Whether IAF can do anything wrong or not, you cannot absolve HAL and their smug attitude of this. If you are faulting the IAF, that's because you haven't watching events on this issue closely. HAL has known the status of the Deepaks for decades because it has been maintaining them. Along with AJT, the need for basic trainers has been doing the rounds for over a decade.
HAL never seriously pushed proposals around this at all. And when the reliability of the Deepaks fell so low that they had to ground the entire fleet, that's when IAF went to pilatus. Lemme ask you, what is the need for an intermediate trainer when the basic trainers are in such a big mess. HAL has been pushing the IJT, why didn't they start a program for the BJT 15 years ago like they did for the IJT? Besides, why should the IAF believe them? They never delivered anything on time and you don't want crucial training to stop because of them?