Was the Supreme Court Misled on the CAG Report on Rafale?

On redactions and procedures regarding the national auditor's reports, were there genuine mistakes or clever wordplay?

New Delhi: Did the Centre try to wriggle out of the Rafale controversy through wordplay or did it actually mislead the Supreme Court in the matter?

A closer scrutiny of the December 14 order of the apex court in which it said it was “satisfied that there is no occasion to really doubt the [decision-making] process [on the Rafale deal],” and the subsequent “application for corrections and directions” filed by the Union of India the following day, points to several discrepancies in the government’s submissions.

Incidentally, the Supreme Court is still seized of the Rafale issue. Two review petitions were filed in the matter.

In its December order, the three-judge bench headed by Chief Justice Ranjan Gogoi had dismissed four petitions that urged the Supreme Court to set up a court-monitored probe into the signing of the Rafale deal. The court held that it found nothing wrong with the deal that the Narendra Modi government signed with France.

Also read: Modi Govt Claims in Supreme Court That Rafale Papers Were Stolen, Probe Underway

The bench said “it was so proceeding in the matter in order to satisfy itself of the correctness of the decision­-making process.” The order “also made clear that the issue of pricing or matters relating to technical suitability of the equipment would not be gone into by the Court.”

A key aspect of the December 14 ruling was that on the subject of “pricing”, paragraph 25 of the judgment said:

“The pricing details have, however, been shared with Comptroller and Auditor General [hereinafter referred to as ‘CAG’], and the report of the CAG has been examined by the Public Accounts Committee [hereinafter referred to as ‘PAC’]. Only a redacted portion of the report was placed before the Parliament and is in public domain.”

As the media reported that the CAG report had not been placed before parliament, or even submitted to the president and that the report had not reached PAC, the Centre filed an application for corrections and directions the following day.

In this, it contended that “these statements appear to have been based on the note submitted by the Union of India, along with the pricing details, in two sealed covers.”

It said this note was in the form of bullet points, and the second bullet point actually stated:

“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”.

So, the Centre’s contention was that “the second part of the sentence, in regard to the PAC, is to the effect that ‘the report of the CAG is examined by the PAC’ and that this was a “description of the procedure which is followed in the normal course, in regard to the reports of the CAG.”

The Centre further said, “the statement that only a redacted version of the report “is” placed before parliament, is referred to in the judgment as “only a redacted portion of the report was placed before the Parliament, and is in public domain”.

Stating that an element of misrepresentation appears to have crept in, the government demanded that the words “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” may be substituted in place of the sentence used in the original order.

Corrections give rise to more questions

From the judgment, it is clear that the bench believed that the pricing details had been shared with the CAG and that the report of the CAG was examined by the PAC. It was only after the order came that the Centre filed the corrections which clarified that neither the parliament nor the PAC had access to the report.

Another question which arises was where was the need for the Centre to refer to the parliament or PAC in the submission when no CAG report had been submitted to them. Did it not believe that the apex court would be aware of the procedure of submission of CAG report? Or was it trying to create a false impression?

Redaction is a rarity, Centre showed it to be routine

In its corrective application, the Centre said its submission was that “only a redacted version of the report is placed before the parliament and in public domain”.

Here again if “is” indicates a description of the procedure, it is absolutely wrong. For redaction is a rare phenomenon in auditing and it can only happen before the CAG report is finalised. Also, there is no concept of redaction of any portion after a report is submitted to the president and is laid on the floor of the House.

It is clear from the bench’s original order that the Centre’s submission obfuscated this issue. The bench, therefore, noted: “Only a redacted portion of the report was placed before the parliament and is in public domain.”

Experts insist CAG report is final, nothing can be redacted from it

The Wire spoke to constitutional and auditing experts who explained the procedures involved. Former Secretary General of Lok Sabha P.D.T. Acharya said “the CAG submits its report to the president and then it comes before the House. The constitution says that the CAG report will be placed on the table of the House. From there it automatically goes to the PAC. The PAC doesn’t and cannot redact the CAG’s report.”

On the PAC’s role, he said, it selects some paras from the CAG report for detailed examination. “All the paras cannot be examined in one year. So they prioritise and pick up certain paras. The CAG also helps in this. He also sits in the committee along with the chairman of the PAC.” Acharya said there is, however, “no question of redaction” of any portion of the report by PAC. “It remains as it is”.

Redaction only possible before report is finalised, submitted to the president

Former deputy CAG K. Ganga explained that “whatever is in the audit report which is presented in parliament is what is available with the PAC. It does a selection of a few paras, which are representative, to get an idea of what the government is doing or to take the government to task or give directions.”

Also read: Missing Links: The Supreme Court’s Verdict on the Rafale Deal

Stating that “there is nothing like a redacted report being sent by the parliament to the PAC or the PAC’s report redacting the original report,” she said, “as per constitutional provisions CAG only presents its report to parliament and that is the final audit report.”

But to reach that final level, she said, there are a lot of intermediate stages – like audit memo, inspection report, management letter, draft para– which all lead to the final report. “What goes into the final report is what we think is important for the parliament to know.”

Redaction only happens in rare cases related to atomic energy, space, defence

On what constituted redaction, Ganga, who retired recently said, it is a rare phenomenon which she personally never encountered in her long service.

“But I understand that it happens in certain matters – like in the context of atomic energy, space or defence – which may be of highly sensitive nature.”

In these cases, the department may say that it agrees with the CAG’s point and assure that remedial action would be taken. Based on such assurance or actual remedial measure, some specific issues may not be put in the actual audit report. “So for security and strategic reasons these steps may be taken. But redaction is rare.”