The Supreme Court upheld the One Rank One Pension (OROP) principle adopted by the Centre in its 2015 communication issued to the chiefs of three defence forces saying it neither suffers from any Constitutional infirmity nor is it arbitrary.

The apex court pronounced its verdict on a plea by ex-servicemen association seeking implementation of One Rank One Pension as recommended by the Bhagat Singh Koshyari Committee with an automatic annual revision, instead of the current policy of periodic review once in five years. 

What is One Rank One Pension (OROP)?

• OROP implies that uniform pension be paid to the defence forces personnel retiring in the same rank with the same length of service, regardless of their date of retirement, to bridge the gap between the rates of pension of current and past pensioners at periodic intervals.

• This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners. 

• In armed forces, equality in service has two components, namely, rank and length of service. The importance of rank is inherent in armed forces as it has been granted by the President of India and signifies command, control and responsibility in consonance with ethos of service. These ranks are even allowed to be retained by the individual concerned after his/her retirement.

• According to the Koshyari Committee report, two armed personnel in the same rank and equal length of service should get the same pension irrespective of date of retirement and any future enhancement in rates of pension be automatically passed on to the past pensioners.

• The Modi government issued a notification on November 7, 2015 to implement One Rank One Pension for the defence force personnel with effect from July 1, 2014.

The demand for OROP

The ‘One Rank One Pension’ had been considered in the past by various committees and bodies. Some of them are:

1) K.P. Singh Dev Committee (1984): The Committee recommended that the government should consider the issue of ‘One Rank One Pension’ particularly in the light of the principle which has been already established with respect to the pension of judges of the Supreme Court and the High Courts.

2) Inter-Ministerial Committee: An Inter-Ministerial Committee was set up on February 27, 2003 by the Department of Pension and Pensioners’ Welfare to consider the demand of ‘One Rank One Pension’. The Committee, in its report submitted on September 24, 2004 did not favour grant of ‘One Rank One Pension’, but recommended grant of modified parity based on the maximum of the revised scale of pay introduced with effect from January 1, 1996 for PBOR (Personnel Below Officer Rank).

3) Rajya Sabha Petition Committee: In 2011, the Rajya Sabha Petition Committee, headed by Bhagat Singh Koshyari, in its 142nd Report stated that the government should implement ‘One Rank One Pension’ in the defence forces across the board. This report is known as Koshyari Committee report.

• On February 17, 2014, Union Finance Minister P. Chidambaram announced in his Budget Speech that the central government had in principle accepted OROP and it would be implemented prospectively from financial year 2014-15. The Finance Minister stated that an amount of Rs 500 crore has been transferred to the Defence Pension Account to meet the budgetary expense. However, OROP was not implemented at the time.

• On July 10, 2014 in his Budget Speech for the year 2014-2015, Finance Minister Arun Jaitley reaffirmed the Union government’s commitment to implement OROP and a further sum of Rs 1,000 crore was set apart to meet the requirement. 

• The government issued an order on November 7, 2015 to implement OROP. Armed Forces personnel retired up to June 30, 2014 were covered under this order.

Key points of the order:

• Pension of past pensioners would be re-fixed on the basis of pension of retirees of calendar year 2013 and the benefit will be effective from July 1, 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 same length of service.

• Arrears will be paid in four equal half yearly installments.

• Pension would be re-fixed every 5 years.

Why ex-servicemen filed case in the SC?

• According to the petitioners, the notification introduced a revised definition of OROP, where the revision between the past and current rates of pension was to take place at periodic intervals and not automatically. Also, it stated that OROP would take effect from July 1, 2014.

• They moved the Supreme Court seeking implementation of One Rank One Pension as recommended by the Bhagat Singh Koshyari Committee with an automatic annual revision, instead of the current policy of periodic review once in five years.

What are the key points of the SC verdict?

• A bench of Justices D.Y. Chandrachud, Surya Kant and Vikram Nath said that the canvass which is sought to be traversed in these proceedings under Article 32 of the Constitution trenches upon a domain which is reserved for executive policy.

• The Koshyari Committee Report can be relied upon to indicate the background of the adoption of OROP. The report furnishes the historical background, the reason for the demand, and the view of the Parliamentary Committee which proposed the adoption of OROP for personnel belonging to the armed forces. Beyond this, the Koshyari Committee Report cannot be construed as embodying a statement of governmental policy. 

• Governmental policy formulated in terms of Article 73 by the Union or Article 162 by the State has to be authoritatively gauged from the policy documents of the government, which in present case is the communication dated November 7, 2015. 

• Applying the above principles to the facts of the case, we find no Constitutional infirmity in the OROP principle as defined by the communication dated November 7, 2015, it said.

• The top court’s verdict came on the plea filed by the Indian Ex-servicemen Movement (IESM) against the Centre’s formula of OROP.

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