Books | The Dirt Trail

Why the rise and fall of Anil Ambani’s RAL needs to be investigated

Ravi Nair and Paranjoy Guha Thakurta

On 6 September, the Supreme Court of India agreed to list a petition filed by advocate Manohar Lal Sharma against Modi and others, seeking a court order for an investigation into their involvement in pushing through the controversial Rafale aircraft purchase agreement and for the cancellation of the agreement altogether.

Sharma was known for his “PIL activism.” He had been in the news for the wrong reasons when he made misogynistic remarks in defence of the accused in the 2012 gang-rape and murder in New Delhi of a 22-year-old physiotherapy student (given the name of Nirbhaya by a prominent newspaper, The Times of India). It was alleged that Sharma had filed the petition in order to scuttle the possibility of an investigation to save face for the Modi government. A few months later, in December 2018, when Sharma filed another petition that the Supreme Court deemed “frivolous,” the apex court fined him Rs 50,000 and threatened to impose a five-year ban on him filing public interest litigation petitions. In recent years, Sharma has filed over 100 petitions in the Delhi High Court and the Supreme Court. Less than a year later, when Sharma rushed to file a petition against the government’s August 2019 decision to de-operationalise Article 370 of the Constitution, effectively revoking Jammu and Kashmir’s special status, Bhushan remarked on Twitter.

This fellow ML Sharma has been fined several times for filing bogus PILs. He challenged the Rafale contract & was happy with the dismissal of his petition. Didn’t file any review petition for reversing the judgement.

What follows is an extraordinary story of this petition relating to the Rafale deal that took place in the country’s top court.

Petitioner Sharma alleged that there was corruption in the Rafale contract and pleaded with the apex court that it order the deal to be scrapped. He called for a special investigation team (SIT) to be constituted that would probe the way in which the new deal had been structured and the procedures followed that would take place under the apex court’s supervision. When the petition came up for hearing before the Supreme Court on 17 September 2018, Sharma requested time till 10 October to file additional documents. The case was adjourned.

On 5 October, Bhushan, Sinha and Shourie came together once again to register a complaint with the Central Bureau of Investigation (CBI), urging India’s premier investigative agency to register first information reports (FIRs) under the Prevention of Corruption Act, 1988, against Prime Minister Modi and the former Defence Minister Manohar Parrikar. This was for various alleged procedural violations in their decision to cancel the RFP for 126 MMRCA and order the purchase of 36 Rafale aircraft form France in a government-to-government deal.

The alleged illegalities in the deal included the Prime Minister’s “unilateral” decision to cancel to older deal “keeping all other duty-bound public servants in the dark,” compelling Dassault Aviation to take on a company in the ADAG as its Indian offset partner and revising upwards the “benchmark price” that had been set by the expert in the Indian Negotiating Team after thorough technical evaluations. These actions constituted “blatant abuse of public office to disproportionately benefit a particular private entity,” the petitioner alleged.

Reliance Aerostructure Limited (RAL), the complainants argued, was not eligible to partner the Rafale aircraft’s French manufacture because it was “not ‘engaged in the manufacture’ of any defence equipment” and “was in violation of its industrial licence.” The Anil Ambani-led group’s company had made “negligible capital investments in his many sham defence companies” and had been “squatting” on subsidized land and several manufacturing licences that were granted to the company after it was chosen as the offset partner of Dassault Aviation, they further alleged.

Moreover, RAL’s stated decision to manufacture components of civilian business jets was in violation of the objective of including the offset investment clause in the defence procurement deal. Explaining in considerable detail the alleged irregularities in the deal, the complainants stated:

The facts mentioned above clearly suggest:

  • That Prime Minister, Mr Modi, asked Dassault to give the major offset contracts in this deal to Anil Ambani’s defence company as a condition for getting the contract; and
  • That the offset contracts worth tens of thousands of crores which have been awarded to Reliance Aerostructure Limited are not and cannot be considered to be legal remuneration for services actually rendered or services which could credibly be rendered by Reliance Aerostructure Limited.

Therefore, these offset contracts and the payments made/to be made for them are at least in large part in the nature of undue advantage/illegal gratification/commissions to be paid to… Reliance Aerostructure Limited under this deal. It is clear therefore that Mr. Modi has used his position as the Prime Minister heading the government to give an undue advantage to Anil Ambani’s Reliance Aerostructure Limited company as a consideration for the discharge of his function as a public servant to award the contract of purchasing 36 Rafale jets from Dassault in a “fly-away” condition.

The complainants claimed that these decisions by Prime Minister Modi were in violation of several provisions (including Section 7 and Section 13) of the Prevention of Corruption Act and amounted to “criminal misconduct.” The penalty for such offences ranged from a minimum prison term of three years extendable up to seven years, along with a fine. “In this offence, the other members of the Contract Negotiation Committee as well as the Defence Minister would be complicit and would be abettors,” they argued, adding that under Clause 8.6 of the DPP’s offset guidelines, Parrikar would have approved the offset contract and, therefore, was also liable to be found guilty of committing the offences.

Ravi Nair with Paranjoy Guha Thakurta
Published by Paranjoy Guha Thakurta, Pg 507, Rs 795


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