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IN THE SUPREME COURT OF INDIA

CIVIL/CRIMINAL ORIGINAL JURISDICTION

WRIT PETITION [CRIMINAL] NO.225 OF 2018

MANOHAR LAL SHARMA …. PETITIONER(S)

VERSUS

NARENDRA DAMODARDAS MODI  & ORS. … RESPONDENTS(S)

WITH

W.P.(C) NO.1205/2018

W.P. (CRL) NO.297/2018

W.P. (CRL) NO.298/2018

J U D G M E N T

RANJAN GOGOI, CJI

1. The issues arising in this group of writ petitions, filed

as Public Interest Litigations, relate to procurement of 36 Rafale

Fighter Jets for the Indian Airforce.   The procurement in

question, which has been sought to be challenged, has its origins

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in the post­Kargil experience that saw a renewed attempt to

advance the strategic needs of the armed forces of the country.   

2. As far back as in the month of June of the year 2001,

an in­principle approval  was granted for procurement of 126

fighter­jets to augment the strength of the Indian Airforce.

Simultaneously, a more transparent 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.  On 29th June 2007 the Defence Acquisition Council

(“DAC”) granted the “Acceptance of Necessity” for the

procurement of  126  Medium Multi  Role  Combat  Aircrafts (for

short “MMRCA”)   including 18 direct fly­away aircrafts

(equivalent to a single squadron) to be procured from the Original

Equipment Manufacturer (“OEM”) with the remaining 108

aircrafts to be manufactured by Hindustan Aeronautics Limited

(for short “HAL”) under licence, to be delivered over a period of 11

years from the date of signing.  The bidding process commenced

in August 2007.   Six (06) vendors submitted proposals in April,

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2008.   The proposals were followed by technical and field

evaluations; a Staff Evaluation Report and a Technical Oversight

Committee Report.   All these were completed in the year 2011.

The commercial bids were opened in November, 2011 and M/s

Dassault Aviation (hereinafter referred to as “Dassault”) 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.  

3. According to the official respondents negotiation

continued.   A process of withdrawal of the Request for Proposal

in relation to the 126 MMRCA was initiated in March 2015.  On

10th April, 2015 an Indo­French joint statement, for acquisition of

36 Rafale Jets in fly­away condition through an Inter­

Governmental Agreement (hereinafter referred to as “IGA”), was

issued and the same  was  duly approved  by the  DAC.   The

Request for Proposal for the 126 MMRCA was finally withdrawn

in June 2015.  Negotiations were carried out and the process was

completed after Inter­Ministerial Consultations with the approval

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of the  Cabinet  Committee  on Security (for short “CCS”).  The

contract along with Aircraft Package Supply Protocol;  Weapons

Package Supply Protocol; Technical Arrangements and Offset

contracts was signed in respect of 36 Rafale Jets on 23rd

September, 2016.  The aircrafts were scheduled to be delivered in

phased manner commencing from October 2019.

4. Things remained quiet until 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.   

The first writ petition i.e. Writ Petition (Criminal) No.225 of

2018 has been filed by one Shri Manohar Lal Sharma, a

practicing lawyer of this Court.   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

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Governmental Agreement of 2016 for purchase of 36 Rafale Jets

has also been prayed for.  

Writ Petition (Civil) No.1205 of 2018 has been filed by

one Shri Vineet Dhanda claiming to be a public spirited Indian.

The petitioner states that he was inspired to file the writ petition

being  agitated over the  matter  on  the  basis  of the  newspaper

articles/reports.

The third writ petition bearing Writ Petition (Criminal)

No.297 of 2018 has been filed by one Shri Sanjay Singh, a

Member of Parliament alleging illegality and non­transparency in

the procurement process.   The said writ petition seeks

investigation into the reasons for “cancellation of earlier deal” and

seeks a scrutiny of the Court into the alteration of pricing and,

above all, how a ‘novice’ company i.e. Reliance Defence came to

replace the  HAL as the  Offset  partner.  Cancellation of Inter­

Governmental Agreement and registration of an FIR  has also

been prayed for.   

