On October 4, 2018, former BJP ministers Yashwant Sinha and Arun Shourie, and Supreme Court advocate Prashant Bhushan filed a complaint with the Central Bureau of Investigation, urging the agency to register an FIR against Prime Minister Narendra Modi and former defence minister Manohar Parrikar, allegedly for a range of offences under the Prevention of Corruption Act, committed in the course of the April 2015 decision to purchase 36 Rafale aircraft from Dassault Aviation.

The following is the full text of the complaint handed over to Alok Verma, director of the CBI, on Thursday.

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Subject: – Complaint under Section 7, Section 13(1)(d)(ii), & Section 13(1)(d)(iii) of unamended Prevention of Corruption Act, 1988, and Section 7 read with Explanation 2 of amended Prevention of Corruption Act, 1988, against Prime Minister, Mr. Modi, and the then Defence Minister, Mr. Manohar Parrikar. Complaint against other persons involved for abetment of said offences.

Sir,

Mr. Narendra Damodardas Modi is a public servant presently occupying the office of the Prime Minister of India. Mr. Anil Ambani is his long time friend and close associate who is the Chairman of Reliance ADA group of companies. Mr. Anil Ambani’s companies have been verging at the point of insolvency. Creditors of his group companies have initiated proceedings against his companies to recover their dues (Annexure 1A- 1D). Reliance ADA group of companies has for some time been in dire financial health. Reliance ADA has had to sell many of its precious assets to pay off its interest obligations and stave off insolvency proceedings (Annexure 2). In these circumstances, a conspiracy was hatched by the two of them, by way of which, Mr. Modi obtained an‘undue advantage’ from Dassault Aviation, for awarding a contract for 36 Rafale aircrafts in ‘fly-away’ condition, by abusing the authority of his office and doing his public duty dishonestly and improperly. The ‘undue advantage’ has been received by his close associate and friend Mr. Ambani. As a consideration for abusing his official authority and doing his public duty dishonestly, Mr. Modi compelled Dassault to choose Mr. Ambani as an offset partner, by way of which Mr. Ambani received, and is receiving, and will continue to receive, for the next 40 years, an ‘undue advantage’. That is to say that though the offence commenced on 10th of April, 2015, it is, as of date, a continuing offence.

Facts in Brief

Meeting of minds

On 3rd of March, 2015, Mr. Ambani admitted to a meeting between Mr. Modi and himself ( Annexure 3 ), in which Mr. Modi invoked him to enter the defence sector. Mr. Modi told Mr. Ambani that,

“Anil, do you know that even the tears we shed in this country are not our own? Every tear gas shell used by our security agencies is actually imported!”

Evidently, proximate to the date of the commission of the offence, there was a meeting of minds between Mr. Modi and Mr. Ambani. It is most unusual that the Prime Minister talked to Mr. Ambani about the sensitive defence sector given that Mr. Ambani at the time was being investigated by the CBI for corruption in the 2G scam wherein public servants were bribed. Mr. Ambani at the time had no interests in the defence sector and it wasn’t a legitimate conversation about any business that Mr. Ambani had any actual investment or interest in.

At the time Mr. Ambani’s companies were buried under a mountain of debt. On Mr. Modi’s suggestion, Mr. Ambani promptly forayed into a highly technical, sensitive, and government dependent sector such as defence, confident of Mr. Modi’s authority and influence to swing any deal in his favour. Thereafter, 37 days prior to the commission of the offence, Mr. Ambani acquired management control of PipavavDefence& Engineering on 04th of March, 2015 by purchasing 17.77% stake in the company. A controlling stake of 36% was only acquired one year later on 16th of January, 2016 ( Annexure 4A 4B ). engaged in the manufacture of products and services mentioned in “List of Products and Services Eligible for Discharge of Offset Obligations,” specified in Annexure VI to Appendix D of Offset Guidelines of Defence Procurement Procedures ( Evidently, on 10th of April, 2015, i.e. the date of the commission of the offence, Mr. Ambani did not ‘own’ any companyof products and services mentioned in “List of Products and Services Eligible for Discharge of Offset Obligations,” specified in Annexure VI to Appendix D of Offset Guidelines of Defence Procurement Procedures ( Annexure 5 ). PipavavDefence& Engineering was later renamed as Reliance Naval & Engineering. Reliance Naval & Engineering has been unable to fulfil the orders for Naval Offshore Patrol Vehicles ( Annexure 6 ) which are long overdue. The company is close to bankruptcy and insolvency proceedings have been initiated by its creditors against this company ( Annexure 7A-7B ).

Negotiations under original RFP were almost complete

RFP) in 2007 for 126 Medium Multi-Role Combat Aircrafts (MMRCA). The RFP made clear that the bids were to be inclusive of cost of initial purchase, transfer of technology, licensed production, etc. (Annexure 8). During this time period of March, 2015, negotiations for purchasing 126 aircrafts from Dassault Aviation were at an advanced stage. In accordance with requirements specified by the Indian Air Force, keeping in mind the sanctioned strength of 42 squadrons of IAF,as necessitated for protection of national security keeping in mind the threat of a ‘two front’ war, the earlier Government had issued a Request for Proposal () in 2007 for 126 Medium Multi-Role Combat Aircrafts (MMRCA). The RFP made clear that the bids were to be inclusive of The Indian Air Force announced in 2011 that Dassault’sRafaleand Eurofighter GmbH’s Typhoon fighters met the IAF’s requirements. In 2012, it was found that Dassault’s bid was the lowest and therefore negotiations began between Dassault and the Indian Government. Those negotiations were almost complete. On 13th of March, 2014, a Work Share Agreement was concluded between Dassault and H.A.L under which H.A.L. and Dassault were to execute 70% and 30% of the work respectively for aircrafts that were to be made in India ( Annexure 9 ).Ina press conference on 25th of March 2015, Mr. Eric Trappier, the C.E.O, of Dassault, in the presence of the Chief of Indian Air Force and Chairman of H.A.L stated ( Annexure 10 ) ,

“After an outstanding amount of work and some discussion, you can imagine my great satisfaction to hear, on one hand from the Indian Air Force chief of staff that he wants a combat proven aircraft which could be the Rafale…and on the other hand from HAL chairman that we are in agreement for the responsibilities sharing, considering as well our conformity with the RFP (Request for Proposal) in order to be in line with the rules of this competition. I strongly believe that contract finalisation and signature would come very soon.”

It is evident that just 15 days before the new deal was signed, Dassault was not only in final stages of negotiations with India for 126 aircrafts, but HAL, was to be Dassault’s partner in India for manufacturing and Make in India through transfer of technology was on the table. Clearly, the Indian Air Force Chief, Dassault’s C.E.O, and the H.A.L. chairman were unaware of the designs of Mr. Modi and Mr. Ambani.

Pursuant to the conspiracy, and with advance knowledge that could only have been provided by Mr. Modi, Mr Ambani incorporated a company called Reliance Defence Ltd. on 28th of March, 2015, just 12 days before 10th of April, 2015 ( Annexure 11 ). It is clear that the knowledge as regards what was to happen on 10th of April, 2015, was provided by Mr. Modi to Mr. Ambani.

Other duty-bound public servants kept in the dark

Even as late as 8th of April, 2015, India’s Foreign Secretary and thus the Foreign Ministry were unaware of the larger designs of Mr. Modi and Mr. Ambani. Addressing the press just two days before 10th of April, 2015, the then Foreign Secretary, S. Jaishankar said ( Annexure 12 ),

In terms of Rafale, my understanding is that there are discussions under way between the French company, our Ministry of Defence, the HAL which is involved in this. These are ongoing discussions. These are very technical, detailed discussions. We do not mix up leadership level visits with deep details of ongoing defence contracts. That is on a different track. A leadership visit usually looks at big picture issues even in the security field.

Six facts are evident from what the Foreign Secretary said just two days before the Prime Minister’s announcement: [i] Negotiations were still going on regarding the Rafale aircraft; [ii] Manifestly these were going on under the original RFP for 126 aircrafts; [iii] HAL was very much to be a part of the project as it was of the negotiations; [iv] The Prime Minister of India and the President of France were to focus on the “big picture issues even in the security field.”; [v] No new deal for Rafale aircrafts was on the agenda for the talks in Paris; [vi] Consequently, no preliminary ground work was done as regards any new deal.

