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Manohar Lal Sharma v. Narendra Damodardas Modi A case analysis
FACTS OF CASE
The case is popularly known as the “Rafale Fighter Jet Case.” The background of this case dated back to 2007 in which the Ministry of Defence of India at the time of the UPA Government, requested to purchase 126 Rafale air jets from Dassault Aviation of France.
It was agreed that 18 jets would be purchased by the Dassault in a “Fly-away” condition and 108 jets to be manufactured by Hindustan Aeronautics Limited (HAL) in India. Even after the agreement, it did not conclude for so many years.
After the 2014 elections when the power changed at the center with the arrival of a new Prime Minister, Narendra Modi, a new inter-governmental deal was sought between the Indian Prime Minister and the French President.
The new deals related to the deal of only 36 Rafale Jets in a ‘Fly-away’ condition from France in place of the old deal of 126 Aircraft was withdrawn by the Defence ministry. The new deal amounted to Rs. 60,000 Crore. Further, a private company was given authority to come up with a joint venture with Dassault Aviation to become India’s Offset Partner as Anil Ambani’s Reliance Group and Dassault later announced a joint venture in the name of Dassault Reliance Aerospace Ltd.
Controversy regarding the new deal started arising and several petitions were also filed before the Supreme Court of India on the ground of irregularity in the Rafale fighter jet deal in 2018. The irregularities filed in the petitions were-
1) Procedural irregularity.
2) Selection of Reliance for the Joint Venture.
3) Change in price of the old and the new deals.
ISSUES RAISED BEFORE THE COURT
Whether the process followed by the Government in procuring 36 Jet Aircraft instead of 126 amounts to procedural irregularity?
Whether the new Rafale Fighter jet deal brings with it pricing irregularity as the new price of per jet is more than that decided by the UPA Government?
Whether the deal is an inter-governmental deal between India and France?
Whether the Central Government proposes the Reliance Defence Ltd as Dassault Aviation’s Indian Offset Partner without the consent of the Defence Ministry as required under clause 8.6 of Defence Offset Guidelines?
ARGUMENTS BY THE PARTIES
Petitioner-
The petitioner contended that there is an irregularity in the contract as the price which was decided during the UPA tenure and in the new deal are not the same. Further, it says that the decision-making process also had some ambiguity in it. The selection of Anil Ambani’s Reliance as the Indian Offset Partner was also in question.
Respondent-
The respondent argued that the central Government agreed on better terms and negotiated the price of the fighter jet and its delivery of it. They also claimed that there was a commercial advantage in purchasing 36 Rafale fighter jets in place of 126 agreed earlier. Further contended that the agreement conforms with the procedure to be followed.
JUDGMENT
The Court in the verdict stated that the Rafale Fighter Jet deal had no irregularities in it and nothing was found against the purchase of 36 Fighter jets by the Indian Government. The prayer sought for ordering an investigation by Central Bureau of Investigation to file an FIR and investigate regarding the deal was also dismissed.
The verdict further added that the Court could not interfere in the matter of the Defence contract as it has a limited scope of judicial scrutiny in it. The court held that in the interest of sovereignty and integrity of India, the scope of judicial review is restricted especially in matters of defense procurement contracts. Court held that the old contract was between the UPA Government and Dassault Aviation which was for the purchase of 126 Aircraft and was not concluded due to unsolved terms between Hindustan Aeronautic Limited and Dassault Aviation due to which it was withdrawn in 2015. This was the reason that the NDA government undertook new intergovernmental agreements for the purchase of 36 Rafale Jets.
The talk between the Indian Prime Minister, Narendra Modi, and the French President was the fresh deal with a fresh procedure. In the matter of selection of Indian Offset Partner(IOP), the court held that as per the Defence Offset Guideline, there is a choice to select any Indian Company as its Indian Offset Partner and the joint venture agreed was valid and is purely a commercial agreement.
REVIEW PETITION AGAINST JUDGMENT
Challenging the verdict of the Supreme Court, three review petitions were filed against the judgment. The petitioners prayed to revise the judgment and claimed that the judgment passed suffers from the errors in it as the court had not taken into consideration critical facts submitted by the petitioner. Further, the petitioner took a plea that the court had not dealt with the consideration of the petitioner's main prayer during the previous proceedings.
Court’s view on the review petition
While dealing with the review petition-
- The Court held that there was no substantial err0r in the judgment.
- It again emphasized that the court has a limited scope of review in matters of defense contracts.
- The court said that it had allowed all counsels of parties to make their elaborate submissions.
- The court also dismissed the claim of procedural irregularity as it did not find any investigation required in the decision-making process.
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