Defence Acquisition Council or the defence minister, let alone the Cabinet Committee on Security, hence it doesn’t fulfil the prescribed rigmarole of defence capital acquisition.”
As stated in its submission to the Supreme Court, Modi government confessed that even the Acceptance of Necessity for 36 Rafale aircraft for the Indian Air Force (IAF) was first considered on May 13, 2015 and there was no discussion prior to it for Modi to make that announcement. When Justice KM Joseph questioned the Attorney General in the Supreme Court on these lines, Modi government’s law officer could not provide any answers for what are evidently post-facto excuses to cover up PM Modi’s announcement.
As Mohanty rightly questions, “So, is the government’s submission that “our adversaries inducted modern aircraft and upgraded their older versions” and “an urgent need was felt to arrest the decline in the number of fighter squadrons in IAF and enhance their combat capabilities” a mere post facto excuse? Was it trotted out to segue the “intent” in Paragraph 20 of the Indo-French Joint Statement issued on April 10, 2015?”
This essentially remains at the core of the Rafale scam. When government was already negotiating the 126-aircraft deal, on what basis – and without any IAF or government advise – did PM Modi decide to buy and announce procurement of only 36 Rafale jet? The higher price paid for the aircraft then, the subterfuge of “urgent need” in violation of procedure, the selection of Anil Ambani as an offset partner all flowed from that one unexplained decision by Modi.
Mohanty is up front in stating that “the attorney general had to gingerly concede the non-existence of a sovereign guarantee, in lieu of which the French government has given only a ‘letter of comfort’.
The ‘letter of comfort’ provided by the French government is neither here nor there – there can be no comfort forthcoming! Put simply, it’s a ‘letter of comfort’ that’s not legally binding, falling short of a sovereign guarantee.”
He further explains, “A ‘letter of intent’ as used in international contracts is at best morally binding, more akin to a wedding engagement. Either party can renege and go its own way – and with no legal and contractual obligations devolving on it to honour its earlier ‘moral’ commitment. But with mobilisation advance and milestone payments de rigueur in any fabrication and turnkey contracts, it has the potential to imperil the buying nation’s interests.”
“For there is no certainty that the successor President or Prime Minister of the French government will honour the terms – they may or may not honour the past ‘letter of comfort’, and in the absence of legally enforceable terms in the event of any violation of the terms of contract by the supplier, the buying country is helpless to recover the advances paid,” the former MoD official warns.
Pointing to the gross violation of rules by PM Modi, Mohanty states, “To preempt such eventualities and to protect government interests, since such contracts involve public money paid out of the Consolidated Funds of India, Rule 172(1) – Advance payment to supplier – of the General Financial Rules (GFR) 2017 prescribes that: “While making any advance payment as above, adequate safeguards in the form of bank guarantee etc. should be obtained from the firm”. This acts as a safety net for the government.”
Mohanty further argues that “The government’s line of argument in its submission sounds hollow. Questions will always be raised on the procedure followed and why the IGA was resorted to. The government, for all its wordy elaboration of the procedure followed since the IGA announcement (now called ‘intent’), economises on its inputs prior to it. It says “the process for RFP (request for proposal) withdrawal was initiated in March 2015 and the RFP for 126 MMRCA was finally withdrawn in June 2015”, but shares no material details that would support this laconic statement.”
“But the information available and submissions made by the government clearly reveal that due process wasn’t followed. Going by their submission, the streamlining of defence procurement began in December 2002, and over time the DPP was revised and enlarged through several versions – to be followed scrupulously,” he states.
“Despite this affirmation, the DPP wasn’t followed, and the procedures it lays out were given short shrift. For a government that puts emphasis on observing the highest standards of transparency, probity and public accountability, speaks of self-reliance as a major cornerstone of its policy, and gives a boost to Make in India (Preamble DPP 2016), not to follow these procedures shows it doesn’t walk its talk,” the former bureaucrat adds.
In fact, Modi government has resorted to subterfuge in its submission to the apex court. As Mohanty explains: There are other disingenuous claims. For a start, the Defence Procurement Policy 2013 and the DPP 2016 have been mixed up, used interchangeably, fuzzifying the declamations in Para 5: “Defence acquisition is not a standard open market commercial form of procurement… decision making remains unique and complex… Defence procurement involves long gestation periods… delay in procurement will impact the preparedness of our forces… The needs of the armed forces being… an uncompromising aspect, flexibility in the procurement process is required.”
“These lines are from the preamble of the DPP 2016. But in April 2015 when the IGA was announced, it was the DPP 2013 that was in effect, and was the basis of signing the Rafale contract. In fact there wasn’t even a preamble in the DPP 2013 – perhaps this is why allusion is made to the preamble without citing the year!,” he lays the truth bare.
Mohanty also refers to an exclusive news-report of NewsCentral24X7 which showed that the benchmark price was increased from Euro 5.2 billion to Euro 8.2 billion on the direct approval of a committee headed by PM Modi, “Another concern is the change in the benchmark price. If for the sake of argument we accept the government’s contention that the price details are secret, media reports suggest that the negotiating team came up with a benchmark price, but it was overruled by the ministry. What are the government’s justifications for overruling the recommendations of its own negotiating team?”
“Again, going by information available in the public domain, the Defence Acquisition Council headed by the defence minister and comprised of all senior functionaries of the Ministry of Defence didn’t approve and recommend the case for procurement. Instead, they left it to the Cabinet Committee on Security to take a decision on a business area allocated to the MoD. Not once, in my fallible memory of defence capital acquisition, can I recall such an instance as this,” he states.
As the Supreme Court considers a decision which has been reserved by it, it must note the concluding words of Mohanty: “The patchy details provided, and the government’s profundification that the price of Rafale is only for defence experts’ eyes – not for the lay citizenry! – and is beyond the pale of judicial review, is dismaying. The government seems to have forgotten that when a country procures defence equipment, it is committing the public’s money drawn from the Consolidated Funds of India.”
He concludes, “How this information could be kept outside the ken of public knowledge is intriguing. And how such actions in a constitutional democracy governed by the rule of law could lie outside the ken of judicial oversight is puzzling!” That puzzle needs to be solved by the Supreme Court. It has no other choice.