It is significant that Mr. Modi chose to keep the IAF, HAL, the Foreign Ministry, and even the Defence Minister in the dark about his impending designs. The Foreign Minister was not present in France. The Defence Minister, unaware at the time of the new deal, was reportedly inaugurating a fish shop in Goa ( Annexure 13 ). The only two people aware of the impending conspiracy at the time were Mr. Modi and Mr. Ambani. Mr. Modi was not accompanied by either the Foreign Minister or the Defence Minister. But Mr. Ambani accompanied Mr. Modi to Paris. Evidently, on the date of the commission of the offence both the conspirators were present at the same location and had ensured that other public servants duty-bound to protect India’s public interest and within whose domain the subject matter of the deal squarely felt were absent.

Commission of the offence

On the 10th of April, 2015, Mr. Modi, in order to further the conspiracy hatched between himself and Mr. Ambani, abused his office by exercising his public duty improperly and dishonestly. Mr. Modi superseded all other institutions, by unilaterally determining that the well thought out deal for 126 aircrafts —which was as per the requirements and specifications of the IAF, which had followed all the mandatory procedures, under which National Security would have strengthened by ensuring that IAF has the required sanctioned strength of 42 squadrons, which would have ensured that IAF did not have to deal with piecemeal buying that results in a diversified fleet that is most undesirable, which would have ensured that our pilots do not have to fly what have been termed “flying coffins” because of difficulties in maintenance and support for such a diversified fleet, which would have ensured that India is not subject to pressure from foreign governments where the vendor’s manufacturing plant is located in times of strategic threats, which would have ensured India is finally self-reliant in the manufacture of advanced fighter aircrafts, which would have ensured sophisticated desperately needed transfer of technology for manufacture of advanced fighter aircrafts, which would have ensured a boon for India’s defence industry, which would have resulted in low ‘life cycle costs’, which would have ensured more capital is available for other defence purchases —was discarded. The original deal was unilaterally discarded by Mr. Modi as under that deal H.A.L would have been the production agent for Dassault in India and there was no scope for Mr. Ambani to get an undue advantage. It was solely in order to secure an undue advantage for Mr. Ambani, that public servant Mr. Modi abused his office and performed his public duty improperly and dishonestly by discarding, without authority, the old deal for 126 aircrafts with Make in India by H.A.L. under Transfer of Technology. Instead, to obtain an undue advantage, to be received by Mr. Ambani, Mr. Modi unilaterally and without authority, proposed a new deal for just 36 aircrafts, with no Make in India, with no transfer of technology, all in a ‘fly away’ condition to be manufactured in France, that would have allowed Mr. Ambani to gain an undue advantage by being Dassault’s key offset partner. Dassault was singularly induced by Mr. Modi to accept Mr. Ambani as an offset partner in exchange for giving Dassault the 36 aircraft deal. It is well known that at the time Dassault’s production line would have shut down, if there had been no contract from India. Fully aware of this fact, and exploiting it, Mr. Modi compelled Dassault, in order to obtain an undue advantage receivable by Mr. Ambani, to choose Mr. Ambani as its offset partner as a consideration for improperly and dishonestly discarding the old deal. By abusing his office and doing his duty improperly and dishonestly, without following mandatory due process, he offered a new deal for 36 aircrafts with the condition that Mr. Ambani would be chosen as its offset partner. It was improper, dishonest, malafide, and abuse of his office for Mr. Modi to offer any new deal without the mandatory prerequisites of: [1] IAF Services Head Quarters initiating the procurement process by preparing Services Qualitative Requirements (SQRs) ; [2] Categorisation Committee recommendingthe ‘mode of procurement’ i.e. whether to buy from global vendor directly, or to buy some in a ‘fly away’ condition and manufacture the rest in India; [3] Defence Acquisition Council (D.A.C.) giving the Acceptance of Necessity (A.O.N.) based on IAF’s SQR’s and Categorization Committee’s recommendations ; [4] Getting the prerequisite Cabinet Committee on Security clearance. The unilateral offering of this new deal was without any authority by Mr. Modi. Mr. Modi foreclosed the discretion of various institutions as regards specification, quantity, and categorization. Mr. Modi prevented these institutions from doing their public duty in offering a new deal without their prior recommendation and approval.

Mr. Modi forced Dassault Aviation to select Mr. Ambani as offset partner

Mr. Modi obtained an undue advantage by inducing Dassault Aviation to select Mr. Ambani’s as an offset partner. As regards the choice of the offset partner, the then French President, Mr. Hollande, himself has now admitted that, ( Annexure 14 ),

“We didn’t have any say in this matter,” Hollande told Mediapart. “It is the Indian government which had proposed this service group, and Dassault who negotiated with Ambani. We didn’t have the choice, we took the interlocutor who was given to us.”

It is crystal clear that this was Mr. Modi’s unilateral decision. It is crystal clear that Mr. Modi compelled Dassault to offer an undue advantage by way of offsets in exchange for ensuring that he killed the old deal and offered the new one to Dassault. Mr. Modi and Mr. Ambani had acted in a premeditated concert to keep everyone else in the dark and at the very last moment, Mr. Modi himself changed the deal and presented a ‘take it or leave it’ scenario to Dassault and the French. French government or Dassault did not have a “choice” in this matter. Nobody else had a say in this decision at the time. Mr. Hollande, has further corroborated that Anil Ambani was forced upon the French as (Annexure 15),

“part of the new formula of the Indian Government.”

Three days after the deal, then Defence Minister, Manohar Parrikar stated to Doordarshan (https://youtu.be/kbLJcQltaE0) on 13th of April, 2015, that,

“Modi-ji took the decision; I back it up.”

Elaborating to NDTV (https://youtu.be/2udl1EHdZ2s), he described the decision as,

“the outcome of discussions between the Prime Minister [of India] and the President of France.”

In less than a week of the announcement of the new deal, stories had emerged in the French media as regards Mr. Ambani’s involvement. On the 17th of April, 2015, the French Media reported ( Annexure 16 ) Mr. Modi’s particular interest in promoting Reliance. On a French strategic and defence website, in the context of the cancellation of the new deal being signed, it was reported that,

(The new deal), “At the political level, is for Narendra Modi, to demonstrate that India is a reliable partner and reaffirmhis authority …and at the same time, he (is)devoted to the rise to power of the private consortium Reliance Ambani family, one of his main financialsupport(ers), (whom) he would like to see play a greater role in the defence industry.”

This is remarkable given that the official agreement was only signed on 23rd of September, 2016, but as early as 17th of April, 2015, within a week of the joint statement, the French media was already aware that Mr. Modi was promoting Mr. Ambani for the Rafale deal. This substantiates that even before any further discussions for the main procurement were to be done, the name of the offset partner had been decided during Mr. Modi’s visit.

April of 2015 itself. This is astounding given that the final agreement for the main procurement contract was only signed on 23rd of September, 2016. It is even more astounding given that at that time R.A.L. did not have: any land or industrial license for the production of any defence equipment. Mr. Ambani in furtherance of the conspiracy moved fast thereafter to ensure that Dassault was induced to choose him as an offset partner. On 24th of April, 2015, he incorporated a new firm called Reliance Aerostructure Limited (R.A.L.) ( Annexure 17 ). As per Dassault Aviation’s official press release ( Annexure 18 ), the Joint Venture between Dassault and R.A.L.. was created inThis is astounding given that the final agreement for the main procurement contract was only signed on 23rd of September, 2016. It is even more astounding given that at that time R.A.L. did not have: any land or industrial license for the production of any defence equipment.

Mr. Modi abused his office to initiate a new deal without following mandatory process

The Acceptance of Necessity (A.O.N.) —which is to come after IAF gives its studied recommendations as regards quantities that are to be purchased and the categorisation committee recommends the mode of procurement— was ex post facto obtained by Mr. Modi by exerting his influence over other public servants in the Defence Acquisition Council (D.A.C.), only on 13th of May, 2015 ( Annexure 19 ). This turned the entire procurement process on its head. The D.A.C. is meant to give its approval to only those proposals and those specifications and requirements that are contained in the Services Qualitiative Requirements (SQRs) that must necessarily originate in the IAF Services Head Quarters. These SQRs determine the quantities that are to be purchased. The D.A.C.’s authority is only to approve the SQRs. Similarly, the D.A.C. can only give its approval to the mode of procurement, i.e. whether to Buy in ‘fly away’ condition from foreign vendor or to buy some in a ‘fly away’ condition and make the rest in India, on the basis of the recommendation of the Categorisation Committee. These provisions were so included precisely because India has been plagued with defence scandals in the past. Precisely to prevent politicians from excising arbitrary control over the procurement procedures it was stated that quantities and mode of procurement were to be decided by the Services and the Categorisation Committee respectively. The D.A.C. has no authority to give an approval in the form of A.O.N. to any proposal that did not follow these mandatory provisions. The D.A.C. has no authority toex post facto give an A.O.N. for a corrupt decision taken by the Prime Minister wherein to further a conspiracy he decided to reduce the quantities to be purchased disregarding the requirements of the IAF and decided to change the mode of procurement so that H.A.L. could be thrown out and he could seek an undue advantage for Mr. Ambani through the offset route. Mr. Modi abused his office to compel the D.A.C. to give an A.O.N. in an illegal and arbitrary manner.

