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Reliance sues Congress leaders for Rs 5000 crore

August 26, 2018 09:52 AM

New Delhi: The Anil Ambani-owned Reliance Infrastructure Limited (RIL) has initiated defamation cases against several senior leaders of the Congress party for raising the issue of alleged cronyism in the controversial purchase of 36 Rafale fighter jets. The legal action follows “cease and desist” notices sent by the company to many members of the Congress’s communications team – including Randeep Surjewala, Pawan Khera, Priyanka Chaturvedi, Shaktisinh Gohil, Jaiveer Shergill, Arjun Modhwadia and Sunil Jakhar – around a week ago.

The Congress, over the past few months, has been attacking the National Democratic Alliance government on the issue. It has accused Prime Minister Narendra Modi of reversing the previous deal, which the United Progressive Alliance government had struck with the French government, leading to a cost escalation, loss of manufacturing opportunities for Indian industry, particularly the public sector Hindustan Aeronautics Ltd, and to a private company like Reliance getting involved in the process.

The party has made two primary accusations against the Modi government: one, while the previous agreement provided for 126 jets to be bought at Rs 526 crore per plane, the 36 news ones will be bought at more than Rs 1600 crore each, causing a huge loss to the exchequer; two, HAL, which would have logically handled the offset contracts linked to the manufacture in India of all but a handful of planes bought in flyaway condition has the original deal remained, had lost out in the new agreement, and instead, Dassault Reliance Aerospace Limited (DSAL) – a joint venture between Reliance Defence Limited, a subsidiary of RIL, and Dassault –  was given the contract. According to the party, the DSAL’s offset contract is worth Rs 30,000 crore. It also says that “a consequent lifecycle cost contract” worth Rs 1 lakh crore was also awarded to it.

The decision to sideline HAL and award the the contract to Reliance, which had no previous experience in manufacturing fighter planes or aerospace equipment and has accumulated debts amounting to around Rs 45000 crore, became the point around which the Congress has been targeting the Modi government.

While the Modi government is yet to issue a detailed factual rejoinder to the accusations, RIL has said that the Rafale deal was a government-to-government agreement and that the company had nothing to do with it. It has said that Dassault Aviation, which manufactures Rafale jets, chose RIL as its offset partner on its own and without any intervention of both the governments – more like a bilateral private agreement between the two companies.

What the defamation notice says

The RIL’s defamation cases against the Congress leaders were filed in this context. Interestingly, the company has moved a city civil court in Ahmedabad, where the company has only a branch office.

A senior leader of the Congress party told The Wire on the condition of anonymity, “Around seven to eight leaders have got legal notices from the Ahmedabad court. We think the company’s action is a little out of place as we have been attacking the Union government on the issue and not RIL as such. We will have to consult our legal team to decide on our future course of action.”

The Wire has accessed one such defamation suit seeking damages of a whopping Rs 5,000 crores, lists three plaintiffs – RIL, RDL and Reliance Aerostructure Limited, a subsidiary company of RDL – against one Congress leader.

Mentioning a press briefing that the defendant addressed, the notice says, “The cause of action to file present suit has arisen on account of scandalous, frivolous, misleading, derogatory statements made by the defendant…with a view to harm the reputation of the plaintiffs and the Reliance group of companies.”

It further says the statements made by the Congress leader at the press briefing are “wholly incorrect and misleading and made with a pre-determined motive…”. It says one of the motives could be that the defendant was acting at the behest of its “corporate rivals and forces inimical of the plaintiffs and the Reliance Group of Companies.”

The notice then lists out the leader’s statements which attacked the Modi government for unduly favouring RDL instead of HAL for the offset contract.

In its plea, the RIL, while reiterating its position on the Rafale deal, says, “No contract exist between the ministry of Defence and the Reliance group on the 100 percent export from France, with respect to the 36 Rafale Fighter Jet Programme.”

It also mentions that a legal notice was sent to the Congress leader to “cease and desist” from speaking about RIL in press briefings about the Rafale deal and to hold a fresh press meet to retract unambiguously and apologise for the defamatory statements made earlier. It says it was now filing a defamation suit because the defendant failed to comply with the clauses of cease and desist notice, meaning that the leader continued to speak about publicly about the Rafale deal.

“It is submitted that the defendant has not complied with the said legal notice and therefore, the need arises to file the present suit claiming damages, presently estimated at Rs 5,000 crores,” the defamation notice says.

“The plaintiffs state that on account of the defamatory statements made by the defendant, the plaintiffs are facing worldwide embarrassment by way of inquiries being made and have consequently lowered the plaintiffs’ and Reliance Group of Companies’ reputation and goodwill worldwide. Therefore, the defendant, besides being liable for penal consequences thereof, is also liable to pay damages to plaintiffs,” it says, adding that they reserve the right to claim further damages after “further ascertainment” of damages caused to its share capital, share price, assets, investments, overall credibility and reputation enjoyed by it among the public.

The companies also say they will file “a separate application seeking ad-interim and temporary injunctions against the defendant.”

Congress ready to fight it out

While RIL has gone ahead with a defamation suit, Congress leaders appear to be in no mood to restrain themselves on the Rafale deal. Several Congress leaders saw this as an intimidation tactic by the company to silence dissent. Some of them took to Twitter to ridicule the notice.

On Saturday, former Union home minister P. Chidambaram alleged that Modi government violated defence procurement procedures in the Rafale deal. 

Even as the Union government has chosen to not clear the air, a Congress leader told The Wire, “The questions around the Rafale deal point towards one of the biggest scams in India. We have taken care to put in public domain only those facts about the deal which were already public. Each and every question around the deal we have raised are based on official documents of either the government or the companies which are involved.”

“The legal notices are nothing but threats … to get us to stop raising something that is clearly a public interest issue. We are prepared to fight. This is not only an attack on us but on our democracy,” the leader added.

(Published with thanks from The Wire)

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