The fourth and the last writ petition bearing  Writ

Petition (Criminal) No.298 of 2018 has been filed by Shri

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Yashwant Sinha, Shri Arun Shourie and Shri Prashant Bhushan

claiming to be public spirited Indians. They are aggrieved by non­

registration of FIR by the CBI pursuant to a complaint made by

them on 4th  October,  2018 which complaint,  according to the

petitioners, disclose a prima facie evidence of commission of a

cognizable offence under the provisions of the Prevention of

Corruption Act, 1988. The prayer, inter alia, made is for direction

for registration of an FIR and investigation of the same and

submitting periodic status reports to the Court.  

5. Adequate Military strength and capability to

discourage and withstand external aggression and to protect the

sovereignty and  integrity  of India,  undoubtedly, is  a matter  of

utmost  concern  for the  Nation.  The empowerment  of  defence

forces with adequate technology and material support is,

therefore, a matter of vital importance.

6. Keeping in view the above, it would be appropriate, at

the outset, to set out the parameters of judicial scrutiny of

governmental decisions relating to defence procurement and to

indicate whether such parameters are  more constricted than

what the jurisprudence of judicial scrutiny of award of tenders

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and contracts, that has emerged till date, would legitimately

permit.

7. Parameters of judicial review of administrative

decisions  with regard to award of tenders and contracts  has

really developed from the increased participation of the State in

commercial and economic activity.   In  Jagdish Mandal     vs.

State of Orissa and Ors.   1    this Court, conscious of the

limitations in commercial transactions, confined its scrutiny to

the decision making process and on the parameters of

unreasonableness and mala fides.  In fact, the Court held that it

was not to exercise the power of judicial review even if a

procedural  error is  committed to  the prejudice of the tenderer

since private interests cannot be protected while exercising such

judicial review.   The award of contract, being essentially a

commercial transaction,  has to  be  determined on the  basis  of

considerations that  are relevant to such commercial  decisions,

and this implies that terms subject to which tenders are invited

are not open to judicial scrutiny unless it is found that the same

have  been tailor­made to  benefit any  particular tenderer  or  a

1  (2007) 14 SCC 517

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class of tenderers. [See Maa Binda Express Carrier & Anr. Vs.

North­East Frontier Railway & Ors.   2]

8. Various Judicial pronouncements commencing from

Tata Cellular vs. Union of India   3, all emphasise the aspect that

scrutiny should be limited to the Wednesbury Principle of

Reasonableness and absence of mala fides or favouritism.  

9. We also cannot lose sight of the tender in issue.   The

tender is  not for construction of roads, bridges, etc.   It is a

defence tender for procurement of aircrafts.  The parameter of

scrutiny would give far more leeway to the Government, keeping

in mind the nature of the procurement itself.   This aspect was

even emphasized in Siemens Public Communication Networks

Pvt. Ltd. & Anr. Vs. Union of India & Ors.   4.  The triple ground

on which such judicial scrutiny is permissible has been

consistently held to be “illegality”, “irrationality” and “procedural

impropriety”.

2 (2014) 3 SCC 760 3 (1994) 6 SCC 651 4 (2008) 16 SCC 215

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10. In Reliance Airport Developers (P) Ltd. vs. Airports

Authority of India & Ors.   5 the policy of privatization of strategic

national assets qua two airports came under scrutiny.   A

reference  was  made in the said case to the commentary by

Grahame Aldous and John Alder in their book ‘Applications for

Judicial Review, Law and Practice’:

“There is a general presumption against ousting the jurisdiction of the courts, so that statutory provisions which purport to exclude judicial review are construed restrictively.  There are, however, certain areas of governmental activity, national security being  the paradigm, which the courts  regard themselves as incompetent to investigate, beyond an  initial  decision as to  whether the Government's claim is bona fide. In this kind of non­justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the royal prerogative are inherently unreviewable but since the  speeches  of the  House of  Lords in Council of Civil Service Unions Vs. Minister for the Civil Service  [1985 AC 374: (1984) 3 WLR 1174 (HL): (1984) 3 All ER 935] this is doubtful.  Lords Diplock,  Scaman and Roskili (sic.)6  appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited  by the subject­matter of a  particular power, in that case national security.  Many prerogative powers are in fact concerned with sensitive, non­justiciable areas, for example,

5 (2006) 10 SCC 1 6 To be read as ‘Roskill’

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foreign affairs, but some are reviewable in principle, including where national security is not involved. Another non­justiciable power is the Attorney General's prerogative to decide whether to institute legal proceedings on behalf of the public interest."