Mr. Modi had no authority to discard the old deal

The original deal was officially killed on 24th of June, 2015, by retracting the Request for Proposal (RFP) that was issued in 2007 ( Annexure 20 ). No such provision for retraction of RFP existed in the Defence Procurement Procedure at the time. Again, this is so that no politician —once the entire process has been gone through as per the requirements of the Services, and the equipment has been extensively tested (over three years in this case by the IAF), and the bids have been properly scrutinised—can at the very last moment hold the L1 supplier hostage using the threat of retraction of RFP for the purposes of rent seeking/corruption/undue advantage. To cover up the conspiracy, an amendment regularising retraction of RFPs was incorporated only on 23rd of July, 2018. ( Annexure 21 ).

Mr. Modi continued interference as regards offsets.

When the joint statement was made on 10th of April, 2015, it was presented as if it was the outcome of an urgent requirement of the IAF and the deal would be concluded soon. However, it could not be so, as once the officials at the lower levels in the defence ministry and the IAF realised what had happened, there was resistance from them as regards many of the provisions of this deal. Even the French were reportedly uncomfortable with the offset parameters. It was reported by PTI in May of 2016, that Mr. Modi personally called Mr. Hollande as regards offsets. The reported stated ( Annexure 22 ),

“The French side finally agreed to invest 50 per cent of the value following a phone conversation between Modi and French President Francois Hollande late last year.”

Clearly, Mr. Modi continued taking an unusual interest as regards offsets. On 24th of January, 2016, Mr. Ambani ensured that any French objections were smoothened over when Reliance announced that it had entered into an agreement with President Hollande’s partner, Julie Gayet’s firm, Rouge International, to jointly produce a French film ( Annexure 23 ). Payments to the tune of 1.48 million Euros were eventually made ( Annexure 24 ). Two days thereafter, on 26th of January, 2016, Mr. Modi and Mr. Hollande signed a Memorandum of Understanding for the 36 Rafale aircrafts.

R.A.L. did not have land when agreement for J.V. was made

Dassault has recently stated that they chose R.A.L. because it had land with the facilities of apron. This is evidently a concoction given that as per Dassault itself, the Joint Venture agreement was signed in April of 2015, when R.A.L. did not have any land or industrial license. Reliance’s application for 289 acres of land in Mihan was made on 16th of June, 2015. As per Reliance’s official press release, at the handover ceremony for the land on 29th of August, 2015, Mr. Ambani stated ( Annexure 25 ),

“We started on June, 16, 2015, with first presentation and in less than 10 weeks we got the land. This is a record.”

A bankrupt businessman with exactly zero experience in the defence sector conspires with the Prime Minister of the country, who abuses his office, compromises national security, plays with the lives of the airforce pilots, bypasses all procedures, and secures for Mr. Ambani an undue advantage worth thousands of crores in the largest defence contract in India’s history through a company that did not exist on the day the deal was made. It is quite the record indeed! Mr. Modi abused his influence to ensure that Mr. Ambani got the land at a throwaway price of 64 crores for 289 acres, in a record time. The very same land is supposed to be used for the Joint Ventures between Reliance and Thales (Annexure 26) which is another sub-vendor in the Rafale deal and other Joint Ventures (Annexure 27) of Reliance with other vendors globally. Please note that as per Dassault’s official press release, the agreement for the Joint Venture between Dassault and Reliance had already been done in April of 2015 itself.

R.A.L. did not have industrial license when agreement for J.V. was made

After Mr. Modi misused his influence to ensure that D.A.C. in India complied with his objectives and Mr. Ambani sweetened the deal for the French President, Mr. Ambani applied and got various industrial licenses for a number of his defence companies on the same date i.e. 22nd of June, 2016. A look at the various licenses granted to his various companies is insightful. From the industrial licenses obtained, it is clear that Mr. Ambani, was emboldened by his great heist, and notwithstanding his zero experience in the defence sector, wanted a slice of each and every defence deal, confident in his accomplice, Mr. Modi’s, ability to swing any deal in his favour as the offset partner. Therefore, the incorporation and seeking of various licenses to acquire offsets in helicopters, missiles, land and naval platforms, propulsion systems, unmanned aerial vehicles, naval vessels, “all kinds of night vision devices, sensors, navigation systems & surveillance equipments” and so on and so forth. It would seem that there is nothing that this gentleman with an exceptional track record of failure and insolvency in each and every other industry he has ever undertaken can not do when it comes to a highly skilled and capital intensive sector such as defence. At the time of grant of these licenses, Ms. Nirmala Sitharaman, was the Commerce Minister. She was later elevated to Defence.

R.A.L. was approved by Raksha Mantri as offset partner prior to 23rd of September, 2016

On the 23rd of September, 2016, the main procurement contract was officially signed along with the Offset contract as mandated by the Defence Procurement Procedure (D.P.P.). In order to cover up the liability of the Prime Minister for the conspiracy through which he ensured that Anil Ambani’s firm was made the offset partner, it has been claimed by the government that they are unaware of the details of the Indian Offset Partners of Dassault as it is open for Dassault to submit that detail at the time of seeking of offset credits or one year prior to the discharge of offset obligations. Barely two months after the deal was signed —and after Mr. Modi forced Dassault to have an agreement with Mr. Ambani’s company —on the 5th of August, 2015, DPP, 2013, was amended. The amendments only dealt with Offset conditions. Evidently, even in August of 2015, when the main procurement contract was yet to be signed, somebody in the government was overly concerned with Offsets. The said amendment was thereafter incorporated in DPP, 2016, verbatim, which came into effect on 1st of April, 2016. As will be evident from the facts that follow, notwithstanding the said amendment and the DPP of 2016,[1] it is a lie for the government to claim that they are unaware of the details of the Indian Offset Partners of Dassault as it is open for Dassault to submit that detail at the time of seeking of offset credits or one year prior to the discharge of offset obligations. The relevant provisions of amended DPP, 2013, and DPP, 2016, are as follows:

Clause 7, (as it stands to date in both DPPs), deals with ‘Submission of Offset Proposals’.

Per Clause 7.2, “The technical and commercial offset proposals should be submitted in two separate sealed covers to the Technical Manager of Acquisition Wing.” [Comment: The offset proposal is submitted in two parts. Technical proposal and Commercial Proposal]

Clause 8, deals with ‘Processing of Offset Proposals’.

Per original Clause 8.2,“The TOEC will scrutinize the technical offset proposals 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”.[Comment: This is the clause that is amended on 5th of August, 2015. It is clear that this clause deals only with the ‘technical offset proposal’]

Clause 8.2 was amended on 05th of August, 2015 (Annexure 28) .

Per amended clause 8.2, “The TOEC will scrutinise the technical offset proposals …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. During TOEC the vendor is expected to provide details pertaining of IOP wise work share, specific products and supporting documents indicating eligibility of IOPs in addition to conformity with other clauses of the offset guidelines. If the vendor is unable to provide these details at the time of TOEC, the same may be provided to DOMW either at the time of seeking offset credits or one year prior to discharge of offset obligations through that IOP.” [Comment: The highlighted portion of this amendment is what the government is now seeking refuge under, when they claim that it is open for Dassault to intimate M.o.D about its offset partner either at the time of seeking offset credits or one year prior to discharge of offset obligations. This contention is false, as this amendment is only as regards the technical details of the work share that the IOP is meant to execute, technical details of the products/services that the IOP will manufacture/provide, and documents that establish that IOP is eligible to undertake such technical work. The commercial offset proposal remains unamended to date as will be seen below]

Clause 8.4, (as it stands to date in both DPPs), deals with ‘Commercial Evaluation’.

Per Clause 8.4, “The Commercial Offset Offer will contain thedetailed offer specifyingthe value of the offset components, with a breakdown of the details, phasing, Indian Offset Partners”

The requirements for submitting the Commercial Offset Offer are given in more detail in Annexure III to Appendix D which states,

“Note: Vendor to provide following along with commercial offset offer: –

Undertaking that IOP is an eligible offset partner as per applicable guidelines.

(b) Company profile of IOP/agency.

(c) Details with values of the proposed offset, including details of Tier-1 sub-contractors, if any.

