Rafale Verdict Shows us the Peril of Sealed Covers: Arun Shourie

In an interview with The Wire's M.K. Venu, the former union minister says the SC ignored facts and merely reproduced the flawed defences put out by the Centre.

Note: The Supreme Court on Friday dismissed a group of petitions, all of which broadly asked for a probe into the Narendra Modi government’s controversial decision to buy 36 Rafale aircraft in April 2015. Former union ministers Arun Shourie and Yashwant Sinha, along with advocate-activist Prashant Bhushan, were among the petitioners who filed the case.

In a wide-ranging conversation,  Shourie says that the verdict is disappointment but not a setback and that the decision to approach the apex court was not a mistake. Edited excerpts of the interaction follow.

What is your overall reaction to the Supreme Court’s judgment on the Rafale matter?

I am, of course, disappointed, but also astonished.

“Astonished?” How come?

Well, let us start with what the courts themselves call ‘errors on the face of the record’.

The Supreme Court says:

“The material placed before us shows that the Government has not disclosed pricing details, other than the basic price of the aircraft, even to the Parliament, on the ground that sensitivity of pricing details could affect national security, apart from breaching the agreement between the two countries. The pricing details have, however, been shared with the Comptroller and Auditor General (hereinafter referred to as “CAG”), and the report of the CAG has been examined by the Public Accounts Committee (hereafter referred to as “PAC”). Only a redacted portion of the report was placed before the Parliament, and is in public domain.”

There is no CAG report. There is no report of the Public Accounts Committee. No report– redacted or not – has been placed in Parliament.

No report is “in the public domain.” Four “errors” in one passage!

Let me interrupt you there for a moment. When the court makes such a manifest error, what is the remedy?

I will come to that – and are these just an “error”? They are too convenient to the main thesis for that. But on the question of what can be done: the first and most elementary step that the Supreme Court must take is to disclose who provided this “information” to the court. And it must mete out exemplary punishment to the person concerned for misleading the court in so blatant a manner by feeding it this string of falsehoods.

This also shows the peril of receiving information in private, so to say, in “sealed covers”. You see, if such a thing had been submitted in open court, others, including us, would have immediately pointed out the truth to the judges.

Actually, the sentence that follows that passage points to the same danger. The court proceeds to observe:

“The Chief of the Air Staff is stated to have communicated his reservation regarding the disclosure of the pricing details, including regarding the weaponry which could adversely affect national security.”

“Stated” by whom to “have communicated”, etc.

“Stated” by the same source which has so shamefully and so unpardonably misled the court regarding the non-existent PAC report? By the very government that has an unequaled record of lying? And what was so secret about this letter of the Chief of Air Staff that it could not be shared with the petitioners? At the least, the date on which the letter was written would have told a tale: was the letter written before the “sealed cover” about pricing was handed to the court or after? That simple fact would tell a delicious tale.

As for details of weaponry, we never asked for these at all—so a straw-man has been set up, to be knocked down, and in the heap to bury the question of the price!

Are there any other examples of the same kind?

Indeed, several. Let me just give one. But in this case, it involves not some outside source but, if I may put it at the mildest, our differing memories. Prashant Bhushan had pointed out that the fig-leaf that this was an Inter-Governmental Agreement, and therefore, all the prescribed procedures need not have been complied with did not hold because the contract did not fulfill the three pre-requisites of a contract being an Inter-Governmental Agreement.

The court observes: “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.”

I was in the court throughout the hearing that day, in particular when the Air Force officers were called. They were asked two questions.

First, no planes have been inducted since 1985? After some hesitation – occasioned, I imagine, by some doubt about the sense in which the court was using the word “inducted”– the officer affirmed, ever so haltingly, that, yes, no planes had been “inducted” since 1985. Now, I too did not understand the sense in which the court was using the word “inducted”. For everyone knows that aircraft like the Sukhoi are being manufactured by HAL, and are being inducted into the Air Force even today.

The second question was, in fact, about the Sukhoi. Would you say it is a fourth generation aircraft, a “3 and a ½ generation” aircraft? This was repeated twice or thrice. The officer hedged, saying “fourth generation”, but eventually settling for what the Court was saying “3 and a ½ or 4th generation.”

That was in flat contradiction to what the Air Force says about the Sukhoi, it is in flat contradiction to what is proclaimed at the air shows of the Indian Air Force. But together, the two questions and answers built the case of urgency in acquiring the Raffle, and thereby bypassing prescribed procedures!

