Supreme Court wants to look at government discretion rather than technical issues in Rafale deal.
The latest in the ongoing story of the revised order for Rafale fighter jets is the Supreme Court calling for relevant papers. Based on a PIL filed by two lawyers, on 10 October, the Supreme Court directed the Narendra Modi government to provide the details of the steps taken in the decision-making process without the pricing and technical information in a sealed envelope.
This brings to focus the role of courts in public procurement.
The current government had taken a decision to scrap the previous deal for 126 jets with 18 in a fly-away condition to 36 aircraft in a fly-away condition. Several reasons have been put forth including depleting squadrons and the need to expeditiously ramp up the capacity of the Indian Air Force in the face of existing threat perception, the inability of HAL to deliver on the previous contract due to existing pendency and the price being lower than what was originally negotiated.
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Some of the issues doing the rounds in public include the fact that France has no procedure for Inter-Governmental Guarantee (IGA) with India unlike the US or Russia, although the new procurement order followed this route. France has apparently not provided a sovereign guarantee, only a “comfort letter”, which may not be fit for purpose in the event of any complications. The seat of arbitration is in Geneva, not India, which is a Defence Procurement Procedure requirement.
In some quarters, the question that is being raised is whether the judiciary is the competent agency to go into technical matters of the Rafale deal. The question is counter-intuitive as technical experts are co-opted into issues where expert interpretation or advice is required, and the judiciary is no exception. Is that the real issue or is it factors that go beyond well-laid-out processes that necessitate judicial intervention?
In this case, the Supreme Court is seeking to look at the decision-making process rather than technical issues. This is not the first instance of the Supreme Court looking at technical issues. In the past, the top court has discussed different contractual issues such as the allocation of telecom bandwidth, patents and so on, which are technical in nature.
In defence procurement matters, the entire process is driven by the Defence Procurement Procedure (DPP) and the Defence Procurement Manual (DPM). There are several layers of due diligence, right from the ‘Assessment of Need’ to the final approval by the Cabinet Committee on Security. The DPM is a dynamic document and is constantly evolving to factor in the changing requirements of security needs and procurement processes. However, over the past decade, the value of tenders and contracts has grown substantially and significantly on capital acquisition contracts. For a host of reasons, this has led to contracts being challenged in courts of law and raising the question as to whether the court should intervene in what is largely an administrative function.
Also read: Modi govt tells Supreme Court to figure out if it’s competent to review Rafale case
What is evident in all such instances is that it is not the administrative process that is being questioned, but the exercise of administrative discretion, which can be tantamount to creative interpretation. If such interpretation is perceived to be contrary to public interest in terms of quality of equipment or service, the court is called upon to look into the decision-making process by various agencies or individuals.
The Supreme Court’s judgment in the matter of Michigan Rubber vs the State of Karnataka provides the steer on such matters. To paraphrase its decision, the court’s interference is not warranted unless there is a mala fide intent or misuse of statutory powers. The scope of the court is limited and it cannot interfere where the state acts reasonably, fairly and in public interest.
The issue of procurement cuts across all departments, ministries and service delivery agencies of the government. The court plays a role when there is a perceived violation of laid down processes.
In the ultimate analysis, what is important are the two key aspects of probity and trust as stated by previous defence minister Manohar Parrikar in his foreword to the DPP 2016. He goes on to mention that it is imperative that “the stakeholders of DPP 2016 do not lose sight of these aspects while implementing the DPP 2016, and at the same time ensure that best-in-class weapons and equipment are made available to our armed forces at the most competitive prices. I sincerely hope that the DPP 2016 acts as a catalyst for change, and leads to the outcomes that have been envisaged”.
Also read: Supreme Court merely sniffing secret envelopes to see if there’s a scam in Rafale deal
The Defence Procurement Procedure has proved its efficacy since it first came into place in 2002, with almost Rs 8 lakh crores worth of procurements over time and many more in the pipeline. The process followed in the acquisition of the 36 aircraft conforms to due process. The twist in the story lies in the timelines of the process, and this is what is being questioned by different stakeholders. 
The author is a former civil servant and has worked with the ministry of defence. Her views here are personal.
SUPREME COURT IS NOT THE GOVT.NARENDRA MODI IS THE GOVT.DEMOCRACY PERCOLATES DEON FROM LEGISLATIVE EXECUTIVE JUDICIARY AND MEDIA.INDIAN UNION REPUBLIC IS MADE BY GOVT NOT BY JUDICIARY.SC IS APPELLATE AUTHORITY NOT POLICY MAKERS.WHEN SC INTERVENES IN GOVERNANCE THE GOVT SHOULD CHALLENGES SC ON ITS WHIMS AND FANCIES.TODAY NARENDRA MODI IN HIS SPEEECH AT ALWAR WARNED SC NOT TO BE A TOOL IN THE HANDS OF CONGRESS.
Unfortunately it was Modi, Jaitley and Co in 2010 -2013 who wanted the SC to adjudicate on policy. 2G and coal allocations are glaring examples. Having opened the Pandora’s box, it’s too late now for the BJP to backtrack and wish that the SC does not look intp policy/
It is unbecoming of a court to interfere in Defense issues of Govt.The Petition is biased prejudiced intentional and motivated by few enemies of nation.Courts shouldn’t be a tool in their hands.
Difficult to judge – or speculate upon – what is in the Court’s mind. The technical specifications of the Rafale – contained in a 2007 RFP issued to six global manufacturers, hence widely known within the strategic community- are not being questioned. Unlikely that the apex court would take a harsh view on some departure from established procedures since all the statutory approvals have finally been secured. The case will ultimately turn on price, which is a matter of public interest. The price quoted by Dassault in its tender, which was found to be the lowest, will be the starting point. That will be compared to the final price agreed upon, the increase being analysed in terms of general inflation / currency depreciation and any additional systems that have been installed, beyond the original RFP specifications. 2. Offsets is another issue that has come up. Perhaps the Court will take a view on this.