[emphasis supplied]

11. 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.   

12. Adopting such an approach, on 10th  October, 2018

when the first two writ petitions were initially listed before the

Court, the Court had specifically observed in its order that it is

proceeding in the matter by requiring the Government of India to

apprise the Court of the details of the steps taken in the decision­

making process notwithstanding the fact that the averments in

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the writ petitions were inadequate and deficient.  The Court had

also indicated that it was so proceeding in the matter in order to

satisfy itself of the correctness of the decision­making process.  It

was also made clear that the issue of pricing or matters relating

to technical suitability of the equipment would not be gone into

by the  Court.   The requisite information  was required to be

placed before the Court  by  the Government of India  in sealed

cover.  Before the next  date of  hearing  fixed  i.e.  31st  October,

2018, the other two writ petitions came to be filed.  

13. On 31st  October, 2018, the  Court in its order had

recorded that 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 decision­making process and the price/cost of

the equipment at which it was proposed to be acquired.   

14. Pursuant to the order dated 10th October 2018, a note

in sealed cover delineating the steps in the decision­making

process  was submitted to the  Court and  by order dated  31st

October 2018 this Court had directed that such of the

information  which  has  been  laid  before the  Court,  which  can

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legitimately  be  brought into the  public  domain,  be  also  made

available to the petitioners or their counsels.  Details with regard

to the induction of the Indian Offset Partner (IOP), if  any, was

also required to be disclosed.   The Court also directed that the

details  with regard to  pricing; the advantages thereof, if any,

should also be submitted to the Court in a sealed cover.  

15. It is in the backdrop of the above facts and the

somewhat constricted power of judicial review that, we have held,

would be available in the present matter that we now proceed to

scrutinise the controversy raised in the writ petitions which raise

three  broad  areas  of concern,  namely, (i) the  decision­making

process; (ii) difference in pricing; and (iii) the choice of IOP.

Decision Making Process  

16. The details of the steps in the decision­making process

leading to the award of the 36 Rafale fighter aircrafts’ order have

been set out in response to the order dated 10th October, 2018.

The Government states that the DPP 2002 has been succeeded

by periodical reviews in 2005, 2006, 2008, 2011, 2013 and 2016.

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The preamble to DPP has been referred to capture its essence,

which emphasises that –

“Defence acquisition is  not a standard open market  commercial form of  procurement  and has certain unique features such as supplier constraints, technological complexity, foreign suppliers, high cost, foreign exchange implications and geo­political ramifications. As a result, decision making pertaining to defence procurement remains unique and complex.”

It also states that –  

“Defence procurement  involves  long gestation periods and delay in procurement will impact the preparedness of our forces.   The needs of the armed forces being a non­negotiable and an  uncompromising aspect, flexibility in the procurement process is required,  which has also been provisioned for.”

It is  DPP  2013  which is stated to  have  been followed in the

procurement in question.

It is no doubt true that paragraph 77 of the DPP 2013

reads as follows:

“77. This procedure would be in supersession of  Defence  Procurement  Procedure  2011 and will come into effect from 01 June 2013.  There are, however, cases which would be under various stages of processing in accordance with provision of earlier versions of DPP at the

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time of commencement of DPP­2013.   The processing of these cases done so far under the earlier  procedure will  be deemed to be valid. Only those cases in which RFP is issued after 01 June, 2013, will be processed as per DPP­ 2013.”

In other words when it is stated that only those cases in which

RFP is issued after 1st  June 2013 will be processed as per DPP

2013, in this case where the RFP was issued much prior to 1st

April 2013 and it  was  withdrawn, as already  noted, in June

2015, a question may arise as to how it could be claimed that

DPP 2013 was followed.   We, however, also notice clause 75 of

DPP 2013 which reads as follows:

“75. Any deviation from the prescribed procedure will be put up to DAC through DPB for approval.”

