Supreme Court Upholds Rafale Deal, Dismisses Review Petitions: Yashwant Sinha vs. CBI (2019)

Date of the Judgment: 14 November 2019

Citation: (2019) INSC 928

Judges: Ranjan Gogoi, CJI, Sanjay Kishan Kaul, J., K.M. Joseph, J.

Can the Supreme Court review its own judgment on the Rafale deal? The Supreme Court of India addressed this question while hearing review petitions against its earlier judgment. The court examined whether there were errors apparent on the face of the record that warranted a review of its previous decision. The bench was composed of Chief Justice Ranjan Gogoi, Justice Sanjay Kishan Kaul, and Justice K.M. Joseph, with Justice Joseph writing a separate concurring opinion.

Case Background

The case involves a series of petitions challenging the procurement of 36 Rafale fighter jets by the Indian government. The petitioners raised concerns about the decision-making process, pricing, and the selection of the Indian Offset Partner (IOP). The original writ petitions were dismissed by the Supreme Court. The review petitions were filed seeking a re-examination of the judgment. The petitioners alleged that the government had suppressed facts and relied on false documents. They also contended that the court had not addressed their prayer for the registration of an FIR and investigation by the CBI.

Timeline

Course of Proceedings

The Supreme Court had initially dismissed the writ petitions challenging the Rafale deal. Subsequently, review petitions were filed, and the court allowed an open court hearing. The petitioners argued that the court had overlooked crucial aspects of their case, including the prayer for an FIR and investigation. The Attorney General raised preliminary objections regarding the documents sought to be produced, which were overruled by the court. The court also addressed an application for correction of the order filed by the Union of India.

Legal Framework

The Supreme Court considered the following legal provisions:

• Article 32 of the Constitution of India: This article grants the Supreme Court the power to issue directions or orders for the enforcement of fundamental rights.
• Article 137 of the Constitution of India: This article grants the Supreme Court the power to review its judgments or orders.
• Section 154 of the Code of Criminal Procedure, 1973: This section deals with the registration of First Information Reports (FIRs) for cognizable offenses.
• Section 340 of the Code of Criminal Procedure, 1973: This section deals with initiating criminal proceedings for perjury.
• Order XLVII of the Supreme Court Rules, 2013: This order deals with the procedure for review petitions in the Supreme Court.
• Order XLVII Rule 1 of The Code of Civil Procedure, 1908: This rule specifies the grounds for review of a judgment in civil cases.
• Section 11 of the Code of Civil Procedure, 1908: This section deals with the principle of res judicata.
• Section 17A of the Prevention of Corruption Act, 1988: This section requires prior approval for conducting an inquiry or investigation into offenses alleged to have been committed by a public servant.

Arguments

Petitioners’ Submissions:

• The petitioners argued that the Supreme Court had not addressed their primary prayer for the registration of an FIR and investigation by the CBI, as mandated by the Constitution Bench judgment in Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1].
• They contended that the court had prematurely reviewed the contract without the benefit of investigation into disputed questions of fact.
• The petitioners alleged that the government had relied on false documents, including a “non-existent CAG report,” and suppressed crucial information.
• They argued that the decision-making process was flawed, citing the absence of a prior Acceptance of Necessity (AON), lack of a Sovereign Guarantee from France, and the overlooking of objections by expert members of the Indian Negotiating Team (INT).
• The petitioners also raised concerns about the induction of Reliance Aerostructure Limited (RAL) as an offset partner, alleging it was done to favor a particular business group.
• They pointed out that the court had misconstrued that all the Reliance Industries were of one group.
• They argued that there were parallel negotiations being undertaken by the Prime Minister’s Office (PMO) which was strenuously objected to by the Indian Negotiating Team (INT).

Respondents’ Submissions:

• The respondents argued that the review petitions were meritless and that the court had already considered all aspects of the case.
• They contended that the court’s findings were based on sound legal principles regarding the scope of judicial review in matters involving national security and defense.
• The respondents argued that there was no error apparent on the face of the record that would justify a review.
• They stated that the CAG had conclusively held that the benchmark by the INT was unrealistic and that the 36 Rafale aircrafts deal was 2.86 per cent lower than the audit aligned price.
• The respondents denied that the offset guidelines were amended to benefit any particular industrial group and that the waiver of sovereignty/bank guarantee in Government to Government agreements is not unusual.
• They argued that the court had satisfied itself with the material made available and that it is not the function of the court to determine the prices.
• They contended that the internal mechanism of such pricing would take care of the situation.
• The respondents argued that the petitioners cannot be permitted to state that having taken recourse to this remedy, they want an adjudication process which is really different from what is envisaged under the provisions invoked by them.
• They argued that there were undoubtedly opinions expressed in the course of the decision making process, which may be different from the decision taken, but then any decision making process envisages debates and expert opinion and the final call is with the competent authority, which so exercised it.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issues:

