Can Narendra Modi Be Convicted of Corruption for the Renegotiated Rafale Deal?

When the case goes to a trial court, the prosecution only needs to show that the decision-making process disregarded prescribed guidelines and was detrimental to the public interest.

The alleged Rafale scam has finally taken its first baby step towards shifting the scene of action from political rallies to the courtroom. I hasten to add the prefix “alleged” because the trial court acquittal in the 2G scam case is still fresh in my memory. Whether the freshly minted anti-corruption trio (Prashant Bhushan, Arun Shourie, and Yashwant Sinha) will await the Central Bureau of Investigation’s next step, or some other person (Subramanian Swamy?) will take recourse to the complaint route under the Code of Criminal Procedure, one thing is certain – the matter will reach a trial court. It is now a question of when, not if.

The Supreme Court’s observations in its order of October 10 in a writ petition are telling: “…we would like to be apprised by the Government of India of the details of the steps in the decision making process leading to the award of the order for the defence equipment in question…our above order is only for the purpose of satisfying ourselves in the matter.”

The Supreme Court’s inquiry, for now, is limited in scope; but the results of the limited inquiry may trigger further investigation in respect of one of the allegations. The Supreme Court’s future observations on what the Narendra Modi government will submit in a sealed cover (on or before October 29) will probably have a bearing on what the CBI does next.

Also Read: The Real Scandal in L’Affaire Rafale

The principal legislation that deals with public sector corruption in India is the Prevention of Corruption Act, 1988 (POCA). The Act was recently amended by parliament (in July 2018); new provisions were added (such as bribery by commercial organisations) and others were amended (such as criminal misconduct by public servants). The amendment exercise was purportedly necessitated by India’s obligation, under the United Nations Convention Against Corruption, to strengthen its domestic anti-corruption law.

Arun Shourie and Yashwant Sinha and Prashant Bhushan filed a detailed complaint with the CBI accusing Narendra Modi of corruption. Credit: PTI/Subhav Shukla

Crux of the allegation against PM Modi

Sifting through the applicable legal provisions under the recently amended POCA, which, I might add, makes corruption convictions a little harder to obtain, I finally saw the silver lining. Buried deep in the CBI complaint – indeed in the very last pages – is the allegation of criminal misconduct under Section 13(1)(d)(iii) of the unamended POCA. This section  criminalises a bad policy decision i.e. a public servant’s decision that exhibits complete and manifest disregard to public interest with the corresponding result of a third party obtaining pecuniary advantage or a valuable thing.

The prosecution is not required to prove mens rea (wrongful intent) to convict a public servant under the offence in question. The complainants have alleged that Prime Minister Modi’s decision to renegotiate a new defence deal with France was contrary to prescribed guidelines and public interest and that it resulted in pecuniary advantage to a private party. His conduct, it is alleged, amounts to corruption.

It is important to remember that the definition of corruption for policy purposes is different from its definition under criminal law. International institutions, such as the Organisation for Economic Cooperation and Development (OECD), Transparency International, United Nations and the World Bank, all recognise international definitions of corruption for policy purposes. Most such definitions cover abuse of public office for private gain and are useful for policy development, anti-corruption strategies, action plans, and corruption prevention measures. The Indian anti-corruption law aims to achieve a twin objective: provide punishment for bribery and also outlaw bad policy decisions that result in undue private gain.

Unfortunately, Section 13(1)(d)(iii) was deleted from the POCA when parliament enacted the Prevention of Corruption (Amendment) Act, 2018 on July 25, 2018, which came into force the very next day. Fortunately, the provision was in force when the alleged offence took place i.e. during March and April 2015. Thus, its application to the alleged Rafale scam cannot be ruled out.

Interpretation by the Delhi high court

Although Section 13(1)(d)(iii) became a corruption offence in 1988, its scope was not authoritatively decided until the Delhi high court’s 2011 decision in Runu Ghosh v CBI. A division bench of the high court analysed parliament’s purpose for introducing Section 13(1)(d)(iii) and observed that mens rea is inessential to convict an accused under the provision. The high court devised an objective criterion/test by which acts of public servants, in the absence of mens rea, would be judged as being without public interest.

The criterion/test set by the high court is as follows: when a public servant’s decision exhibits complete and manifest disregard to public interest, with the corresponding result of a third party obtaining pecuniary advantage or valuable thing, she has committed an offence under Section 13(1)(d)(iii). In other words, it must be shown that the action of the public servant is the consequence of her manifest failure to observe those reasonable safeguards against detriment to public interest, which, under the applicable circumstances, it was her duty to have adopted.