17. Also, we notice that the official respondents have

sought support from paragraph 71 of the DPP 2013.   Para 71 of

DPP 2013, in respect of the IGA has  been referred to,  which

postulates possibilities of procurement from friendly foreign

countries, necessitated due to geo­strategic advantages that are

likely to accrue to the country.  Such procurement would not

classically follow the Standard Procurement Procedure or the

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Standard Contract Document, but would be based on mutually

agreed provisions by the  Governments of both the countries

based on an IGA, after clearance from the Competent Financial

Authority (hereinafter referred to as “CFA”).   Of the total

procurement of about Rs.7.45 lakh crores since 2002 under DPP,

different kinds of IGAs, including Foreign  Military Sales and

Standard Clauses of Contract account for nearly 40%.  With the

object of promoting indigenization, a robust offset clause is said

to have been  included since 2005.   As per the Defence Offset

Guidelines of 2013, the vendor/Original Equipment

Manufacturer (hereinafter referred to as “OEM”) is free to select

its IOPs for implementing the offset obligation.

18. As far as the endeavour to procure 126 fighter aircrafts

is concerned,  it has been stated that the contract negotiations

could  not be concluded, inter alia, on account of unresolved

issues between the OEM and HAL.   These have been set out as

under:

“i) Man­Hours that would be required to produce the aircraft in India: HAL required 2.7 times higher Man­Hours compared to the French side for the manufacture of Rafale aircraft in India.

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ii) Dassault Aviation as the seller was required to undertake necessary contractual obligation  for 126 aircraft (18 direct  fly­away and 108 aircraft manufactured in India) as per RFP requirements.   Issues related to contractual obligation and responsibility for 108 aircraft manufactured in India could not be resolved.”

19. The aforesaid issues are stated to have been

unresolved for more than three years.  Such delay is said to have

impacted the cost of acquisition, as the offer was with ‘in­built

escalation’ and  was influenced by Euro­Rupee exchange rate

variations.   The stalemate resulted in the process of RFP

withdrawal being initiated in March 2015.   In this interregnum

period, adversaries of the country, qua defence issues, inducted

modern aircrafts and upgraded their older versions.   This

included induction of even 5th  Generation Stealth Fighter

Aircrafts of almost 20 squadrons, effectively reducing the combat

potential of our defence forces.  In such a situation, government­

to­government negotiations resulted in conclusion of the IGA for

the supply of 36 Rafale Aircrafts, as part of a separate process.

The requisite steps are stated to have been followed, as per DPP

2013.   An INT7  was constituted to negotiate the terms and

7 Indian Negotiating Team

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conditions,  which commenced  in May 2015 and continued  till

April 2016.   In this period of time, a total of 74 meetings were

held, including  48  internal INT  meetings  and 26  external INT

meetings  with the  French side.   It is the case of the official

respondents that the  INT completed its negotiations and arrived

at better terms relating to price,  delivery and maintenance, as

compared  to the  MMRCA offer  of  Dassault.  This  was  further

processed for inter­ministerial consultations and the approval of

the CCS was also obtained,  finally,  resulting  in signing of the

agreement.  This was in conformity with the process, as per para

72 of DPP 2013.

20. The petitioners, on the other hand, seek to question

the very fulfilment of the prerequisites for entering into an IGA.

The Government of France, giving only a ‘Letter of Comfort’ and

not a ‘Sovereign Guarantee’ has been questioned.  

21. It is  a say of the petitioners  that  para 71 envisages

three eventualities, where the question of entering into an

IGA would arise, which have not arisen in the present case:

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(a) Proven technology and capabilities belonging to a

friendly foreign country is identified by our Armed Forces while

participating in joint international exercises;

(b) Large  value  weapon system/platform  in  service in  a

friendly foreign country is available for transfer or sale normally

at a much lesser cost; or

(c) Requirement of procuring a specific state­of­the­art

equipment/platform where the Government of the OEM’s country

might have imposed restriction on its sale and thus the

equipment cannot  be evaluated on ‘No  Cost  No  Commitment’

basis.