(d) Letter of IOP/agencyconfirming acceptance of the offset project in case of direct purchase or investment.”[Comment: Only Clause 8.2 dealing with ‘technical offset proposal’ was amended on 5th of August, 2018. Clause 8.4 and the requirements for the ‘Commercial Offset Proposal’ were not amended. Per Clause 8.4, Dassault or any other vendor is still required to provide the detailed offer specifying details of the Indian Offset Partners. No relaxation is provided under amended DPP, 2013, or DPP, 2016, as it stands to date, as regards the requirement of reporting of IOP’s in the ‘Commercial Offset Proposal’ under Clause 8.4.]

Clause 8.6 (as it stands to date in both DPPs) deals with the ‘Approval Authority’

Per Clause 8.6, “All Offset proposals will be processed by the Acquisition Manager and approved by Raksha Mantri, regardless of their value.” [Comment: The commercial offset proposal specifying the Indian Offset Partner would have to be approved by the Raksha Mantri before it is incorporated in the final offset contract.]

Finally, per Clause, 2.4 (as it stands to date in both DPPs),

“A separate offset contract will be executed simultaneously with the main contract” [Comment: Once Raksha Mantri approves the ‘commercial offset proposal’ that mandatorily specifies the Indian Offset Partner, it it incorporated in the final offset contract. It is signed simultaneously with the main procurement contract. As the main procurement contract was signed on 23rd of September, 2016, it follows that the offset contract was also signed on the same date, and MoD is aware of the IOP as per the requirements of Clause 8.2 since then].

It is evident from the aforementioned clauses that the government is attempting to mislead by pointing to the amended clause that deals only with ‘Technical Offset Proposal’. The unamended clause as regards ‘Commercial Offset Proposal’ required Dassault to provide details of the Indian Offset Partner (IOP) to M.o.D for the approval of Raksha Mantri. Only thereafter could the main offset contract have been signed. Dassault mandatorily informed M.o.D of its Indian Offset Partner in the Commercial Offset Proposal and that proposal was approved by Raksha Mantri under Mr. Modi’s influence prior to signing of main offset contract on 23rd of September, 2016.

R.A.L. approved by Raksha Mantri even though it violated its industrial license

The approval of Raksha Mantri was without any application of mind due to Mr. Modi’s influence. Even the slightest attempt at verification of Mr. Ambani’s company as an offset partner and his companies eligibility to be an offset partner would have revealed to the Raskha Mantri that R.A.L. was in violation of the Industries (Development and Regulation) Act, 1951. Under the act, the Department of Industrial Policy and Promotion(D.I.P.P.) authorises the location of the industrial unit and the article that is permissible to be manufactured. Refer to the industrial licenses that were en masse granted to Mr. Ambani’s companies. All the licenses were granted for setting up of industrial units in Amreli in Gujarat. In R.A.L’s case, the license was granted specifically for “Manufacture and Upgrade of Airplanes and Helicopters Specially Designed for Military Application ”. Section 11 governs conditions as regards location. Section 11A covers conditions as regards manufacture of any ‘new article’ and states,

“The owner of an industrial undertaking not being the central government which is registered under section 10 or in respect of which a license or permission has been issued under section 11 shall not produce or manufacture any new articles unless —

Omitted In case of an industrial undertaking in respect of which a license or permission has been issued under section 11, he has had the existing license or permission amended in the prescribed manner.”

Violation of the conditions of the license as regards location and the article/s to be manufactured are a punishable offence under Section 24 of the Industries (Regulation & Development) Act, 1951. DIPP’s “List Of Industrial LicencesIssued For Manufacture Of Items Under Defence Industries From January 2011 To 3 July 2018,” still records the location as well as the type of article to be produced by R.A.L. as noted above i.e. for Amreli in Gujarat and for Military Airplanes and Helicopters.

Specially Designed for Military Application”, and then enter into a JV to manufacture parts for a civilian aircraft under that same licence. Once it was clear that R.A.L. had no experience in the defence sector, the defence taken by Mr. Ambani ( Annexure 29 ) and substantiated by the Finance Minister, Arun Jaitley ( Annexure 30 ), was that it is irrelevant as “not a single screw” of Rafale was to be manufactured in India. Instead, Mr. Ambani admitted that parts (wings) for the legacy Falcon Jet would be made by D.R.A.L. The Falcon is a civilian business jet. This is in clear violation of the condition of the licence that R.A.L obtained from the D.I.P.P. R.A.L. cannot take a licence for “Manufacture and Upgrade of Airplanes and Helicopters, and then enter into a JV to manufacture parts for a civilian aircraft under that same licence.

The object of India’s offset policy is to promote manufacturing in the defence sector and promote defence related equipment/services. This object can be suitably met by controlling what the industrial license is issued for. To illustrate, if the requirement is to promote manufacturing of military aircrafts and their components, then the government can control how offsets are discharged by issuing licenses only for Military aircrafts/components. Then all offsets would have to be discharged through the manufacture/export of military aircrafts, their components, etc. In the instant case, manufacturing of a civilian business jet, helps Dassault boost its global supply chain, but it doesn’t boost India’s military aircraft manufacturing capabilities. It is evidently a violation of the license granted to R.A.L. To be clear, civilian aircrafts are in fact included in the list of eligible products/services towards the discharge of offsets. But what products/services actually get allowed by the government to be used to discharge the offset obligations is controlled through the issue of the industrial license that specifies what can be manufactured. As will be clear, this is clearly stipulated in the Offset Guidelines.

Violation of the condition of its industrial license as regards its location and the articles it manufactures, rendered Reliance Aerostructure Limited ineligible as an offset partner for Dassault as per the Offset Guidelines. Clause 4 of the Offset Guidelines deal with the Indian Offset Partner (IOP)

Per Clause 4.2“The IOP shall, besides any other regulations in force, also comply with the guidelines/licensing requirements stipulated by the DIPP as applicable.”

R.A.L. has evidently failed to comply with the licensing requirements stipulated by the DIPP by [a] changing location of manufacturing without due amendment in license & [b] by starting process of manufacturing a ‘new article’ i.e. civilian Falcon aircrafts as opposed to “Manufacture and Upgrade of Airplanes and Helicopters Specially Designed for Military Application”. It has violated Clause 4.2 of the Offset Guidelines. The Finance Minister’s statement, shows that government is aware of this fact. However, Mr. Modi’s influence has ensured that no action has been taken against R.A.L. thus far.

R.A.L. approved by Raksha Mantri even though it was not “engaged in the manufacture” of eligible products/services

R.A.L. was approved by Raskha Mantri in violation of Offset Guidelines

Per Clause 4.1 “Indian enterprises and institutions and establishments engaged in the manufacture of eligible products and/or provision of eligible services, including DRDO, are referred to as the Indian Offset partner (IOP).”

R.A.L. was incorporated on 26th of April, 2015. On 31st of March, 2016, R.A.L. had total assets of 25.49 crores of Rupees as per the consolidated balance sheet of its parent company (Annexure 31). On 31st of March, 2017, R.A.L.’s total assets remained exactly 25.49 crores of Rupees (Annexure 32). This is because the total assets of R.A.L. during both these years, comprised only of the land that Mr. Ambani secured through Mr. Modi’s influence, for a throwaway value, in “record time”. Mr Ambani made no other capital investment for machinery or technology whatsoever in this company. He had no intention of and did not manufacture anything through this company. As evidenced by its balance sheet, on 23rd of September, 2016, when the offset contract was signed, and prior to that when the approval was granted to R.A.L., as an offset partner by the Raksha Mantri, it was not “engaged in the manufacture” of any eligible products and/or provision of eligible services. Thus, R.A.L. was not an Indian Offset Partner and could not have been an Indian Offset Partner for Dassault. The fact that Mr. Ambani’s company was approved as the Indian Offset Partner shows the criminal manner in which Mr. Modi used his influence to ensure that Mr. Ambani secured an undue advantage.

Offsets granted to Mr. Ambani not legitimate consideration for any services he can credibly provide, especially in comparison to H.A.L., which was summarily dropped because of Mr. Modi’s insistence on Mr. Ambani as key offset partner

Park in the accompanying satellite image of 29th of September, 2018. Also see the picture of the facility where Dassault Aviation claims in its press release that components of the legacy Falcon Business Jet are to be manufactured. Having been ‘officially’ approved by the Raskha Mantri as an offset partner, Mr. Ambani made his Joint Venture agreement of April, 2015 (Annexure 18), public on 3rd of October, 2016, and finally incorporated the said Joint Venture on 16th of February, 2017 ( Annexure 33 ). In October of 2017 ( Annexure 34 ), the foundation stone laying ceremony at Mihan was attended by Union Minister Nitin Gadkari and Maharashtra Chief Minister Devendra Fadnavis. All present were aware that parts of the civilian Falcon Jet were to be manufactured at the said industrial unit. It was declared by Mr. Anil Ambani that, “production would start by 2018” ( Annexure 35 ). So what is the status of implementation and production till date? Please see if you can find the DRAL facility with a magnifying glass, if possible, in the 289 acres, of Dhirubhai Ambani Aerospacein the accompanying satellite image of 29th of September, 2018. Also see the picture of the facility where Dassault Aviation claims in its press release that components of the legacy Falcon Business Jet are to be manufactured.

