FACTS
On June 9, 2016, the Indian Ex-Servicemen Movement—an “All India Federation of Ex-Servicemen’s organizations”—as well as individual veterans of the Indian Army, Navy, and Air Force filed a petition under Article 32 of the Constitution with the Supreme Court to challenge the “One Rank One Pension policy” (OROP) for former members of the Defense forces. The petitioners contend that the Union of India changed the original definition of OROP to reflect the recommendations of the Koshiyari Committee report (2011) and that the pension rates are now automatically revised at regular intervals (every five years). They argue that it is unlawful to deviate from the automatic modification of pension rates, which would automatically transfer any future increases to previous pensioners.
The One Rank One Pension (OROP) scheme is a policy that took a long struggle of over 40 years by ex-servicemen to get implemented. In 1973, The Third Central Pay Commission, equated pensions of civilian and military employees, creating disparities among retired military personnel. Eventually, the government revived the OROP request in 2010-11, with the Koshyari Committee led by Bhagat Singh Koshyari defining OROP as ensuring uniform pensions and automatic future pension enhancements for past pensioners. The Finance Minister announced OROP’s acceptance in the Budget 2014-2015, and the Ministry of National Defense implemented it in November 2015.
OROP policy ensures that military personnel retiring at the same rank with the same length of service receive the same pension, regardless of their retirement date. This policy aims to eliminate variations in pensions among veterans by aligning their pension benefits. It involves periodic revisions of pension rates, currently set to be reviewed every five years.
ISSUES
- Whether the implementation of the One Rank One Policy contents violates articles 14 and 21 of the Constitution of India?
- Whether a system of periodic pension review (as opposed to automatic review) discriminate against old-army retirees?
- Whether the change in the date of implementation of the scheme is arbitrary?
CONTENTIONS
Petitioner Arguments
Petitioner: Indian Ex-Servicemen Movement.
Lawyers: Hufeza Ahmadi, Balaji Srinivasan, Arunava Mukherjee.
- The petitioners contended that the Ministry of Defence’s 2015 announcement, which put the OROP policy plan into effect as per the revised definition of OROP, The pension that was previously proposed for the retirees would be recalculated using the 2013 calendar year’s pensions, and the benefit would take effect on 1st July 2014. The pension will be recalculated using the average of the minimum and maximum pensions of employees who retired in 2013 at the same rank. Retirees whose pensions exceeded the average were retained at the same level and received their previous pensions. This resulted in disparities, as employees who retired earlier would receive a lesser pension than employees who retired later in 2013. This created a condition of inequality in the pension, it portrayed as One Rank, Multiple Pensions, therefore negating the intention of the universal pension plan.
- Furthermore, they contested that the government’s proposal was subject to the revision of pensions for old retirees only every five years, rather than having an automatic revision system which was mentioned in the Khoshyari Committee report. Hence it deviates from the legal principle of equality under article 14 of the Constitution.
- Regarding another issue, the petitioner said that the 1st of April 2024, was already scheduled for the scheme’s effective implementation. However, it was unexpectedly extended to July 1st, 2024, which caused a significant delay in the scheme’s execution.
Respondent Arguments
Respondent: Union of India; Ministry of Defence; Ministry of Finance; Controller General of Defence Accounts; Chiefs of Staff Committee.
Lawyers: N. Venkataraman.
- The respondent contended that Articles 14 and 21 of the Indian Constitution were not violated by the OROP program in its current form. The Union government said that P Chidambaram, the UPA Finance Minister, made the promise in 2014 without seeking approval from or advice from the Ministry of Defense. Discussions and remarks made prior to the 2015 notice being released cannot bind it. Furthermore, updating the definition annually is not advantageous. For this reason, the scheme is reviewed every five years, at a regular frequency. The primary goal of the program is to guarantee a certain level of consistency in the pension, which the Union Government has committed to achieving.
- Furthermore, it was said that while the petitioners are attempting to read OROP in the most favourable light, the government’s choice may only be challenged based on established legal principles. therefore the union government needs to take into account the financial and economic issues of India.
- Respondents stated that the implementation date was rescheduled from April 1, 2024, to July 1, 2024, not to cause an excessive delay, but rather to postpone the implementation date in order to raise the budget for the proper payout of pension arrears.
RATIONALE
Analysis
The pension received by defence personnel depends on several acts, such as Pension Regulations for the Army 1961, revised as PRA 2008, Pension Regulations for the Air Force 1961, and Navy Pension Regulations 1964. According to these acts, the pension for defence personnel is about 50% of their last salary or a minimum of 9000.
Inflation & changing economic standards have led to differences in pensions, primarily due to the adjustments in dearness allowance (DA) & salary revisions. Take, for example, Mr. A, who retired back in 1995. His pension is noticeably lower than Mr. B’s, who retired in 2010—even though they held similar ranks while serving. Before 1973, defence personnel received standard pension rates: officers got 50% of their salary while junior commissioned officers received 70%.