But the court says that these deviations, if any, in the procedures, were “minor”.

And that brings us to the sentence that follows the one I just quoted: “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 detailed scrutiny by the Court.”

I cannot speak for others, but we certainly did not urge that the contract be cancelled. Not in the slightest. Nor did we request “detailed scrutiny by the Court”– our plea was for the CBI to register an FIR in accordance with the judgment of a 5-judge Bench of the Supreme Court [of which Justice Gogoi was a part] in the Lalitha Kumari case, and for the CBI to make the necessary inquiries.

Given the condition of the CBI, we had urged that the inquiry be a court-monitored one.  A far-cry from “detailed scrutiny by the Court.”

And ‘minor deviations’? That certainly is the understatement of the year. The fact is – and this had been documented by us in detail clause by clause, step by step, date by date – that no procedure had been followed at all in throwing out the original deal under which the Air Force would have got 126 planes and replacing it by a truncated one in which it would have to make do with 36 planes. And this was done suddenly by the Prime Minister in Paris.

But the court says that the negotiations under the original deal had remained stuck for “more than three years,” and, among other things “the stalemate resulted in the process of the RFP [Request for Proposal] withdrawal being initiated in March 2015.”

Two assertions there. First, how does the assertion being made now about negotiations being stuck for “more than three years” stand in the face of the statement of the CEO of Dassault – a statement made at that time, and in the presence of the Air Chief as well as the head of HAL – that the negotiations were “95 per cent” done, and he expected the deal to be finalized soon?

Second, consider the assertion that “the process of RFP withdrawal being initiated in March 2015.” What a claim!

Does this square with what the-then Defence Minister Manohar Parrikar said immediately after he heard in Goa – while opening some function to do with fish – about the sudden announcement of Modi and Hollande in Paris?

Parrikar had said, “This is the Prime Minister’s decision, and I support it.” He had said, “This must have resulted from discussions between the Prime Minister and President of France.”

Do these betray any knowledge that the negotiations were stuck, or of “the process of RFP withdrawal being initiated in March 2015”?

The statements of the blogger [Arun Jaitley], and indeed the submission of the government itself to the court showed that all the so-called approvals took place after the sudden announcement of the Prime Minister in Paris, well after the announcement.

Cartoonist: Mika (@MikaAziz)

But isn’t it the case that the very Defence Procurement Policy and guidelines that the petitioners cited allow for procedures to be bypassed when necessary?

I am so glad you brought this up. Because in relying on a provision to that effect, the court takes what to me seems a dangerous step — a step that gives a blank cheque to everyone who controls a government the way this PM does.

The court says, “…We, however, also notice Clause 75 of DPP 2013 which reads as follows: ‘75. Any deviation from the prescribed procedure will be put up to DAC [the Defence Acquisition Council] through DPB for approval.”

Now, this provision, and similar ones in other guidelines are included only for emergencies: Kargil breaks out; you need spares; you can’t go through floating Requests for Proposals, tenders, conducting evaluations of tenders, and so on. You have to decide immediately, get the material where you can, and then have those decisions ratified. The provisions are not meant for aircraft whose life is to be 30 to 40 years, whose delivery is to commence four-five years from the date of the decision.

If we go by the inference that the court seemingly draws from invoking such a provision, everyone at the helm will have a carte blanche to do what he wills, and then take it to a rubber-stamping body and get them to approve what he has done. These DACs and other committees are rubber-stamping bodies under a person like the present PM.

But are we not missing the main point, the main concern which underpins the court’s verdict? After pointing to that three-year stalemate, the court observes two things.

First, it says that “Our country cannot afford to be unprepared/underprepared 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.”

Let us just take that one first. That was precisely our point—that what Modi had done was precisely to keep our Air Force from acquiring what it needs for defending our country. The original Request for Proposal aimed at fulfilling three objectives: acquiring 126 aircraft; second, obtaining full transfer of technology; and, third, their manufacture in India—only 18 of the 126 were to be bought in “fly-away” condition. The second and third objectives are absolutely necessary for our acquiring precisely what the Supreme Court is anxious about—the capacity to meet the challenge that our adversaries pose. Modi cut the scale from 126 to 36. He completely gave up the condition about transferring technology. He completely gave up the objective of producing the remaining 108 aircraft in India. So, he has left us completely at the mercy of foreign suppliers.