Mr. Modi and Mr. Ambani are trying to cover up their conspiracy by asserting that this tin shed and the land which was given for a subsidised cost of merely 64 crores of Rupees by the exchequers of Maharashtra, is the reason why Dassault aviation “chose” Mr. Ambani’s company with no experience in the defence sector as its offset partner. The land was given to Mr. Ambani in August of 2015, in exchange for his promise to develop an ‘aerospace park’ by investing 6500 crores of Rupees in Mihan and provide employment to thousands of people at the site. The truth of these promises speaks for itself. No capital investment was made by Mr. Ambani’s R.A.L. at this “Aerospace Park” or by any of his other sham defence companies. The only capital investment was the subsidised cost of the land itself. By abusing his public office and using all the influence of the office at his command, Mr. Modi ensured that his accomplice Mr. Ambani received an undue advantage worth thousands of crores of rupees as an offset partner for a pittance.

The people of India are now sought to be hoodwinked into believing that somehow it was Dassault who chose Mr. Ambani’s practically non-existent company over a Navratnacompany such as H.A.L. regarding which, just 17 days prior to the deal, Mr. Eric Trappier had expressed satisfaction and appreciation, and with whom, Dassault has a long history of partnership starting from the time that H.A.L. upgraded Dassault’s Mirage aircrafts and with whom, even as regards Rafale, a work share agreement had already been signed on 14th of March, 2014.

If land is the only reason that Dassault would have chosen Mr. Ambani’s sham company, it could easily have been provided through H.A.L. as well, given that after all it is the people of India who have given the land to Mr. Ambani at hugely subsidised rates. Present Defence Minister, Nirmala Sitharaman, who showed great alarcity and non-application of mind in granting multiple industrial licenses to Mr. Ambani’s practically non existent companies as Commerce Minister, is at the forefront in trying to cover up the conspiracy between Mr. Modi and Mr. Ambani and is day in and day out denigrating and humiliating H.A.L. and its selfless engineers and scientists. To protect the Prime Minister and Mr. Ambani, and in order to cover up the conspiracy, she has stated that H.A.L. did not have the capacity to manufacture Rafale’s. This claim is belied by the fact that H.A.L. has thus far produced over 8 varieties of aircrafts and thousands of them, including the fifth generation Sukhoi’s. At one point in time, then Defence Minister, Mr. Parrikar, is on record as stating that Sukhoi could be a substitute for Rafale. For FY 2017-18, H.A.L. recorded its highest ever turnover of ₹18,283 crore in comparison with the previous year’s turnover of ₹17,603 crore. The Profit Before Tax for the year was ₹3,322 crore. The Profit After Tax (PAT) for the year was ₹2,070 crore. The company produced 40 aircraft and helicopters covering Su-30 MKI, LCA Tejas and Dornier Do-228 in fixed wing, and ALH Dhruv and Cheetal Helicopters in rotary wing. In addition, HAL produced 105 new engines, overhauled 220 aircraft/helicopters and 550 engines. Also 146 new aero-structures for space programmes were produced during the period ( Annexure 36 ). Governments claims that Dassault was not satisfied with H.A.L. are belied by the H.A.L. Chairman, T. Suvarana Raju, who retired recently, was the lead technical negotiator for the original deal, and has dared the government to put the files in the public domain. He stated ( Annexure 37 ),

“When HAL can build a 25-tonne Sukhoi-30, a fourth-generation fighter jet that forms the mainstay of the air force, from raw material stage, then what are we talking about? We could have definitely done it.”He added that, “I was the leader of the technical team for five years and everything had been sorted out…Dassault and HAL had signed the mutual work-share contract and given it to the government. Why don’t you ask the government to put the files out in public? The files will tell you everything. If I build the planes, I will guarantee them.”

Given that Mr. Ambani is sought to be justified as a legitimate offset partner, and more suitable than H.A.L., a look at the balance sheet of his various defence companies as on 31st of March, 2018, is illuminating. Mr. Ambani’s first foray into the defence sector was on, 22nd of December, 2014. Almost three and a half years thereafter, as of 31st of March, 2018, the two companies he had incorporated then, had a overwhelming total asset base of 1 lack Rupees each. They are yet to commence business. The list of Mr.Ambanis sham defence companies is long. Suffice it to say that the same is the case for all of his other defence companies that have been given industrial licenses for manufacturing of aircrafts, naval vessels, UAV’s etc. Total asset base of almost 13 of these companies is 56 Lacks of rupees. Many of these companies were incorporated in 2015. The fact that Mr. Ambani has made close to nil investment over a period of three years in any of these companies is telling. It shows that he has no intention of manufacturing anything for which these companies have been given industrial licenses. Business hasn’t commenced as regards these companies because Mr. Ambani has no intention of running any legitimate businesses in the defence sector. As mentioned earlier, he is close to insolvency, and has no capital base to invest in any defence manufacturing business either.

The only two defence related companies (other than Reliance Naval & Engineering that is facing insolvency proceedings), that have some asset base are Reliance Aerostructure Limited (R.A.L.) and Dassault Reliance Aerospace Limited (D.R.A.L.). R.A.L. is a 100% subsidiary of Reliance Infrastructure and its asset base (84 .26 crores) is the sum total of the capital investment made by Mr. Ambani since April of 2015, towards manufacturing/commencing production. This capital investment includes the 64 crores of Rupees paid for the 289 acres of land in Mihan. In essence, for a total capital investment of less than rupees 84 crores, Mr Anil Ambani has received an undue advantage worth thousands of crores as the key offset partner for Dassault and its various sub vendors such as Thales. And 289 acres of land in Mihan on top of all that. The modus operandi is to squat on land that he has gotten at throw away prices due to Mr. Modi’s influence and squat on industrial license’s granted to it, andconspire with Mr. Modi to bypass a legitimate tender process to discover L1 and go for “Inter-governmental agreement,” where Mr. Modi can abuse his influence to ensure Mr. Ambani is chosen as the offset partner. To further the conspiracy, the DPP, has been so amended to give Mr. Modi, the authority to unilaterally cancel any RFP. Essentially, any L1 is now hostage to the threat of cancellation of RFP by Mr. Modi. In the instant case, Mr. Modi actually cancelled the RFP unilaterally to provide windfall gains for Mr. Ambani through the offset deal that is essentially an undue advantage. Globalvendors and their sub-vendors are being compelled to choose Mr. Ambani, so that he can get an undue advantage. Mr. Ambani is not providing any legitimate services to these vendors. He is not engaged in the manufacture of any defence products or providing of defence services. He has no machinery. No manufacturing plant. No Research & Development. No technical know-how. No competent human resources in defence. No supply chain. No access to raw materials required. Mr. Ambani makes little to no investment in these Joint Ventures. To illustrate, Reliance Rafael Defence Systems Private Limited, is a J.V. with Israeli firm Rafael (distinct from Rafale). Mr. Ambani has made an investment of ZERO rupees in this venture thus far. Of course, this J.V. does not manufacture anything. All of these are dummy companies. The only asset Mr. Ambani’s defence companies have is the land that he gotten at throw away prices through Mr. Modi’s influence and Mr. Modi’s influence itself.

