The CAG has not yet concluded its audit of the Rafale contract

The Supreme Court should not just review but even recall its “erroneous” judgement, which relies on a “non-existent” Comptroller and Auditor General (CAG) report to uphold the government’s 36 Rafale jets’ deal, former Union Ministers Yashwant Sinha and Arun Shourie told the court on Wednesday.

The CAG has not yet concluded its audit of the Rafale contract.

The reliance of the judgement on a hypothetical CAG report was not merely a “clerical or arithmetical slip” in judgement, but a substantial error which deserved the recall of the December 14 judgement, the former ministers, joined by advocate Prashant Bhushan, argued.

The December 14 judgement said the CAG report was finalised and before the Public Accounts Committee (PAC). Further a “redacted” report would be placed in Parliament and in public domain.

“Information patently false”

This information was “patently false” and based on a confidential note given to the court by the government, the petitioners contended. Besides, they were not given an opportunity to rebut the note, they said.

They pooh-poohed the government’s application in the Supreme Court to “correct” the judgement. This was filed after a public furore broke out over the verdict. The government had claimed that the court “misinterpreted” its note, which was only citing the procedure to be followed after the CAG finalised its report.

If it was ‘procedure’, the note should have said the CAG report “will/would” be placed before the PAC and not ‘is placed before the PAC’, they pointed out.

They asked why the Bench, led by Chief Justice of India Ranjan Gogoi, chose not to call for the “primary documents” of the Rafale contract. The Bench had relied wholly on a secondary document like the sealed cover note, which contained “gross factual errors”.

The petitioners said the CAG was an independent constitutional body accountable only to Parliament. The government’s claim that the CAG’s final report on Rafale would be in a redacted form was simply untrue. In fact, the government cannot dictate to the CAG what should or should not be redacted.

“Historically, the CAG has always placed its final report as is before the PAC. Pricing which is the sine qua non of the audit has never been redacted by the CAG… Again, if the PAC chooses to examine the report, whether or not to redact the report is at the discretion of the PAC and not something that the government can claim as a matter of fact,” they contended.

The former ministers said they had not asked the court to embark on a judicial review of the Rafale contract. They had only asked it to examine their prayer for the registration of an FIR by the CBI.

The petitioners questioned the judgement’s dismissal of a lack of sovereign guarantee from the French government’s side as a “minor deviation”.

The petition said the judgement erred in holding that the ‘decision-making process’ was“broadly” in accordance with the Defence Procurement Procedures. No material was placed on record by the government to show that the Air Force sought 36 jets instead of the earlier Request for Proposal (RFP) for 126 aircraft. Besides, the procurement procedure was followed ex post facto, after the intent was made clear to purchase 36 jets on April 10, 2015.

Company 'confusion'

The petition said the judgement has grossly erred in confusing Reliance Industries of Mukesh Ambani with Reliance Infrastructure of Anil Ambani. Reliance Infrastructure is the parent company of Reliance Aerostructure Ltd, the “beneficiary of the offset contract”.

The petition pointed out that unlike what the judgement said, “no question was asked to or answered by the Air Force Officers as regards the decision-making process or pricing as regards 36 Rafale aircraft in the open court”.