HON’BLE THE CHIEF JUSTICE, HON’BLE MR. JUSTICE SANJAY KISHAN KAUL, HON’BLE MR. JUSTICE K.M. JOSEPH
Procurement of 36 Rafale Fighter Jets for the Indian Airforce. – case of commercial favouritism to any party by the Indian Government – 2001, an inprinciple approval was granted for procurement of 126 fighterjets -Defence Procurement Procedure (“DPP”) was formulated for the first time in the year 2002.- A robust ‘offset clause’ was included in the DPP in the year 2005 so as to promote Indigenisation and to that effect Services Qualitative Requirements (“SQRs”) were prepared in June 2006.-The bidding process commenced
in August 2007. Six (06) vendors submitted proposals in April,2008- The commercial bids were opened in November, 2011 and M/s Dassault Aviation was placed as the LI sometime in January 2012. – Negotiations commenced thereafter and continued but without any final result. In the meantime, there was a change of political dispensation at the centre sometime in the middle of the year 2014.- sometime in the month of September, 2018 when certain newspapers reported a statement claimed to have been made by the former President of France, Francois Hollande, to the effect that the French Government were
left with no choice in the matter of selection of Indian Offset Partners and the Reliance Group was the name suggested by the Government of India. This seems to have triggered of the writ
petitions under consideration.- What is sought for in the said writ petition is registration of an FIR under relevant provisions of the Indian Penal Code, 1860 and a Court Monitored
Investigation. The further relief of quashing the Inter Governmental Agreement of 2016 for purchase of 36 Rafale Jets has also been prayed for. –
Apex court held that It is our considered opinion/view that the extent of permissible judicial review in matters of contracts, procurement, etc. would vary with the subject matter of the contract and there cannot be any uniform standard or depth of judicial review which
could be understood as an across the board principle to apply to all cases of award of work or procurement of goods/material. The scrutiny of the challenges before us, therefore, will have to be made keeping in mind the confines of national security, the subject of the procurement being crucial to the nation’s sovereignty.–in none of the writ petitions the suitability of the fighter jets and its utility to the Indian Airforce had been called into question. Rather what was doubted by the petitioners is the bona fides of the decision making process and the price/cost of the equipment at which it was proposed to be acquired. –We have examined closely the price details and comparison of the prices of the basic aircraft along with escalation costs as under the original RFP as well as under the IGA. We have also gone through the explanatory note on the costing, item wise. Suffice it to say that as per the price details, the official respondents claim there is a commercial advantage in the purchase of 36 Rafale aircrafts. The official respondents have claimed that there are certain better terms in IGA qua the maintenance and weapon package. It is certainly not the job of this Court to carry out a comparison of the pricing details in matters like the present. We say no more as the material has to be kept in a confidential domain – Apex court held that It cannot be lost sight of, that these are contracts of defence procurement which should be subject to a different degree and depth of judicial review. Broadly, the processes have been followed. The need for the aircrafts is not in doubt. The quality of the aircraft is not in question. It is also a fact that the long negotiations for procurement of 126 MMRCAs have not produced any result, and merely conjecturing that the initial RFP could have resulted in a contract is of no use. The hard fact is that not only was the contract not coming forth but the negotiations had come practically to an end, resulting in a recall of the RFP. We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircrafts in place of 126. We cannot possibly compel the Government to go in for purchase of 126 aircraft.This is despite the fact that even before the withdrawal of RFP, an announcement came to be made in April 2015 about the decision to go in only for 36 aircrafts. Our country cannot afford to be unprepared/underprepared in a situation where our adversaries are stated to have acquired not only 4th Generation, but even 5th Generation Aircrafts, of which, we have none. It will not be correct for the Court to sit as an appellate authority to scrutinize each aspect of the process of acquisition.- mere press interviews or suggestions cannot form the basis for judicial review by this Court, especially when there is categorical denial of the statements made in the Press, by both the sides. – We do not find any substantial material on record to show that this is a case of commercial favouritism to any party by the Indian Government, as the option to choose the IOP does not rest with the Indian Government.