First tranche of undue advantage has been received by Mr. Ambani

Dassault Reliance Aerospace Limited is the Joint Venture that Dassault was forced to enter into because of Mr. Modi’s dishonest and improper execution of his duty. This Joint Venture will be key to fulfilling of thousands of crores worth of offset obligations. In this J.V., Mr. Ambani’s R.A.L. has a share of 51% and Dassault has a share of 49%. As stated earlier, as per the press release of Dassault, this J.V. agreement was made in April of 2015 itself at the instance of the Prime Minister. It was formally incorporated in India on 10th of February, 2017 ( Annexure 38 ). In October of 2017, Dassault announced that it would invest 100 million dollars in Mihan, which would be the single largest FDI in defence sector in India at a single location ever. That would be round about 830 crores of rupees. As per Dassault’s financial statement for 2017 ( Annexure 39 ), by 31st of December, 2017, 4 million euros or about 33 crores of Rupees were given to D.R.A.L by way of advance. By 31st of March, 2018, as per R.I.L’s statement, D.R.A.L, had total assets of 49.75 crores ( Annexure 40 ). It is doubtful that the rest of the 16 crores have been invested by Mr. Ambani either. Probably it has come in from Dassault after 31st of December, 2017. It is clear who is actually investing money in D.R.A.L. It is clear who will continue to invest in D.R.A.L. The fact that Mr. Ambani made no efforts whatsoever through R.A.L. or any of his other sham companies to start manufacturing prior to the J.V. with Dassault, makes clear who will actually do all the work in the said J.V. All Mr. Ambani has done is to use Mr. Modi’s influence to acquire the land at throw away prices and thereafter used his influence to ensure that he receives an undue advantage by way of offsets worth thousands of crores, without actually investing any capital or actually doing any work. Almost nil part of the promised 6500 crores of Rupees has been invested by Mr. Anil Ambani since August of 2015 till now for the ‘Aerospace park’. The tin shed that stands at Mihan today is a testimony to the fact that Mr. Ambani’s sole interest is in securing offsets. Every instalment of investment by Dassault Aviation in D.R.A.L. is an undue advantage received by Mr. Ambani because of Mr. Modi’s abuse of his office. As long as the instalments continue, the offence commenced on 10th of April, 2015, continues. It is an ongoing offence.

Offsets, the price escalation, & loss to public exchequer

It is the conspiracy between Mr. Modi and Mr. Ambani and their sole interest in offsets, that has led to the huge escalation in the price of Rafale deal as compared to the original deal causing thousands of crores of loss to the public exchequer. The amount of offset obligations is proportionally linked to the total cost of the procurement. Thus, higher the total price that people of India had to pay, the higher the offset benefits that Mr. Ambani could receive. The conspiratorial interests of Mr. Modi and Mr. Ambani were directly in variance to the interests of the Indian exchequer. It is elementary that the vendor passes on the mandatory costs of investing through the offsets to the Indian public by building that cost into the price at which the vendor sells the defence equipment in the main procurement contract. Therefore, indirectly, the Indian public pays for not only the actual cost of the equipment that is to be bought, but also the cost of whatever is to be built by way of discharge of offset obligations. It is essentially a subsidy to the defence equipment manufacturers in India who collaborate with the vendor as Indian Offset Partners so as to boost manufacturing in India’s defence sector. It is not the case that every deal where a private Indian company is chosen as an offset partner is corrupt. There are legitimate private sector companies working for decades in manufacturing of defence products who can be suitable offset partners as they have the requisite manufacturing, experience, & know how. They could actually boost India’s defence sector by partnering with global vendors. On the same parameters, in this deal, Mr. Ambani cannot be said to be a legitimate offset partner. It is scandalous that India’s largely poor public will subsidise the cost of civilian Falcon business jets for the richest people in the world. It is the nadir of moral depravity. As per the Offset Guidelines, the normal offset obligation (subsidy to be provided to Indian Offset Partners really) is 30%. It is permissible to raise the obligations to 50%. After forcing Dassault to select Mr. Ambani as their offset partner in April of 2015, and knowing fully well in advance that Mr. Ambani was to be the key offset partner, Mr. Modi thereafter malafidelyensured that the offset obligation was increased to 50% so that Mr. Ambani could receive a larger undue advantage. The French were not comfortable with the same. Why? Because as per the joint statement of 10th of April, 2015, Dassault had committed to providing the new 36 Rafale aircrafts at the same or better price as was in the original deal. At the time they were not aware that offset obligation would be increased. The joint statement reads ( Annexure 41 ),

“The two leaders agreed to conclude an Inter-Governmental Agreement for supply of the aircraft on terms that would be better than conveyed by Dassault Aviation as part of a separate process underway; the delivery would be in time-frame that would be compatible with the operational requirement of IAF; and that the aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by Indian Air Force, and with a longer maintenance responsibility by France.”

Two implications of the Joint Statement were manifest: [i] the price of the 36 Rafales would be cheaper than what was already being negotiated. Since they were being supplied in “fly-away condition”, they had to be cheaper than the 18 Rafales that Dassault had bid to supply in the MMRCA tender. Moreover, [ii] the aircraft and systems were to be “on the same configuration as had been tested and approved by the IAF in the MMRCA evaluation.” That clear and emphatic affirmation in the Joint Statement nails the falsehood that has been spread since then—namely, that the price per aircraft is so much higher because of some novel “India specific enhancements” in the 36 Rafales now contracted. More recently, it has been confirmed that there aren’t any India specific enhancements in the new deal that were not already present in the original deal. (Annexure 42)

The increasing of the offset obligation caught Dassault off guard. When they had committed to the 10th of April, 2015, statement they did not consider that offset obligations would be increased. If Dassault had remained committed to its original price, it would not have allowed them to build in that additional offset obligation of 20% into the total final price. Thus, they were reportedly unhappy about it, and which is why, though the deal was announced with much fanfare in April of 2015, it did not see any further development for a while. That is until Mr. Modi, again taking a very personal interest, reportedly (Annexure 22) called Mr. Hollande, about the offset obligations in particular. After Mr. Modi’s phone call, as per the agreement signed on 23rd of September, 2016, the French agreed to total offset obligations amounting to 50% of the total cost of procurement. This is because Mr. Modi ‘took care’ of their concerns. Firstly, by exercising his influence unduly, he got overruled the benchmark price that was recommended by an expert team led by Mr. MP Singh. This benchmark price had been discovered after a detailed study and after taking into account the views of experts. As has now emerged, when at least three members of the Contract Negotiation Committee objected in writing (Secondly, in order to further compensate Dassault for agreeing to 50% offset obligations, that were to be an undue advantage receivable by Mr. Ambani, and for abetting the conspiracy by taking on board Mr. Ambani as an offset partner —which Dassault would not have naturally done given that he or his companies had no experience and they were close to bankrupt —Mr. Modi using his undue influence and without following due process of seeking SQRs from services, categorization, etc., or floating an RFP for the “add on” packages, decided that some additional equipment would be purchased from the French, for which Dassault would not have been committed by the Joint Statement, and could therefore make up for the increased offset obligations by quoting whatever ridiculously inflated prices it deemed fit. As these ‘add ons’are in the nature of weapons and missiles, a separate procurement process was required to be initiated for the same, as per the requirements of the IAF. As per Clause 2 of Chapter 1 of Defence Procurement Procedure, In light of the Joint Statement, Dassault could not have increased the price of the aircrafts nor could it have altered the specifications. Mr. Modi got around this in two ways:, by exercising his influence unduly, he got overruled the benchmark price that was recommended by an expert team led by Mr. MP Singh. This benchmark price had been discovered after a detailed study and after taking into account the views of experts. As has now emerged, when at least three members of the Contract Negotiation Committee objected in writing ( Annexure 43 ), at least some were promptly sent on leave. Significantly, the objections were raised by Rajeev Verma, then joint secretary (Air) and AR Sule, then finance manager (Air). Overruling of their objections and the benchmark price discovered by the experts was malafide and under the influence of Mr. Modi and then Defence Minister, Mr. Parrikar. Thereafter, an artificially inflated benchmark price was created to comply with the condition of the joint statement, that the price of the new deal would be on same or better terms as compared to the earlier deal., in order to further compensate Dassault for agreeing to 50% offset obligations, that were to be an undue advantage receivable by Mr. Ambani, and for abetting the conspiracy by taking on board Mr. Ambani as an offset partner —which Dassault would not have naturally done given that he or his companies had no experience and they were close to bankrupt —Mr. Modi using his undue influence and without following due process of seeking SQRs from services, categorization, etc., or floating an RFP for the “add on” packages, decided that some additional equipment would be purchased from the French, for which Dassault would not have been committed by the Joint Statement, and could therefore make up for the increased offset obligations by quoting whatever ridiculously inflated prices it deemed fit. As these ‘add ons’are in the nature of weapons and missiles, a separate procurement process was required to be initiated for the same, as per the requirements of the IAF. As per Clause 2 of Chapter 1 of Defence Procurement Procedure,

“Except for medical equipment, the DPP will cover all Capital Acquisitions undertaken by the Ministry of Defence”.

This would have included the ‘add on’ weapons systems such as air to air missiles and air to land missiles, for which the mandatory due process was not followed. It was not followed, and these weapons were bought at heavily inflated rates to allow Dassault Aviation to recover the cost of the additional 20% of offset obligations.