Also Read: ‘The Rafale Transaction Is a Case of Criminal Misconduct’

If the public servant is able to show that she followed all safeguards and exercised all reasonable precautions, having regard to the circumstances, she would not be guilty under Section 13(1)(d)(iii), despite there being a loss of public interest. The high court clarified that the act contemplated under Section 13(1)(d)(iii) is not merely a wrong choice – instead, it’s a decision that no reasonable person would have taken if in that position. An appeal against the high court’s decision is pending before the Supreme Court. As of today, the Delhi high court’s interpretation of Section 13(1)(d)(iii) stands, and it will be applied to the alleged Rafale scam when the case gets to the trial court.

The coal scam conviction

In May 2017, a special CBI court, in CBI v M/s Kamal Sponge Steel & Power Ltd & Ors, convicted a former secretary (H.C. Gupta), joint secretary, and director in the Ministry of Coal under Sections 13(1)(d) (ii) and (iii) of the POCA; never before had public servants of such high ranking been convicted under Section 13(1)(d) (iii). As regards their conviction under Section 13(1)(d) (iii), the special CBI court based its decision on the finding that the public servants acted in manifest disregard to the guidelines governing allocation of the coal block in question; their actions were held to be “much less without any public interest”. The special CBI court’s observations regarding their conduct are instructive:

rules, regulations or procedures seem to have been given a complete go by…officers seem to have worked in the most casual and arbitrary manner despite the fact that they were senior officers…and were dealing with the allocation of important nationalised natural resources of the country i.e. coal.

The coal verdict makes it apparent that the prosecution was able to satisfy the objective criterion/test laid down in Runu Ghosh: the actions of the public servants resulted in pecuniary advantage to a third party; the actions were a consequence of their manifest failure to follow guidelines; they had a duty to follow those guidelines; and they did not observe reasonable safeguards or precautions against detriment to public interest.

The renegotiated Rafale deal is said to have provided a pecuniary advantage to Anil Ambani’s Reliance Aerostructure Limited. Credit: Bazuki Muhammad/Reuters

Giving the section a quiet burial

The story of the strategised deletion of Section 13(1)(d)(iii) deserves to be told in detail, but I leave that for another day. Although Section 13(1)(d)(iii) was deleted in July 2018, the process of its deletion began in 2013 with the introduction of an amendment Bill.

But why was this legislative proposal moved in 2013? After all, the provision was in force since 1988. First, the correct interpretation of Section 13(1)(d)(iii) was laid down only in 2011; before Runu Ghosh, there was no consensus on whether mens rea was a necessary element of Section 13(1)(d)(iii). Second, the initiation of prosecution in the alleged 2G scam trial (based in part on this provision) created fear in the minds of some public servants who felt that if their decisions were later found to be without public interest, they would be convicted for corruption, regardless of whether they intended to obtain an unfair advantage for any other party.

This fear was exacerbated with the conviction of high-ranking public servants in the coal trial. Soon after Gupta’s conviction, newspapers were flooded with op-eds written by former and current senior bureaucrats. They presented a picture of policy paralysis and declared that if the provision is not deleted, red-tapism and procedural delay would increase, thereby hurting the economy. They even got finance minister Arun Jaitley on board, who issued statements calling for amendments to the POCA.

It is ironic that this provision was deleted by parliament through the same amendment Bill that purported to make the law more robust. The justification for its deletion – provided by a select committee of parliament – is baseless, hilarious even; the committee observed that the provision “may not be appropriate to contain corruption”.

Best weapon for prosecution in Rafale

The other legal provisions quoted in the CBI complaint include Section 7 read with explanation 2 of the amended POCA and Sections 7 and 13(1)(d)(ii) of the unamended POCA – all of which require proving mens rea on the part of the public servants. That would be a Herculean task. In most political corruption cases, especially those involving large public procurement contracts, though the damage to public interest is glaringly obvious, the prosecution has little evidence to show wrongful intention.

Also Read: Indian Govt Suggested Reliance as Partner in Rafale Deal, Hollande Tells French Website

Since Section 13(1)(d)(iii) does not require proving mens rea, it need not be shown that the prime minister or the former defence minister or any other public servant “intended” to provide pecuniary advantage or a valuable thing to the private parties named in the CBI complaint (Anil Ambani or Reliance Aerostructure Limited or Dassault Aviation). All that the prosecution needs to do is to satisfy the objective criterion/test laid down in Runu Ghosh, which focuses primarily on the decision-making process and the prescribed guidelines.

It is in this context that the Supreme Court’s direction of October 10 becomes significant. The Supreme Court simply wants to know the steps that were followed in the decision-making process leading to the award of the defence contract. The Modi government’s response to the Supreme Court’s direction is eagerly awaited.

Ajitesh Kir, a lawyer, is currently a doctoral student at the University of Michigan Law School.