Manohar Lal Sharma v. Narendra Damodardas Modi & Ors. (Rafale Deal case)
Background
This group of four public interest litigations challenged the Indian Government's 2016 Inter-Governmental Agreement with France for procurement of 36 Rafale fighter jets, which replaced an earlier, long-stalled plan to buy 126 such aircraft (partly built in India by HAL under licence). The petitions were triggered by newspaper reports of a statement attributed to former French President Francois Hollande suggesting the Indian Government had specified Reliance as the Indian Offset Partner. Petitioners, including a practicing advocate, a member of Parliament, and former ministers Yashwant Sinha and Arun Shourie along with activist-lawyer Prashant Bhushan, sought registration of an FIR, investigation, and quashing of the agreement, raising concerns about the decision-making process, pricing, and the choice of the Reliance group as offset partner over the public-sector HAL.
Decision Breakdown
The Supreme Court held that judicial review of defence procurement decisions is necessarily narrower than ordinary commercial tenders, given the national-security and sovereignty dimensions involved, and is confined to examining illegality, irrationality, or procedural impropriety in the decision-making process, not the wisdom, pricing, or technical merits of the choice itself. On the decision-making process, the Court found broad compliance with the Defence Procurement Procedure 2013 framework, noting the earlier 126-aircraft deal had stalled for years over unresolved manufacturing issues with HAL and that deteriorating regional security made a fresh procurement path reasonable. On pricing, having reviewed confidential cost material in sealed cover, the Court declined to conduct its own price comparison, noting the respondents claimed a commercial advantage and that pricing details were sensitive and already reviewed by the Comptroller and Auditor General. On the offset partner issue, the Court found that under the guidelines the vendor (Dassault), not the Government, was free to choose its own Indian offset partner, and that there was no material showing government favouritism toward Reliance. The Court dismissed all the writ petitions, finding no basis to intervene, with each party bearing its own costs, and clarified its findings were made specifically in the context of Article 32 writ jurisdiction.
Lesson Learnt
Courts apply a deliberately narrower standard of judicial review to sensitive defence procurement decisions than to ordinary government contracts: a citizen cannot get a court to re-examine pricing, technical choices, or commercial partner selection in such matters merely on the basis of media reports or suspicion, without concrete evidence of illegality or bad faith in the decision-making process itself.