Following the attorney general’s advice to the ministry of defence that there were grounds to cancel the ` 3,600 crore AgustaWestland deal, the MoD is likely to issue a show cause notice to the Anglo-Italian firm.
The opinion received from the attorney general is that the firm “breached its contractual obligations and the integrity pact”, sources said.
The government has already frozen the contract for supply of 12 AW-101 VVIP choppers to the IAF after allegations that `360 crore were paid as bribe.
The IAF has already received three helicopters and delivery of the rest has been put on hold.
Last week, the company said it has invoked arbitration proceedings against the defence ministry for “unilaterally” freezing the deal.
The defence ministry had earlier issued a show cause notice to AgustaWestland on February 15 asking it to explain within seven days the bribery allegations against it after the alleged scam was exposed in Italy. In its reply, the company had denied the allegations.
Former IAF chief SP Tyagi is among those under a cloud in connection with the kickback charges.