Sunday, April 16 2006 13:28 Hrs (IST) - World Time -

New Delhi: Government has rejected calls for cancellation of the Rs 13,500 crore deal with a French company to acquire six Scorpene submarines, but said it could be considered if it was proved middlemen were involved in it.

"The courts are seized of the matter as a number of suits have been filed and we propose to go by the adjudication process," Defence Minister Pranab Mukherjee told sources.

'The Minister, who had faced opposition attack in Parliament and outside on the issue," said Government has no plans to order a probe since the matter is before courts.

"Allegations have been levelled and the French company (Thales) has filed defamation suit saying that e-mails and documents published in a news journal are fabricated," Mukherjee said observing that it was now upto the judiciary to take a stand.

"The contract can be cancelled only if it is proved that the company (involved in the deal) had employed middlemen," the Defence Minister said, dismissing opposition charges.

Mukherjee said that naval operations directorate war room leak case and allegations of payment of kickbacks in the Scorpene deal were two issues.

"In the war room leak, CBI investigation is currently on and if any link is established in the two cases, then theprobe can also cover the submarine contract," he said.

In the course of a wide-ranging interview, Mukherjee touched upon issues like floating of international tenders to acquire 126 new multi-role fighter aircraft for IAF and the ongoing modernisation drive in the armed forces.

While stating that there was no no proposal to raise the numbers of aircraft to be bought, the Defence Minister said, at the same time, efforts would be on to maintain the squadron strength of the Air Force in a battle-readiness stage.

"We are in the process of phasing out of Mig-21 and some other older fighters but we have to ensure that effectivebattle strength of our air warriors is maintained," Mukherjee said.

Asked whether the delay in integrating weapon systems and radars in the country's indigenous Light Combat Aircraft (LCA) would not not necessitate acquisition of much larger number of warplanes, the Defence Minister said Defence Research and Development Organisation (DRDO) was working on keeping LCA project on track.

"The DRDO is working out arrangements to seek collaboration in weaponisation and manufacture of indigenous Kaveri engine for the LCA," he said.

The Minister further said that the Government had given the go ahead for induction of ten LCAs in Air Force to begin with.

Maintaining that the modernisation drive in the armed forces was on course, Mukherjee said that the emphasis of his Government was to reverse the trend of erstwhile NDA regime of not not being able to utilise the budgetary outlays on the capital front.