But the court also says another thing: that it would have taken much longer to produce the aircraft in India.

Unfortunately, the court has relied on a submission by the Government which is laughable. The judgment reproduces what it has been told by the Government:

“Man­ Hours that would be required to produce the aircraft in India: HAL required 2.7 times higher Man­ Hours compared to the French side for the manufacture of Rafale aircraft in India.”

When you are considering planes that are to last 30-40 years, is the the criterion to be the man-hours that making a plane at present involves?

Obviously, in the first stage, infrastructure for producing the planes would have to be set up in India. But is one to shut one’s eyes to what would be the situation in the future? We would have the infrastructure, the technology, the skills to make the planes on our own. We would have the capacity not just to produce the planes, we would have the capacity to speed-up the manufacturing as much as our requirements dictate. And to maintain them on our own.

And what is the position that has resulted from Modi’s decision? Apart from the danger of being dependent on a foreign supplier, we are in a queue—Dassault will attend to our needs when it has fulfilled orders it has received earlier: from Egypt, from Qatar, to say nothing of the orders it has from the French Air Force.

And as for what the government is suddenly saying about the incapacity of HAL – how sad that the court has taken at face-value what a government compelled to justify the decision that Modi unilaterally took is saying now. How does it compare with what the former Chairman of HAL has testified to on record – about the range of aircraft that HAL has been and is producing today? About state-of-the art Sukhoi it is producing today?

One of the principal points in your criticism of the deal has been the threefold increase in the price per aircraft. What about the court’s findings on this score?

After recalling that fiction – about the non-existent PAC report – the court says that it has “examined closely the price details . . .” submitted by the government.

It then restates the claims of the government –“Suffice it to say that as per the price details, the official respondents claim there is a commercial advantage in the purchase of 36 Rafale aircrafts. The official respondents have claimed that there are certain better terms in IGA qua the maintenance and weapon package.”

Having given the official assertions a verisimilitude of legitimacy by reproducing them and not including the facts that had been set out by petitioners like us, the court observes, “It is certainly not the job of this Court to carry out a comparison of the pricing details in matters like the present. We say no more as the material has to be kept in a confidential domain.”

There is a Latin phrase for such reasoning, but I will keep it in the confidential domain for fear of falling afoul of the court!

And I am afraid, that is not an exception, it points to the pattern of the judgment. Take one example. A key question was: on what reasoning was the requirement for 126 planes suddenly cut down to 36?

After setting out the Government’s assertions – that fiction about the stalemate, that business about not keeping our country “unprepared/underprepared”– the court suddenly says, “We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircrafts in place of 126.” And then that it “cannot possibly compel the Government to go in for purchase of 126 aircraft”. But was anyone requesting the court to compel the Government to purchase 126 aircraft? Again a straw-man, so that it may be knocked down.

The court says it is not its job to look into pricing and that it cannot sit in judgment on the requirement of 126 aircraft having been chopped down to 36. And yet, in a way, it says things that have been projected by government spokesmen to vindicate everything that the government has done! What about the third question—that of choosing Anil Ambani’s companies as the offset partner?

That portion of the judgment is beyond comprehension. Not one fact, not one fact has been taken into account, and yet a certificate of good conduct has been given! The court repeats approvingly the government’s assertion that it would come into the picture in regard to the offset partner at a much later stage, that it was entirely up to Dassault to choose whichever firm in India it deemed fit.

In fact, clause after clause of the offset guidelines required that Dassault furnish the name of the offset partner and set out its qualifications for undertaking the work at the very time it submits its technical proposal; that the offset arrangement would be examined by the Defence Acquisition Manager, and would be personally approved by the Defence Minister; that six-monthly reports about the work done by the offset partner be submitted; that the government would mandate that the offset partner be changed if it found him unable or unqualified for the task, etc.

Much of this was changed by a retrospective amendment! We pointed this out – that the amendment was made retrospective itself told the tale: it was designed to enable the government to feign ignorance. Indeed, we pointed out that, in spite of this shameful amendment, other clauses which remained unamended still required that the offset partner meet specified qualifications, and that Anil’s companies met none of them.

The court ignores every single fact that was brought on record. It does more.

