• Supreme Court asking Centre to provide pricing, offset details for Rafale deal is a big blow for Modi

    Nitya Chakraborty

    November 5, 2018

    Bad days are staring at the Narendra Modi government just six months before the scheduled elections to the Lok Sabha in 2019. The CBI administration is in tatters, both the top bosses of this premier investigation agency of the country, are fighting in courts, the RBI Governor Dr Urjit Patel has threatened to resign over the interference by the Union Finance Minister Arun Jaitley and now, the apex court of the country, in its directive on October 31, has asked the Modi government to submit within 10 days to the court the Rafale price and offset partner details.

    These are the details which the Modi government has been avoiding since the controversy started by saying that these are under Official Secrets Act and cannot be revealed. But the SC bench headed by the Chief Justice Ranjan Gogoi has expanded their area of probe from the parameters set in their earlier October 10 directive when they said that the Government would have to submit the details regarding decision-making only by October 29 and they are not going into the pricing and technical details.

    The SC bench, on Wednesday, asked the Government to furnish in sealed cover details of the pricing and its advantages in 10 days. This turn-around by the bench from its earlier milder position taken on October 10 is very significant in the current volatile political weather

    But in a significant turn, the SC bench, on Wednesday, asked the Government to furnish in sealed cover details of the pricing and its advantages in 10 days. This turn-around by the bench from its earlier milder position taken on October 10 is very significant in the current volatile political weather. As advised, the Government, mainly the defence ministry, submitted all the details relating to the decision-making process by October 26 and it is quite likely that after going through those documents, the bench was not satisfied and wanted to probe more — including the issue of pricing — before arriving at any judgment. The next hearing is on November 14, when the Assembly elections process in five states will be already on and the Court’s observations during the hearing will be crucial for the Modi government in general and the Prime Minister in particular.

    As of now, the Government has taken the position that there is no question of giving the details of the price of Rafale, since it is covered under the Official Secrets Act, 1923 and so, in the affidavit to be submitted within the next 10 days, the Government will explain its position on the basis of the secrecy and will elaborate on why it is not possible. The learned judges will then examine whether the Government’s explanation is sustainable and they will come out with their views on this government’s inability at the November 14 hearing.

    The bench has sufficient information with them mentioned in the petitions challenging the Rafale deal, wherein the government documents were quoted to substantiate their points that the pricing issue was not covered by the Officials Secrets Act, this was disclosed before.

    The Supreme Court bench has sufficient information with them mentioned in the petitions challenging the Rafale deal, wherein the government documents were quoted to substantiate their points that the pricing issue was not covered by the Officials Secrets Act, this was disclosed before

    For instance, on November 18, 2016, in response to a question asked in the Lok Sabha on the acquisition of fighter aircrafts, the MoS, Defence stated that “Inter-Governmental Agreement with the Government of French Republic has been signed on 23.09.2016 for purchase of 36 Rafale aircraft along with requisite equipments, services and weapons. Cost of each Rafale aircraft is approximately Rs. 670 crore and all the aircraft will be delivered by April 2022.”

    The “scam” was, however, revealed when the actual price of 36 aircraft was made public by a press release Dassault and Reliance and in the Financial Press Release statement of Dassault for 2016. Both the documents show the total price of the deal to be about Rs. 60,000 crores (about 8.139 Billion Euros) for 36 aircraft. It works out to Rs. 1,660 crores per plane. This is more than double the price of the aircraft under the earlier 126 MMRCA deal. And almost Rs. 1000 crores more than the price that was furnished by the Government itself to Parliament on November 18, 2016. This has resulted in a loss of over Rs 36,000 crores to the public exchequer at the cost of national security to benefit a private company.

    Both the documents show the total price of the deal to be about Rs. 60,000 crores (about 8.139 Billion Euros) for 36 aircrafts. It works out to Rs. 1,660 crores per plane. This is more than double the price of the aircraft under the earlier 126 MMRCA deal. And almost Rs. 1000 crores more than the price that was furnished by the Government itself to Parliament on November 18, 2016

    According to legal expert Ajitesh Kir, 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.

    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.

    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. But the provision was in force when the alleged offence took place i.e. during March and April 2015

    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.

    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. But 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.

    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 men's 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.

    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

    Kir observes 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 which focuses primarily on the decision-making process and the prescribed guidelines.

    The way the Supreme Court bench looks at the issues, will determine whether Prime Minister can come out of the deal unscathed.


     

    First published in The Leaflet.

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