22. We have studied the material carefully.   We have also

had the benefit of interacting with senior Air Force Officers who

answered Court queries in respect of different aspects, including

that of the acquisition process and pricing. We are satisfied that

there is  no  occasion to really  doubt the  process, and  even if

minor deviations have occurred, that would not result in either

setting aside the contract or requiring a detailed scrutiny by the

Court.  We have been  informed that joint  exercises have  taken

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place, and that there is a financial advantage to our nation.   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

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correct for the Court to sit as an appellate authority to scrutinize

each aspect of the process of acquisition.

 23. We may also note that the process was concluded for

36 Rafale fighter jet aircrafts on 23rd September, 2016.   Nothing

was called into question, then.  It is only taking advantage of the

statement by the ex­President of France, Francois Hollande that

these set of  petitions have been filed, not only qua the aspect

which formed the statement, that is, the issue of IOPs but also

with respect to the entire decision­making process and pricing.

We do not consider it necessary to dwell further into this issue or

to seek clause­by­clause compliances.  

Pricing

24. The challenge to the  pricing  of the  aircrafts,  by  the

petitioners, is sought to be made on the ground that there are

huge escalations in costs, as per the material in public domain,

as found in magazines and newspapers. We did initially express

our disinclination to even go into the issue of pricing.  However,

by a subsequent order, to satisfy the conscience of the Court, it

was directed that details regarding the costs of the aircrafts

should also be placed in sealed covers before the Court.

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25. The material placed before us shows that the

Government  has  not disclosed  pricing details, other than the

basic price of the aircraft, even to the Parliament, on the ground

that sensitivity of pricing details could affect national security,

apart from breaching the agreement between the two countries.

The pricing details have, however, been shared with the

Comptroller and Auditor General (hereinafter referred to as

“CAG”),  and the report  of the CAG has been examined by the

Public Accounts Committee (hereafter referred to as “PAC”).  Only

a redacted portion of the report was placed before the Parliament,

and is in public domain.    The Chief of the Air Staff is stated to

have communicated his reservation regarding the disclosure of

the pricing details, including regarding the weaponry which could

adversely affect national security.   The pricing details are stated

to be covered by Article 10 of the IGA between the Government of

India and the  Government of France, on purchase of Rafale

Aircrafts, which provides that protection of classified information

and material exchanged under the IGA would be governed by the

provisions of the  Security  Agreement  signed between both  the

Governments on 25th January, 2008.  Despite this reluctance, the

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material has still been  placed before the  Court to satisfy its

conscience.  

26. 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.  

 Offsets

27. The issue of IOP is what has triggered this litigation.

The offset contract is stated to have been governed by the

Defence Offset Guidelines of DPP 2013.  Two of the said contracts

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were signed with Dassault and  M/s  MBDA  Missile Systems

Limited on 23rd September, 2016, the same day on which the IGA

was signed between the Government of India and the

Government of France.  These are the French industrial suppliers

of the Aircraft package and Weapon Package respectively.  There

are stated to be no offset obligations in the first three years, but

the offset obligations are to commence from October 2019

onwards.  

28. The complaint of the petitioners is that the offset

guidelines contemplate that the vendor will disclose details about

the Indian Offset partner however, in order to help the business

group  in  India  in question,  an amendment was carried out  in

paragraph 8 of the Offset Guidelines that too with retrospective

effect.  By virtue  of the  said  amendment it is  contended  that

cloak of secrecy is cast about the Offset partner and the vendor is

enabled to give the details at a much later point of time.   It is

contended, however, that other provisions of the Offset

Guidelines remain unamended, and, therefore, Government

cannot pretend ignorance about the Indian Offset partner as has

been done in the affidavit filed.   It is complained that favouring

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the Indian business group has resulted in offence being

committed under the Prevention of Corruption Act.   

29. As per clause 8 of DPP 2013, dealing with the

processing of offset proposals, it has been stated in clause 8.2 as

under:

“8. Processing of Offset Proposals

8.2 The  TOEC8  will scrutinize the technical offset proposals (excluding proposals for Technology Acquisition by DRDO as per para 8.3) to ensure conformity with the offset guidelines.   For this purpose, the vendor may be advised to undertake changes to bring his offset  proposals in conformity  with  the  offset guidelines.   The TOEC will be expected to submit its report within 4­8 weeks of its constitution.”

