SCO Shorts: One Rank One Pension

On March 16th 2022, the SC upheld the OROP policy as proposed by the Union Government.

On March 16th 2022, a Bench comprising Justices D.Y. Chandrachud and Surya Kant upheld the ‘One Rank One Pension’ (OROP) policy as proposed by the Union Government.

What is OROP?

‘One Rank One Pension’ (OROP) is a system of paying uniform pensions to armed forces servicemen retiring with the same rank and years of service, regardless of their date of retirement. The OROP policy has been a continuous demand from army officers and veterans since 1973.

When the policy was finally passed in November 2015, army officers and veterans objected. They claimed that the 2015 OROP policy differed from the original promise based on the Koshyari Committee report. In the 2015 policy, enhancements in pension were not ‘automatically’ passed on to past pensioners.

As per the 2015 policy, servicemen who retired prior January 1st 2014 would be entitled to pension on the basis of the average of the maximum and minimum salary drawn for their rank in 2013. Servicemen who retired after January 1st 2014 would receive pension based on their last drawn pay. The rates of pension would be revised every five years, rather than automatically, with the first revision due in 2019.

They objected to the creation of two classes of pensioners earning different rates of pension despite having retired at the same rank and having served for the same amount of time.

The Issue

The petitioners claimed that the 2015 policy was arbitrary and discriminatory under Articles 14 and 21—it created two separate classes of retirees having the same rank and years of service.

Further, the petitioners claimed that the Union government reneged on their OROP promise by not adhering to the Koshyari Committee report.

Why it Matters

OROP addresses the generational difference in pensions received by different defence personnel. The decision determines how India’s 26 lakh defence pensioners will be affected by the 2015 OROP policy.

The Union government is left with the arduous task of choosing between the people and the purse—placating the retired servicemen or dealing with an additional Rs. 1.45 lakh crore bill.

The Challenge

Ex-servicemen challenged the OROP policy at the Supreme Court on the grounds that the policy was arbitrary, discriminatory, and violated the understanding of OROP as outlined in the Koshyari Committee Report.

The Court dealt with two questions:

    1. Is the Union’s 2015 OROP policy arbitrary and discriminatory?
    2. Was the Union’s 2015 OROP scheme contrary to the original policy decision of the Government?

What did the Court say?

The Supreme Court held that the policy was not discriminatory—the same definition of OROP was applicable to all pensioners irrespective of their date of retirement.

All pensioners are subjected to the same periodic review—no separate category was made for automatic review.

Additionally, the decision to use the average of the maximum and minimum salary drawn for the rank in 2013 is a policy decision. As such, the Court does not have the jurisdiction to interfere with the decision.

The Court also held that there was no legal mandate entitling pensioners holding the same rank to the same amount of pension.

The Bottom Line

The Supreme Court upheld the Ministry of Defence’s November 2015 communication. The 2015 policy could not be struck down merely because it violated the ‘original understanding’ of the policy. The makers of a policy are at liberty to determine its implementation.