To be clear, the original deal for 126 aircrafts was also inclusive of weapons. Their cost was already included in the 126 aircraft deal. Therefore, only the cost of the new weapons could be inflated and was indeed artificially inflated. Then DefenceMinster, Manohar Parrikar is on record, on 13th of April, 2015, saying that the total cost under the original deal for 126 aircrafts would have been 90,000 crores which was inclusive of all ‘india specific enhancements’ and the weapons/add ons that were included in the original RFP. He stated that,

“We must remember that Rafale is a top-end multi-role fighter . . . but it is quite expensive. When you talk of 126 aircrafts, it becomes a purchase of about 90,000 crores.” (https://youtu.be/kbLJcQltaE0)

If price had been the real concern for the government for discarding the old deal, the government would have considered Eurofighter’s offer of 12th of July, 2014, to reduce its price by a full 20%. Eurofighter was the L2 in the original RFP process. This was obviously not considered because of Mr. Modi and Mr. Ambani’s conspiracy. According to Parrikar the Rs. 90,000 Crore cost was inclusive of everything. ( https://youtu.be/2udl1EHdZ2s ). Manifestly, the cost of manufacturing the aircraft by HAL in India would have been substantially higher than the cost of Rafale fighters procured in the “fly-away condition”. That is because, to manufacture in India, additional costs would have had to be incurred for setting up the requisite infrastructure and the plant, establishing the supply chain, developing vendors, etc. The supplier would also have charged a heavy fee for transfer of technology. Therefore, the price of the Rafale fighter in “fly-away condition,” built in an already running plant in France, would have been substantially less than Rs. 715 crores which is what the total cost on average would have been as per Mr. Parrikar’s own admission for the entire lot of 126 aircrafts. This is why the benchmark price discovered by the expert committee was lower for the 36 Rafale aircrafts because all these additional costs of setting up supply chain in India, of developing vendors in India, of creating the requisite infrastructure and plant in India, of transfer of technology would have been saved by Dassault Aviation in the 36 aircraft deal. However, under the perverse influence of the Prime Minister and the Raksha Mantri, the benchmark price was malafidely discarded by the Defence Acquisition Council, the Contract Negotiation Committee, and the Cabinet Committee on Security. along with requisite equipments, services and weapons. Cost of each Rafale aircraft is approximately Rs. 670 crore and all the aircraft will be delivered by April 2022.” ( In fact, on 18th of November, 2016, in response to a question asked in the Lok Sabha on the acquisition of fighter aircrafts, the MoS, Defence stated that, “Inter-Governmental Agreement with the Government of French Republic has been signed on 23.09.2016 for purchase of 36 Rafale aircraft. Cost of each Rafale aircraft is approximately Rs. 670 crore and all the aircraft will be delivered by April 2022.” ( Annexure 44 ). The scam was however revealed when the actual price of 36 aircrafts was revealed in a Press Release by Dassault and Reliance (Annexure 33) and Financial Press Release statement of Dassault for 2016 ( Annexure 45 ).Both the documents show the total price of the deal to be about Rs. 60,000 crores (about 8.139 Billion Euros) for 36 aircrafts. This is the scam, for it works out to Rs. 1,660 crores per plane. This is more than double the price of the aircraft under the earlier 126 MMRCA deal. And almost Rs. One Thousand Crores more than the price that was furnished by Government itself to Parliament on 18th of November, 2016. This has resulted in a loss of over 36 thousand crores of Rupees to the public exchequer at the cost of national security, solely so that Mr. Ambani could receive undue advantages. So by influencing the manner in which the benchmarking was determined, and influencing the decision of the Contract Negotiation Committee, and by agreeing to purchase a few additional weapons at highly inflated prices —disregarding all acquisition procedures —Mr. Modi ensured that the price per aircraft was increased by 1000 crores of rupees more each so that the final offset obligation and the undue advantage to be taken by Mr. Ambani was as high as possible. This is why Mr. Modi through his influence is now preventing M.o.D from disclosing the price of the procurement to the public and also the component wise breakdown, because that is where the corruption has occurred. Reference to the 2008 secrecy agreement with France is just a pretext. Notwithstanding the said agreement, the Ministry of Defence itself in 2012 had revealed all the details of price, including component wise breakdown, of Nuclear Capable Mirage aircrafts, the Government. These French Mirage aircrafts are also manufactured by Dassault. MoD stated that, “The cost of the contract for upgrade of the Mirage 2000… is Euro 1470 million. The cost of the contract for procurement of the missiles from M/s MBDA, France is Euro 958,980,822.44.” ( Annexure 46 ). MBDA is to be the supplier for the “add on” missiles procured without following due process in the new 36 aircraft deal. If the cost of procurement of missiles from MBDA could have been disclosed in 2012, notwithstanding the secrecy agreement of 2008, it should be revealed in 2018 also. Refusal to do so, discloses the malafide nature of the procurement. But this is only one part of the scam amounting to close to THIRTY SIX THOUSAND CRORE OF RUPEES. The much larger scam is Mr. Ambani securing the maintenance and support contract for these 36 planes from IAF because he has been chosen as the offset partner. Under the original deal, the L1 was determined based on the ‘life cycle cost’ method of the aircraft. That is to say, in determining the cost, the average cost over the entire life cycle of about 30/40 years of the aircraft was calculated. This would have included maintenance, support, & upgradation costs over a period of 40 years. This is how Rafale beat it’s only other eligible contender i.e. Eurofighter. Under the original deal, all the execution of maintenance, support, upgradation would have been done by H.A.L. which has a long history of doing such work. Being a public sector company, it would also have done so at reasonable costs. And the monies paid to it would ultimately have remained with the national exchequer and provided a much needed financial boost to H.A.L. along with transfer of crucial advanced aircraft technology. This is now all out of the window. It is Mr. Ambani now, who has cornered all the financial benefits of the life cycle costs. As per his own press release he has secured an undue advantage worth ONE HUNDRED THOUSAND CRORES OF RUPEES as he has been given the contract for life-cycle maintenance and support! All he has invested thus far for this undue advantage, is rupees 84 crores, which is really just the throw away price he has paid for 289 acres of land in Mihan.

An arms race is going on amongst Mr. Modi’s close associates. It is to get a hand on the offset contracts through Mr. Modi’s abuse of his official position. Mr. Modi is continuing with impunity to conspire with Mr. Ambani to secure him as an offset partner for other deals also. Mr. Ambani has been trying to secure offset contracts in inter-governmental agreements with Russia for various procurements. He had accompanied the Prime Minister to Russia as well. Moreover, Mr. Ambani’s influence in the government is evident by the fact that 43,000 Crores worth of orders for the Navy are stuck on account of whether or not Mr. Ambani’s Reliance Naval & Engineering, are eligible despite the fact that insolvency proceedings have been initiated against it. (Annexure 6)

COMPLAINT

The facts mentioned above clearly show two things; (a) 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; & (b) 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 renumeration 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 the 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. This act being a continuous offence amounts to an offence under:

Sections 7(a), 7(b), & 7(c) read with Explanation (2) of Section 7, of the amended Prevention of Corruption Act, which reads as follows,

Any public servant who,—

(a) obtains or accepts or attempts to obtain from any person, an undue advantage, with the intention to perform or cause performance of public duty improperly or dishonestly or to forbear or cause forbearance to perform such duty either by himself or by another public servant; or

(b) obtains or accepts or attempts to obtain, an undue advantage from any person as a reward for the improper or dishonest performance of a public duty or for forbearing to perform such duty either by himself or another public servant; or;

(c) performs or induces another public servant to perform improperly or dishonestly a public duty or to forbear performance of such duty in ancitipation of or in consequence of accepting an undue advantage from any person;

shall be punishable, with imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

Explanation 2.—For the purpose of this section,—

(i) the expressions “obtains” or “accepts” or “attempts to obtain” shall cover cases where a person being a public servant, obtains or “accepts” or attempts to obtain, any undue advantage for himselfor for another person, by abusing his position as a public servant or by using his personal influence over another public servant; or by any other corrupt or illegal means;

(ii) it shall be immaterial whether such person being a public servant obtains or accepts, or attempts to obtain the advantage directly or through a third party.

The very fact of:

unilaterally cancelling the earlier deal that followed all laid down procedures and when there was no provision for retraction of RFP on 10th of April, 2015;

keeping all other duty bound public servants in the dark;

unilaterally making a new deal without following mandatory due process;

compelling Dassault Aviation to select Mr. Ambani’s company as the Offset partner;

presenting a fait accompli to D.A.C. and influencing other public servants to accord an ex post factoO.N.;

foreclosing the discretion of IAF Services Head Quarters to initiate any new procurement and recommending quantities and specifications through SQRs;

foreclosing the authority of Categorization Committee to recommend the mode of procurement;

malafidely increasing the offset obligations;

malafidelyinfluencing other public servants to reject the expertly determined benchmark price;

procuring ‘add on’ missiles at inflated prices, without following due process, in order to malafidely increase the total procurement price and total offset obligations;

amounts to doing his public duty improperly and dishonestly and influencing other public servants to do their duty improperly and dishonestly. It is an abuse of his office.

