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Rafale deal verdict: SC raises bar for review of defence contracts

New Delhi: Rejecting any judicial intervention in the purchase of 36 Rafale aircraft by the government, the Supreme Court said that defence procurement contracts “should be subject to a different degree and depth of judicial review” under Article 32 of the Constitution, and judicial scrutiny will have to be made “keeping in mind the confines of national security”.

“It is our considered opinion… that the extent of permissible judicial review in matters of contracts, procurement, would vary with the subject matter of the contract and there cannot be any uniform standard or depth of judicial review which could be understood as an across the board principle to apply to all cases of award of work or procurement of goods/material. The scrutiny of the challenges before us, therefore, will have to be made keeping in mind the confines of national security, the subject of the procurement being crucial to the nation’s sovereignty,” the bench led by the Chief Justice of India said.

This verdict may shape future cases on issues involving defence procurement. The bench cited previous judicial pronouncements of the Supreme Court on the issue of judicial review of administrative decisions regarding award of tenders and contracts.

“The tender is not for construction of roads, bridges, etc. It is a defence tender for procurement of aircraft. The parameter of scrutiny would give far more leeway to the government, keeping in mind the nature of the procurement itself… The triple ground on which such judicial scrutiny is permissible has been consistently held to be ‘illegality’, ‘irrationality’ and ‘procedural impropriety,” the bench said.

“We are satisfied that there is no occasion to really doubt the process, and even if minor deviations have occurred, that would not result in either setting aside the contract or requiring a detailed scrutiny by the court,” it said.

The bench underlined that it will “not be correct” for the court to sit as an “appellate authority” to “scrutinise each aspect of the process of acquisition”.

The bench reiterated that various judicial pronouncements of the Supreme Court emphasise that scrutiny should be limited to the “Wednesbury Principle of Reasonableness and absence of mala fides or favouritism” — a reasoning or decision is Wednesbury unreasonable if it is so unreasonable that no sensible person could have taken such a decision.

“It cannot be lost sight of, that these are contracts of defence procurement which should be subject to a different degree and depth of judicial review… We cannot sit in judgment over the wisdom of deciding to go in for purchase of 36 aircraft in place of 126. We cannot possibly compel the government to go in for purchase of 126 aircraft,” it said.