However, after 1973, administrative changes linked pensions to service tenure. This shift was a disadvantage for defense personnel who often served shorter periods compared to civilian employees. As a result of this change, many defence pensions were significantly reduced while civilian pensions increased.
To tackle this issue, the one rank, one pension (OROP) concept was introduced. It aimed to provide equal pensions for individuals with similar service tenures, no matter when they retired. Although the government accepted OROP, it took a long time for it to be implemented. This delay led to protests from veterans who were dissatisfied with the situation.
In 2015, the government announced that OROP would be put into action starting from July 2014. Yet, veterans believed it didn’t fully align with what the Koshyari Committee had initially recommended.
Supreme Court’s Judgement
Judges Bench: CJI DY Chandrachud, Justice Surya Kant and Justice Vikram Nath.
The Supreme Court observed that the One Rank One Pension (OROP) scheme was discussed during the tenure of P. Chidambaram and in the report of the Koshyari Committee. The government then decided in principle to implement the scheme. The notification was made on November 7, 2015.
Prior to this, only suggestions existed, not binding resolutions. The government stated clearly that OROP is a policy choice, not actual legislation. The announcement from November 2015 stands as the primary and ultimate decision. The Koshyari Committee’s recommendations were just the recommendation, not laws.
Further, the Supreme Court upheld the government’s decision to revise pensions every five years, stating it did not violate Article 14. The term “automatically” was interpreted to mean the method of revision, not the frequency or any specific time frame, The phrase “automatically passed on” should not be associated with time when considering benefits; instead, it reflects how pension revisions will occur. contrary to what the petitioners believed. is a clear misunderstanding in their claim that the Union Government failed to apply the scheme initially decided.
According to the court, it’s the government’s responsibility to create policies while the judiciary ensures that laws are carried out as intended. The Supreme Court highlighted that it refrains from interfering in policy decisions unless a constitutional issue arises, and also affirmed that the policy decision made in 2015 remains valid & final. It will not revisit policy choices unless they infringe on constitutional rights. Furthermore, emphasized that involving the judiciary in matters of policy could reduce the significance of both the legislative & executive branches.
The court noted that the government’s decision to change the implementation date was reasonable and aimed at ensuring sufficient budgetary allocation for pension arrears.
The Supreme Court had instructed the Union of India to settle arrears connected to the One Rank One Pension (OR) Scheme for all pensioners by 16 March 2022. There were requests for extensions, which were granted. The most recent deadline was extended to 15 March 2023. The Attorney General for India provided a compliance note, while Senior Counsel Mr Huzefa Ahmadi disagreed with any further extensions. He highlighted that the arrears have been outstanding since 2019, stating that ample time had already been provided.
It was reported to the court that approximately 25 lakh ex-armed forces pensioners are owed around Rs 28,000 crores. Meanwhile, the Ministry of Defence’s budget for 2022-2023 includes Rs 1.32 lakh crores allocated for pensions. By February 2023, they had disbursed Rs 1.2 lakh crores. The Ministry argued that fulfilling the arrears in one single payment was not financially feasible due to significant fiscal deficits and cash flow challenges.
The Union Government has proposed a phased payment plan: 4 lakh pensioners who are not eligible for OROP arrears will not receive payments. Then, it aims to pay 6 lakh family pensioners & gallantry award winners by 30 April 2023. Following that, another group of 4 lakh pensioners aged over 70 years is set to be paid by 31 July 2023. Lastly, the remaining pensioners will receive their payments in instalments by 31 March 2024. The court directed the government to stick to these deadlines & also clarified that these delayed payments won’t affect future OROP equalization efforts.
DEFECTS OF LAW
The OROP Definition Ambiguity: The Court observed that the lack of a legally precise definition for “One Rank One Pension” created ambiguity, making it challenging to understand and put into practice. This ambiguity allowed for multiple interpretations from the several parties involved, including the government and the petitioners. This led to a divergence from the petitioner’s understanding of the policy’s original purpose, which was to provide uniform pensions to military veterans with comparable ranks and lengths of service, regardless of whether they retired on different dates. Due to the absence of a clear framework, the court allowed executive discretion to govern its application, which resulted in ongoing disagreement and uneven application of the guiding principles.
Discrepancies Regarding the Cutoff Date: The petitioners were dissatisfied that the verdict failed to address the underlying disparities in the policy’s cutoff date. There have been significant changes in military pension calculations between retirees who resigned before 2014 and those who retired after 2014. Retirements made after this date benefited from the most recent revisions to wage scales, whereas pensions granted to those who retired before were based on older, less favourable scales. The fundamental principle of the discriminating cut-off point was violated, as the petitioners regarded it as promoting equal pensionary benefits throughout equal tenure concerning service.
INFERENCE
The main purpose of the OROP scheme’s adoption in the “Indian Ex-Servicemen Movement v. Union of India” case was to close the pension gap that exists between past and current retirees. A uniform pay scale is crucial in the context of justice, equality, and nationality, and the state should make sure that retired personnel receive a uniform pension.
Sonal Devare.
G J Advani Law College.