The very fact of;

compelling Dassault Aviation to select Mr. Ambani as an offset partner,

improperly influencing Rasksha Mantri to “approve’ R.A.L. as an offset partner when R.A.L. was not eligible to be an offset partner because it was (a) not “engaged in the manufacture” of any defence equipment; (b) was in violation of its industrial licence;

Ambani having made negligible capital investments in his many sham defence companies and in particular R.A.L;

Ambani squatting on the subsidised land granted to R.A.L. after it was already chosen as Offset partner;

Ambani squatting on the many industrial licenses granted en masse to his defence companies;

R.A.L.’s publicly stated decision to manufacture subsidised civilian business jet components in violation of object of offset policy when the conditions of its license do not allow it do so;

Ambani’s negligible experience in the defence sector;

Ambani’s group of companies dire financial health;

shows that Mr. Ambani being a key part in the offset contract is not legitimate and the offsets granted to him are not a legitimate consideration for any service that Mr. Ambani can credibly provide. Offsets sought by Mr. Modi to be received by Mr. Ambani are an undue advantage. Increasing the price to be paid for the aircraft to Dassault company, for no good reason amounts to giving an undue advantage to Dassault & R.A.L both.

7. Public servant taking gratification other than legal remuneration in respect of an official act.—Whoever, being, or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official functions, favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of Section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than It also amounts to an offence under Section 7 of the Prevention of Corruption Act, as it stood before the amendment, as that section would have been applicable on the date of the commission of the offence. It states,.—Whoever, being, or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official functions, favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of Section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than 2 [three years] but which may extend to 3 [seven years] and shall also be liable to fine.

Explanations.—(a) “Expecting to be a public servant.” If a person not expecting to be in office obtains a gratification by deceiving others into a belief that he is about to be in office, and that he will then serve them, he may be guilty of cheating, but he is not guilty of the offence defined in this section.

(b) “Gratification.” The word “gratification” is not restricted to pecuniary gratifications or to gratifications estimable in money.

(c) “Legal remuneration.” The words “legal remuneration” are not restricted to remuneration which a public servant can lawfully demand, but include all remuneration which he is permitted by the Government or the organisation, which he serves, to accept.

(d) “A motive or reward for doing.” A person who receives a gratification as a motive or reward for doing what he does not intend or is not in a position to do, or has not done, comes within this expression.

(e) Where a public servant induces a person erroneously to believe that his influence with the Government has obtained a title for that person and thus induces that person to give the public servant, money or any other gratification as a reward for this service, the public servant has committed an offence under this section.

It also amounts to ‘criminal misconduct’ under Section 13(1)(d)(ii) and 13(1)(d)(iii) as defined in the unamended Prevention of Corruption Act, which would have been applicable when the offence was first committed. It states,Criminal misconduct by a public servant.—(1) A public servant is said to commit the offence of criminal misconduct,

—(d) if he,

— (ii) by abusing his position as a public servant, obtains for himself or any other person any valuable thing or pecuniary advantage; or

—(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.”

The facts disclosed above show that Prime Minister, Mr. Modi, used his official position to commit the following acts; He unilaterally, without any SQRs from the IAF, or any decision of the Categorisation Committee or any Acceptance of Necessity from the Defence Acquisition Council regarding purchasing ‘ready to fly’ Rafale aircrafts from Dassault, entered into a Memorandum of Understanding with the French regarding purchase of 36 Rafale aircrafts. This is clearly an abuse of authority within the meaning of Explanation 2 of section 7 of the Prevention of Corruption Act as well as within the meaning of Section 7, Section 13(1)(d)(ii) & Section 13(1)(d)(iii) of the Prevention of Corruption Act as it stood on the date when the offence commenced. That Mr. Modi himself told the French government as well as the Dassault Aviation company that this contract of 36 ‘ready to fly’ aircraft will be only given to Dassault Aviation, if they gave the major part of the offset contracts in this deal to Mr. Anil Ambani’s company. Since these contracts cannot be said to be legal renumeration for services rendered or to be rendered credibly by Reliance Aerostructure Limited company, it clearly amounts to an undue advantage being taken for Mr. Modi’s friend, Mr. Anil Ambani, within the meaning of Explanation 2 read with Sections 7(a), & 7(b), & 7(c) of the amended Prevention of Corruption Act as it is an continuing offence and monies are being received by Mr. Ambani to date and Section 7, Section 13(1)(d)(ii), & Section 13(1)(d)(iii) of the Prevention of Corruption Act prior to the amendment. From the aforementioned facts, it is clear that Mr. Modi abused his position as a public servant in order to obtain a valuable thing in the nature of offset contracts for Mr. Ambani. Mr. Modi abused his office that resulted in increase in price of procurement and provided a pecuniary advantage to both —Dassault as well as Mr. Ambani’s R.A.L. This would amount to Criminal Misconduct under section 13(1)(d)(ii) of the Prevention of Corruption Act, as applicable on the date of commission of offence. That Mr. Modi presided over the government and got the critical persons involved and Contract Negotiation Committee to increase the contract price of the 36 Rafale aircrafts from 715 crores per aircraft as disclosed by Mr. Parrikar to 1660 per aircraft. This resulted in a pecuniary advantage to both, Dassault Aviation and also Mr. Ambani’s R.A.L. This would amounts to Criminal Misconduct under section 13(1)(d)(iii) of the Prevention of Corruption Act. There was clearly no public interest involved in allowing such a huge increase in the price of the aircraft which were to be paid out of the public exchequer. In this offence, the other members of the Contract Negotiation Committee as well as the Defence Minister would be complicit and would be abettors. These offset contacts would have been finally approved by Mr. Parrikar under Clause 8.6 of the offset guidelines and therefore he would also be guilty of the said offence. Dassault Aviation, and more particularly, Mr. Eric Trappier, were induced by way of increase in total price of the procurement to abet in the commission of the aforementioned offences.

5. In light of these facts,

We call upon you to register an F.I.R., for the offence under section 7(a) & 7(b) & 7(c) read with Explanation 2 of Section 7, of the amended Prevention of Corruption Act, and Section 7, Section 13(1)(d)(ii), & Section 13(1)(d)(iii) of unamended Prevention of Corruption Act, against the Prime Minister, Mr. Modi, and investigate and prosecute the matter. We call upon you to register an F.I.R., for the offence under section 7(a) & 7(b) & 7(c) read with Explanation 2 of Section 7, of the amended Prevention of Corruption Act, and Section 7, Section 13(1)(d)(ii), & Section 13(1)d(iii) of unamended Prevention of Corruption Act, against the then Defence Minister, and investigate and prosecute the matter. We call upon you to register an F.I.R. against Dassault Aviation and more particularly, it’s C.E.O., Mr. Eric Trappier, for abetment of the said offences, and investigate and prosecute the matter. We call upon you to register an F.I.R. against Mr. Anil Ambani for conspiring with the Prime Minister, Mr. Modi, to receive an undue advantage/pecuniary gain against public interest, and investigate and prosecute the matter.

6. We are also aware that recently, Section 17(A) of the act has been brought in by way of an amendment to introduce the requirement of prior permission of the government for investigation or inquiry under the Prevention of Corruption Act.

We are also aware that this will place you in the peculiar situation, of having to ask the accused himself, for permission to investigate a case against him. We realise that your hands are tied in this matter, but we request you to at least take the first step, of seeking permission of the government under Section 17(A) of Prevention of Corruption Act for investigating this offence and under which, “the concerned authority shall convey its decision under this section within a period of three months, which may, for reasons to be recorded in writing by such authority, be extended by a further period of one month”. Of course, prior sanction is not necessary, for registration of F.I.R. and investigating the offences committed by Mr. Ambani and Mr. Trappier.

Yashwant Sinha, ArunShourie, Prashant Bhushan.

Copy to: Sh. K.V. Chowdary,

Central Vigilance Commissioner,

SatarkataBhavan, A-Block, GPO Complex,

INA, New Delhi, Delhi 110023

[1]References to DPP, 2013 and DPP, 2016, should be read as references to the offset guidelines contained in Appendix D of Chapter 1 of DPP, 2013, and DPP, 2016, respectively.