The hearing before a bench headed by Chief Justice Ranjan Gogoi saw Attorney General K K Venugopal opposing advocate Prashant Bhushan who wanted to submit information on the secrecy clause of the Rafale agreement.
"Secrecy agreement has to be secret and how he is producing it in court," Venugopal said when Bhushan raised the issue of secrecy clause.
Bhushan, appearing on behalf of himself and former Union ministers Yashwant Sinha and Arun Shourie, alleged that the government was hiding behind the secrecy clause and has not disclosed price of the Rafale jets.
The CJI told Bhushan,"We are giving you full hearing. Use this opportunity carefully and cite only those things which are necessary."
The bench, also comprising justices S K Kaul and K M Joseph, is likely to peruse the pricing details of the jets submitted by the government in a sealed cover.
During the hearing, Bhushan said the price per aircraft was 155 million Euro and now, it was 270 million Euro. This shows that there was hike of 40 per cent in its price, the advocate said.
He said the CBI is bound to register an FIR in this case.
The lawyer alleged that there was a conspiracy with French company Dassault, which granted the offset right to Reliance, and it amounts to gratification and constitutes an offence.
He said Reliance has no competence of executing the offset contract.
Bhushan said the petition by them has been filed after the CBI did not register the FIR under the Prevention of Corruption Act.
He said this matter needs an investigation and argued that how can somebody say there was no need of the court-monitored probe.
Bhushan quoted ex-French PM Franois Hollande and other Dassault officials to impute criminal motive in granting the offset contract to Reliance.
FIR is the legal requirement of the law and this court should order registration of the FIR, he added.
The activist-lawyer submitted that the NDA government "short circuited" the acquisition process by taking the Inter Government Agreement (IGA) route to avoid giving tender.
He said there was no sovereign guarantee from the French government in the deal and argued that initially the Union Law Ministry flagged the issue and later gave in to the proposal of entering into IGA.
Bhushan, referring to the process of defence acquisition, said the Air Force needed 126 fighter jets and had intimated it to Defence Acquisition Council (DAC).
He said initially, six foreign companies had applied and two firms were shortlisted during the earlier process.
Later, the deal went to French firm Dassault and state-owned Hindustan Aeronautics Ltd was part of it. But, suddenly a statement was issued which said there will be no technology transfer, and only 36 jets would be procured, the lawyer told the court.
Bhushan submitted that nobody knows about the alleged change in the deal done by the prime minister, and even the defence minister was not aware about the change.
Advocates M L Sharma, Vineet Dhanda and AAP MP Sanjay Singh, also advanced their arguments before Bhushan.
Sharma, who opened the argument, told the court that the IGA was "illegal" and sought an investigation into the matter.
Dhanda sought a proper reply from the Centre on his plea questioning the Rafale deal.
AAP leader's counsel Dheeraj Singh asked as to why the government reduced the deal of 126 jets to 36.
He said the government should have increased the number of jets when there was a concern that adversaries were inducting more fighter jets.
Bhushan also raised the same point as Singh and said three and a half years have passed since the deal was signed on 36 Rafale jets but no aircraft have been received till now.
The first jet is to be delivered in September 2019 and delivery to continue till 2022, he said.
"If the 126 aircraft deal was still on, at least 18 jets would have been delivered by April 2019," he submitted.
Hearing is currently underway in the top court.
The petitions in the matter have been filed by advocates M L Sharma, Vineet Dhanda.
Later, AAP MP Sanjay Singh also filed a petition.
Former Union ministers Yashwant Sinha, Arun Shourie and activist lawyer Prashant Bhushan also filed a joint petition.
Reliance in previous statements has said the Indian government, French government, Dassault and Reliance have clarified on multiple occasions there was no offset contract for Rs 30,000 crore to Reliance as alleged by the Congress.