1. Whether there was an error apparent on the face of the record that warranted a review of the court’s earlier judgment.
2. Whether the court had overlooked the prayer for registration of an FIR and investigation by the CBI.
3. Whether the court had misconstrued any facts or legal provisions.
4. Whether the court had not followed the binding decision of a Constitution Bench in Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1].

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1]*: The Court acknowledged that it had not followed the binding decision of the Constitution Bench in Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1], which mandated the registration of an FIR if the information discloses a cognizable offense.
• Mukesh v. State (NCT of Delhi) [(2018) 8 SCC 149]*: The Court cited this authority to reiterate that a review is not a rehearing of the original matter.
• P.N. Eswara Iyer And Others v. Registrar, Supreme Court of India [(1980) 4 SCC 680]*: The Court referred to this authority to explain that the scope of review in criminal matters is as wide as in civil matters.
• Other Authorities: The Court considered other authorities to explain the scope and limitations of review jurisdiction, as well as the grounds for review.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors:

• The court acknowledged that its original judgment had not followed the binding precedent of Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1], which mandated the registration of an FIR for cognizable offenses.
• The court recognized that it had misconstrued the facts regarding the Reliance group companies and the arrangement between the parent Reliance Company and Dassault.
• The court was also influenced by the fact that the petitioners had approached the court late in the day, and the court’s jurisdiction did not extend to permit it to sit in judgment over the wisdom of the Government of the day, particularly in matters relating to purchase of the goods involved in this case.
• The court noted that the petitioners themselves, in the complaint, request to seek approval in terms of Section 17A but when it comes to the relief sought in the Writ Petition, there was no relief claimed in this behalf.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

Logical Reasoning Flowchart

The court’s reasoning was based on the following:

• The court recognized that it had not followed the binding precedent of Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1], which mandated the registration of an FIR for cognizable offenses.
• The court admitted that it had misconstrued the facts regarding the Reliance group companies and the arrangement between the parent Reliance Company and Dassault.
• The court also considered the limitations of judicial review in matters of national security and defense procurement.
• The court noted that the petitioners themselves, in the complaint, request to seek approval in terms of Section 17A but when it comes to the relief sought in the Writ Petition, therewas no relief claimed in this behalf.

Final Order

The Supreme Court, while acknowledging the errors in its original judgment, ultimately dismissed the review petitions. The court held that while a review is not an appeal in disguise, a decision that betrays an error which is apparent does entitle the court to exercise its jurisdiction. The court found that the original judgment did not follow the binding precedent of Lalita Kumari v. Government of Uttar Pradesh [(2014) 2 SCC 1]. The Court also admitted that it had misconstrued the facts regarding the Reliance group companies. However, the court did not find sufficient grounds to order a fresh investigation or interfere with the Rafale deal. The Court was also influenced by the fact that the petitioners had approached the court late in the day, and the court’s jurisdiction did not extend to permit it to sit in judgment over the wisdom of the Government of the day, particularly in matters relating to purchase of the goods involved in this case. The court noted that the petitioners themselves, in the complaint, request to seek approval in terms of Section 17A but when it comes to the relief sought in the Writ Petition, there was no relief claimed in this behalf.

Dissent

Justice K.M. Joseph wrote a separate concurring opinion, agreeing with the dismissal of the review petitions. However, he emphasized that the court should have addressed the prayer for registration of an FIR and investigation by the CBI in the original judgment. Justice Joseph also expressed concern about the limited scope of judicial review in matters of national security and defense. He stated that the Court should have been more circumspect in matters of this nature.

Conclusion

The Supreme Court’s decision in Yashwant Sinha vs. CBI (2019) highlights the limitations of judicial review in matters of national security and defense procurement. While the court acknowledged errors in its original judgment, it ultimately upheld the Rafale deal. The case also underscores the importance of following binding precedents and the need for a thorough examination of facts before making a decision. The court’s decision to dismiss the review petitions, despite acknowledging errors, reflects the balance it seeks to maintain between judicial oversight and executive prerogative.