A judgment is an authority for what it decides, the ratio and not for what may logically follow from the decision

Vaishnavi Annasaheb Nirmal | Manikchand Pahade Law College, Aurangabad | 10th March 2020 

Manohar Lal Sharma vs. Narendra Damodardas Modi and others WP (Crl.) 225/2018; RP (Crl.) 46/2019

Fact of case:

The issues arising in this of writ petition relate to procurement of 36 Rafale Fighter Jets for the Indian Air force. The procurement in question, which has been sought to be challenged, has its origins in the post Kargil experience that saw a renewed attempt to advance the strategic needs of the armed forces of the country.

In 2007, the Ministry of Defence issued tenders for the purchase of 126 fighter aircraft, in line with the procedure set out in the Defence Procurement Procedure (DPP). In particular, the Union would purchase 18 from abroad in ‘fly-away’ condition, while 108 would be manufactured in India by Hindustan Aeronautics Limited (HAL) via a ‘tranfser of technology’ from a foreign company. After an extensive selection process, the Union selected the French company Dassault. Dassault manufactures the Rafale twin-engine fighter aircraft. By 2015, price negotiations were in their final stage.

However, in March 2015 Prime Minister Narendra Modi and the President of France announced a new deal for the purchase of only 36 Rafale fighter aircraft. The Ministry of Defence subsequently announced that the tender for 126 aircraft had been withdrawn. The new deal included a 50% offset clause, which required Dassault (and the other foreign companies involved, such as Thales and Safran) to invest 50% of the contract value back into India via the purchase of Indian goods and services. In October 2016, Dassault and Anil Ambani’s Reliance Group announced a joint venture – Dassault Reliance Aerospace Ltd (DRAL) – with Dassault specifying that intends to invest $115 million to partially fulfill its offset obligation. 

In 2018, multiple litigants were filed petitions in the Supreme Court, claiming that the Rafale Fighter Jet Deal suffers from serious procedural irregularities.

Issues:

1. Does the Rafale Fighter Jet Deal suffer from pricing irregularities, considering that the per unit cost of the new deal is higher than what was earlier negotiated under the UPA government?

2. Is the Rafale Fighter Jet Deal an inter-governmental agreement between India and France?

3. Did the Central Government follow proper procedure, given that it went from purchasing 126 aircraft to only 36 aircraft?

4. Did the Central Government propose Reliance Defence Ltd as Dassault Aviation’s Indian Offset Partner without the approval of the Minister of Defence, as required by Clause 8.6 of the Defence Offset Guidelines?

Judgement:

In 2018, the court in a unanimous judgment decided not to order a court monitored investigation of the Union government’s purchase of Rafale fighter aircraft. In 2019, it rejected to review its judgment.

On 21 Feburary 2019, the court agreed to hear a review petition challenging the judgment, filed by Yashwant Sinha, Arun Shourie and Prashant Bhushan. These review petitioners allege that the judgment rests on incorrect factual claims made by the government.

In view of the courts findings on all the three aspects, and having heard the matter in detail, we find no reason for any intervention by this Court on the sensitive issue of purchase of defence aircrafts by the Indian Government. Perception of individuals cannot be the basis of a fishing and roving enquiry by this Court, especially in such matters. We, thus, dismiss all the writ petitions, leaving it to the parties to bear their own costs. We, however, make it clear that our views as above are primarily from the standpoint of the exercise of the jurisdiction under Article 32 of the Constitution of India which has been invoked in the present group of cases.The Court’s approach was pretty simple and straightforward: there are severe limits to the Court’s jurisdiction while examining a case of defence procurement. Lest the point was lost on the average reader, the Court concluded the judgment with the following words: “We however make it clear that our views as above are primarily from the standpoint of the exercise of jurisdiction under Article 32 of the Constitution of India which has been invoked in the present group of cases.”