30. It has been categorically stated that the vendor/OEM

is yet to submit a  formal  proposal, in  the prescribed manner,

indicating the details of IOPs and products for offset discharge.  A

press release in the form of a ‘Clarification on  Offset Policy’,

posted on 22nd September, 2018 has also been placed before us.

Inter alia, it states that the Government reiterates that it has no

role to play in the selection of the IOP.  As per the Defence Offset

8 Technical Offset Evaluation Committee

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Guidelines, the OEM is free to select any Indian company as its

IOP.   A joint venture is stated to have come into being between

Reliance Defence and Dassault in February 2017, which is stated

to be a ‘purely commercial arrangement’ between the two private

companies.  Media reports of February 2012 are stated to suggest

that  Dassault,  within two  weeks  of  being  declared the lowest

bidder for procurement of 126 aircrafts by the previous

Government, had entered into a pact for partnership with

Reliance Industries (Another business group) in the Defence

sector.   Dassault has also issued a press release stating that it

has signed partnership agreements with several companies and

is negotiating with over hundred other companies.   As per the

guidelines, the vendor is to provide details of the IOPs, either at

the time of seeking offset credit or one year prior to discharge of

offset obligation, which would be due from 2020 onwards.   The

aforesaid press release is in conformity with the clause dealing

with IOPs which reads as under:

“4. Indian Offset Partner

4.3  The  OEM/vendor/Tier­I sub­vendor  will be free to select the Indian offset partner for implementing the offset obligation provided the IOP has not been barred from doing business by the Ministry of Defence.”

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31. Despite the aforesaid illustration, the petitioners kept

on emphasising that the French Government has no say in the

matter, as per media reports. It is also stated that there was no

reason for  Dassault to  have engaged the services of  Reliance

Aerostructure Ltd., through a joint venture, when the company

itself had come into being only on 24th  April, 2015.   The

allegation, thus, is that the Indian Government gave a benefit to

Reliance Aerostructure Ltd., by compelling Dassault to enter into

a contract  with them,  and that too  at the cost of the  public

enterprise, HAL.

32.  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.  As to what transpired between the

two corporates would be a matter best left to them, being matters

of their commercial interests, as perceived by them.   There has

been a categorical denial, from every side, of the interview given

by the former French President seeking to suggest that it is the

Indian  Government  which  had  given  no option to the  French

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Government in the matter.   On the basis of materials available

before us, this appears contrary to the clause in  DPP 2013

dealing  with IOPs which has  been extracted  above.  Thus, 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 IOP. Such  matter is seemingly  left to the

commercial decision of Dassault. That is the reason why it has

been stated that the role of the Indian Government would start

only when the vendor/OEM submits a  formal proposal, in the

prescribed manner,  indicating details of  IOPs and products for

offset discharge.   As far as the role of HAL, insofar as the

procurement of 36 aircrafts is concerned, there is no specific role

envisaged. In fact, the suggestion of the Government seems to be

that there  were  some contractual  problems and Dassault  was

circumspect about HAL carrying out the contractual obligation,

which is also stated to be responsible for the non­conclusion of

the earlier contract.   

33. Once  again, it is  neither  appropriate  nor  within the

experience of this Court to step into this arena of what is

technically feasible or not.  The point  remains  that  DPP 2013

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envisages that the vendor/OEM will choose its own IOPs.  In this

process, the role of the Government is not envisaged and, thus,

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.

Conclusion:

34. In view of our findings on all the three aspects, and

having  heard the  matter in  detail,  we find  no reason for  any

intervention by this Court on the sensitive issue of purchase of

36 defence aircrafts  by the  Indian Government.  Perception of

individuals cannot be the basis of a fishing and roving enquiry by

this Court, especially in such matters.  We, thus, dismiss all the

writ petitions, leaving it to the parties to bear their own costs.

We, however, make it clear that our views as above are primarily

from the standpoint of the exercise of the jurisdiction  under

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Article 32 of the Constitution of India which has been invoked in

the present group of cases.  

………….....................,,CJI [RANJAN GOGOI]

………….....................,,J. [SANJAY KISHAN KAUL]

………….....................,,J. [K.M. JOSEPH]

NEW DELHI DECEMBER 14, 2018