Case Summary: Manohar Lal Sharma v. Narendra Damodardas Modi

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This post has been written by Mamta Kumari, a law student from Banasthali Vidyapith.

TITLE OF THE CASE– Manohar Lal Sharma v. Narendra Damodardas Modi

DATE OF DECISION– 14 December, 2018

CASE NUMBER– WP(Cri.) 225/2018; RP(Cri) 46/2019

COURT- Supreme Court of India

JUDGES– Ranjan Gogoi, K.M. Joseph, Sanjay Kishan Kaul,

PARTIES- Petitioner: Manohar Lal Sharma; Vineet Dhanda, Yashwant Sinha, Sanjay Singh

Respondent: Narendra Damodardas Modi (Prime Minister), Union of India, Central Bureau of Investigation.

LAWYERSPetitioner: Prashant Bhushan, Manohar Lal, Vineet Dhanda

Respondent: Attorney General KK Venugopal, ASG Tushar Mehta

FACTUAL BACKGROUND

  • This case is popularly known as 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 Congress led UPA Government, requested to purchase 126 fighter Aircrafts.
  • Before purchasing and investing a good amount firstly it has to be ascertained that which Aircraft is best to buy for India so the whole process of identifying the best Aircraft took a long time and in 2012 Government agreed with Dassault Rafale Aircraft, a private French Company with the lowest bid.
  • It was agreed that 18 Aircraft would be purchased by the Dassault in a “Fly-away” condition and 108 Aircrafts would be manufactured by Hindustan Aeronautic Limited (HAL) in India. Even after the agreement, it did not conclude for so many years.
  • After the changing of Government in 2015 and with the arrival of new Prime Minister, Narendra Modi, a new inter-governmental deal is sought between Indian Prime Minister and French President.
  • The new deals relate to the purchase of only 36 Rafale Fighter Jets in a ‘Fly-away’ conditions from France and the old deal of 126 Aircrafts was withdrawn by the Ministry of Defence of India. The new deal was agreed with the amount of Rs. 60,000 Crore.
  • Further a private company was given an authority to do joint venture with Dassault to become the Indian Offset Partner as Anil Ambani’s Reliance group and Dassault then 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 Supreme Court of India on the ground of irregularity in the Rafale Fighter Aircrafts 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 old and new deal of Aircraft.

ISSUES

  • Whether the procedure followed by the Central Government in purchasing 36 Fighter Aircraft in place of 126 Aircraft leads to procedural irregularity?
  • Whether new Rafale Fighter Aircraft deal suffers from any pricing irregularity as the new price of per unit is more than that decided by the UPA Government earlier?
  • Whether the Fighter Jet deal is an inter- governmental deal between the government of Indian and France?
  • Whether the Central Government proposes the Reliance Defence Ltd as a Dassault Aviation’s Indian Offset Partner without the Defence Ministry of India as required under clause 8.6 of Defence Offset Guidelines?

ARGUMENTS OF PARTIES

Contention of Petitioner-

The petitioner contended that there is a pricing irregularity in the contract as the price which was decided earlier and in the new deal is not same and the deal is almost corrupted. Further it says that the decision-making process was also not proper. The selection of Anil Ambani’s Reliance as the Indian Offset Partner was also questioned.

Contention of Respondent-

The respondent contended that the Indian Government agreed on a better term and negotiated well in respect of price of aircraft and delivery of it and claims that there is a commercial advantage in the purchase of 36 Rafale fighter Aircraft. Further contended that the agreement is in conformity with the correct procedure to be followed for it.

JUDGMENT

The Court passed judgment and held that the Rafale Fighter Jet deal do not suffer from any irregularity and there is nothing found against the purchase of 36 Fighter jets by the Indian Government. The prayer sought for ordering the investigation by Central Bureau of Investigation to file FIR and Investigation regarding deal was also dismissed.

The court further held that the Court cannot interfere so much in the matter of Defence contract as it has a limited scope of judicial scrutiny in it. The court said that in the interest of sovereignty and integrity of India, the scope of judicial review is restricted specially in the defence procurement matters and the purchase of Rafale fighter aircraft is also the matter of national security contracts.

Court held that the old contract was between UPA Government and Dassault Aircraft company which was for the purchase of 126 Aircrafts and was not concluded due to unsolved terms between Hindustan Aeronautic Limited  and Dassault Aircraft due to which it was withdrawn in 2015. This was the reason that the new Government undertook new -intergovernmental agreement for the purchase of 36 Rafale Fighter Jets.

The contract between Indian Prime Minster, Narendra Modi and 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 valid commercial agreement.

REVIEW PETITION AGAINST JUDGMENT

Against the judgment of Supreme Court, three review petitions were filed which challenged the judgment. The petitioners prayed for recalling the judgment and claims that the judgment passed suffers from the error apparent to the record as the court did not considered critical facts submitted by the petitioner. Further the petitioner took a plea that the court had not dealt with the consideration of Prashant Bhushan’s main prayer during the previous proceedings.

Court’s view regarding review petition

While dealing with the review petition-

  • The Court held that there is no substantial error.
  • It has again emphasised that the court has limited scope of judicial review in the matter of defence contracts.
  • Court dismissed the plea raised about the consideration of Prashant Bhushan’s prayer.
  • The court said that, it had allowed all the counsels to give their elaborate submission.
  • The court also dismissed the claim of procedural irregularity as it do not find any investigation requirement in the decision-making process.

REFERENCE

https://indiankanoon.org/doc/95183857/

https://scroll.in/article/919828/what-the-supreme-court-said-about-rafale-and-why-it-is-a-huge-victory-for-indian-journalism

https://www.scobserver.in/court-case/rafale-fighter-jet-deal

Image from-  https://magoosh.com/hs/apush/2017/10-important-apush-court-cases/

 

 

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