It confounds Mukesh Ambani’s cash-rich Reliance with Anil Ambani’s debt-ridden Reliance! It repeats, and thus accepts at face value the Government’s sudden doubts about HAL: “…the suggestion of the Government seems to be that there were some contractual problems and Dassault was circumspect about HAL carrying out the contractual obligation, which is also stated to be responsible for the non-conclusion of the earlier contract” – thereby shutting its eyes to what the CEO of Dassault had himself stated about HAL’s capabilities, shutting its eyes to the fact that Dassault had, in fact, entered into a work-share agreement with HAL at the time.

Unfortunately, that is the pattern. Officials in the defence ministry had noted that the law ministry had urged that we must seek a sovereign guarantee from France. Instead, the government has settled for a “letter of comfort” which has no legal force. This was raised before the court as an example of how the interests of the country had been sacrificed. The court has shut its eyes to the question.

The statements of the then President of Hollande – that Anil Ambani “was part of the new formula of the Indian Government,” that France was left with “no choice” in the matter is dismissed on the startling ground that “there has been a categorical denial, from every side, of the interview given by the former French President . . .”

“Every side”? That must mean the three collaborators—the Government of India, Dassault and Anil Ambani!

Hollande indeed has reaffirmed what he said.

What is the remedy? Will you people file a review petition? What should be done in such instances?

Whether a review petition should be filed or not—on that we will be guided mainly by Prashant’s assessment.

There is, of course, the difficulty: the petition will go to the same three judges. But in my view the real remedy is a different one: it is for each of us to read such judgments, to examine them, and to spread far and wide the results of our examination.

But wouldn’t you agree that this is a big setback at least for the moment? Was it, in retrospect, a mistake to go to the court?

Of course, the judgment – not just the conclusion, but the reasoning – is a disappointment. But as for words like “setback,” “failure”, and whether we should have gone to the court or not, I have a different view. When the facts are so clear, and you take the matter to, say, the court, two outcomes are possible.

If the court upholds your averments and grants your prayer, you can advance to the next step to nail the mischief. If, in spite of the facts, it does not, you have in a sense proven your point: for then you have once again given people the opportunity to see what the condition of our institutions is.

Please remember that we alone are not on trial. The court is too!

Update (12:30 PM, December 16, 2018):

Since we talked, there has been a development. The Government has filed an “Application for correction” with the Supreme Court. It says that the Court has misread what the Government had said in the document they gave in sealed cover, and to that extent the text of the Judgment should be “corrected”. What do you infer from this unprecedented development?

This application makes the matter all the more delicious! First let us see what the Government says it had stated in that document. Here is the passage:

“The Government has already shared the pricing details with the CAG. The report of the CAG is examined by the PAC. Only a redacted version of the report is placed before the Parliament and in public domain”.

Government claims that it never said that the matter had been processed by the CAG. It never said that there is a CAG Report. It never said that there is a Report by the Public Accounts Committee. It never said that this PAC Report has been placed in Parliament or that it is in the public domain. It only described what happens in the normal case!

Three points become obvious.

First, either the wording was such, or was so devised as to lead the Judges to conclude that the process had been completed. Or that three Judges of the highest Court of our country cannot understand plain English. Or that one Judge “misread” the passage, and the other two just took his word for it.

Second, it is true that “is” in the passage has been replaced by “has been” at two places. That would mean that there is someone in the Supreme Court—perhaps in the staff that assists the Judges or prepares preliminary drafts?—even more loyal to the Government than the Government itself. The Supreme Court must reveal who is responsible for this substitution.

But there is in addition a third point, that truly tells the tale, and reinforces what I said about the nature of this Judgment. Please read again the passage from the text of the Judgment with which we had begun the interview. And now read the passage that the Government says it had sent the Court. The substitution of “is” by “has been” apart, the passage in the Judgment is almost a verbatim reproduction of what the Government sent the Court. Does this show any examination by the Court of what the Government told it? Does it show any attempt to check what the Government had stated? Does it show what the Courts always demand of others—“an application of mind”? I fear that this is the nature of the entire Judgment. And we must be grateful to the Government for giving us a glimpse of this nature of the Judgment— it is a cut-and-paste job. What the Government said, has been reproduced, sometimes in summary form, sometimes, as in this instance, with modifications that make matters even more convenient for the Government. And what we put forth has been completely ignored.

May I modify what I said at the conclusion of our conversation? I said that not just us, the court is on trial. I would now say, “Not us, the Court is on trial”!