INDIAN EX SERVICEMEN MOVEMENT & ORS V. UNION OF INDIA & ORS (2022)

COURT: The Supreme Court of India

BENCH: Hon’ble Dr.Chandrachud, Surya Kant

DATE OF JUDGMENT: 16 March 2022

FACTS

The current petition deals with the challenges aroused from “One Rank One Pension” (OROP) policy for ex-servicemen of defence forces has been implemented by the first respondent2 through a letter dated 7 November 2015 issued to the Chiefs of three defence forces.

OROP is defined as the payment of uniform pension to armed services personnel retiring in the same rank with the same length of service, irrespective of the date of retirement. It aims to bridge the gap between the rate of pension of current and past pensioners at periodic intervals.

On 17 February 2014, the Finance Minister announced in his Budget Speech that the Union Government had in principle accepted OROP and it would be implemented prospectively from financial year 2014-15On 10 July 2014 in his Budget Speech for the year 2014-2015, the Finance Minister reaffirmed the Union Government’s commitment to implement OROP and a further sum of Rs 1000 crores was set apart to meet the requirement.

Salient features of the OROP:

• Pension of the past pensioners would be re- fixed on the basis of pension of retirees of calendar year 2013 and the benefit will be effective with effect from 1.7.2014
• Pension will be re-fixed for all pensioners on the basis of the average of minimum and maximum pension of personnel retired in 2013 in the same rank and with the same length of service.
• Pension for these drawing above the average shall be protected. Arrears will be paid in four equal half yearly instalments.
• The above definition of OROP was also adopted by the first respondent while implementing OROP by its notification dated 14 November 2015. The rates of pension were now to be revised every five years.
• The first respondent issued a letter to the Chiefs of the three defence forces on 3 February 2016 regarding the implementation of OROP.
• Personnel who opt to get discharged henceforth on their own request under Rule 13(3)1(i)(b), Rules 13(3)1(iv) or Rule 16B of the Army Rule 1954 or equivalent Navy or Air Force Rules will not be entitled to the benefits of OROP
• Arrears will be paid in four half-yearly instalments. However, all the family pensioners including those in receipt of Special/Liberalized family pension and Gallantry award winners shall be paid arrears in one instalment
• Implementation of this new definition of OROP defeats the very principle of OPOP by creating a class within a class of the same officers, which in practice tantamount to one rank different pensions
• Another fallacy in the new definition of OROP which detracts from the principle of OROP is Pension Equalization every five years would result in the grave disadvantage to the past retirees

ISSUE RAISED

Whether the revision of the definition of OROP and its implementation in the present form, is arbitrary and violative of Articles 14 and 21 of the Constitution or not?

JUDGMENT

The Apex Court had held that theyfind no constitutional infirmity in the OROP principle as defined by the communication dated 7 November 2015 for the following reasons:

The definition of OROP is uniformly applicable to all the pensioners irrespective of the date of retirement. It is not the case of the petitioners that the pension is reviewed ‘automatically’ to a class of the pensioners and ‘periodically’ to another class of the pensioners

The cut-off date is used only for the purpose of determining the base salary for the calculation of pension. While for those who retired after 2014, the last drawn salary is used to calculate pension, for those who retired prior to 2013, the average salary drawn in 2013 is used.

While no legal or constitutional mandate of OROP can be read into the decisions in D S Nakara v. Union of India (1983) and Union of India v. SPS Vains (2008), varying pension payable to officers of the same rank retiring before and after 1 July 2014 either due to MACP or the different base salary used for the calculation of pension cannot be held arbitrary; and

Since the OROP definition is not arbitrary, it is not necessary for us to undertake the exercise of determining if the financial implications of the scheme are negligible or enormous

The SC had accordingly order and direct that in terms of the communication dated 7 November 2015, a re-fixation exercise shall be carried out from 1 July 2019, upon the expiry of five years. Arrears payable to all eligible pensioners of the armed forces shall be computed and paid over accordingly within a period of three months and held that the petition is disposed in above terms.