No commercial favouritism in Rafale deal: SC

The Supreme Court on Friday found no material to suggest that there was a case of “commercial favouritism to any party” in the Rafale deal saying the option to choose the Indian offset partner does not rest with the Indian government.

The court relied upon the defence procurement procedure, 2013, to conclude that it envisaged such a role to the original equipment manufacturer.

A bench of Chief Justice Ranjan Gogoi rejected a plea for probe into the matter made by a group of petitioners on the charge that the Union government favoured an Anil Ambani group of company by forcing the Dassault Aviation to select it as an offsent partner, amounting to an offence under the Prevention of Corruption Act.

The court also noted that there were some “unresolved issues” between Dassault and Hindustan Aeronautics Ltd which halted a previous bid made in 2012 to procure 126 aircraft and the stalemate resulted in its cancellation in 2015.

In this period, adversaries of the country inducted modern aircraft and upgraded their older versions with induction of even 5th generation stealth fighter aircraft of almost 20 squadrons, it said.

“It is no doubt true that the company, Reliance Aerostructure Ltd, has come into being in the recent past, but the press release suggests that there was possibly an arrangement between the parent Reliance company and Dassault starting from the year 2012,” the top court said.

"The commercial arrangement, in our view, itself does not assign any role to the Indian government, at this stage, with respect to the engagement of the Indian offset partner. Such matter is seemingly left to the commercial decision of Dassault,” the bench, also comprising Justices Sanjay Kishan Kaul and K M Joseph, added.

The court cited a joint venture between Reliance Defence and Dassault in February 2017, which is stated to be a ‘purely commercial arrangement’ between the two private companies.

The media reports of February 2012 are stated to suggest that Dassault, within two weeks of being declared the lowest bidder for procurement of 126 aircraft by the previous government, had entered into a pact for partnership with Reliance Industries (another business group) in the defence sector.

“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,” the court said.