What is 'One Rank One Pension' (OROP) and is it Constitutionally Valid?

 

INTRODUCTION

 

Today, I will talk about the case of Indian Ex-Servicemen Movement & Others v. Union of India & Others, 2022 SCC OnLine SC 333, wherein the Hon’ble Supreme Court discussed the concept of OROP (One Rank One Pension) and its legal validity.

 

BASIC PRINCIPLES OF LAW OF PENSION

 

Before adverting any further, it would be apposite to understand the basic principles relating to pension: -

 

1. The computation of pension of the pensioners who form a homogenous class is done on the basis of the same formula. Whether one retired later or earlier, does not affect the application of the concerned formula.

 

2. Any amendments in the Pension Scheme are prospectively applied and such benefit is to be granted evenly to a homogenous class of pensioners irrespective of the date of retirement.

 

3. All retirees retiring with a particular rank may not always form a single class. If one group in the same Rank is receiving higher emoluments as on the date of retirement due to difference in pay scales for whatsoever reasons, the group getting lesser emoluments cannot contend that their pension should be identical. Thus, “pensioners who retire with the same rank need not be given identical pension.”

 

4. It is the prerogative of the employer to validly fix a cut-off date for introducing any pension scheme or for discontinuing any existing scheme. Such cut-off cannot be arbitrarily fixed dividing a single homogenous class of pensioners into two groups and afterwards, subjecting them to a different treatment.

 

MEANING OF OROP

 

Keeping this mind, let us understand the meaning of ‘OROP’. According to the Koshyari Committee Report that was submitted to the Rajya Sabha in the year 2015, OROP implies that a “uniform pension be paid to the armed forces personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancements in the rate of pension to be automatically passed on to the past pensioners.”

 

PURPOSE OF OROP

 

The purpose of introducing the concept of OROP was to bridge the gap between the rate of pension of the current pensioners and the past pensioners. But why is it important to bridge the gap? In order to answer this question, we need to understand that the general hierarchy in the Armed Forces has two elements, Rank and Length of Service. All the Ranks are conferred by the President of India and signify command, control and responsibility. Such ranks are allowed to be retained even after retirement and unlike other governmental or civilian employees who retire by age, the armed forces personnel retire by rank. Therefore, it has been postulated that “two personnel from the armed forces in the same rank and with the equal length of service should get the same pension irrespective of their dates of retirement and any future enhancement in the rates of pension must be automatically passed on to past pensioners.”

 

SALIENT FEATURES OF OROP

 

The OROP is not a new concept. It was already in place till the year 1973 until the Third Central Pay Commission decided otherwise. However, after extensive deliberations by successive governments, the Union Government, in the year 2016, again adopted the policy of One Rank One Pension Scheme (OROP). Its salient features are as follows: -

 

1. The benefits of OROP Scheme will be effective from 01.07.2014 in respect of all the concerned employees and will be prospectively applicable. The date of retirement would not affect any pensioner and review of pension would be conducted in a uniform manner for all classes of pensioners.

 

2. The pension of the past pensioners would be refixed on the basis of the pension of the retirees of Calendar Year 2013. Pension for those drawing above the average of 2013 shall be protected and calculated accordingly.

 

3. All armed forces pensioners would be covered under this scheme. However, it is not required that pensioners who held the same rank must be given the same amount of pension since pensioners holding the same rank may not for all purposes form a homogenous class due to differing service law related rules and regulations applicable on them.

 

4. In future, the pension would be refixed after every five years.

 

HELD BY THE SUPREME COURT

 

This new Policy of One Rank One Pension of the Union Government was challenged before the Supreme Court on inter alia the ground that personnel of the same Rank are not receiving identical pension amount. In this regard, the Court held that: -

 

a. The definition of OROP fixed by the Government is not arbitrary, and it is uniformly applicable to all the pensioners irrespective of the date of retirement.

 

b. The cut-off date of 01.07.2014 applying the OROP Scheme is used only for the purposes of determining the base salary for the calculation of pension.

 

c. The policy decision of the Government to enhance the base salary for calculation of pension is a decision that validly lies within the ambit of policy choices that the Government chooses to exercise.

 

d. It is not legally required that pensioners who hold the same rank must be given the same amount of pension. Only the computation of pension of the pensioners who form a homogenous class is done on the basis of the same formula and that has been done so.

 

e. The Koshyari Committee Report is a report submitted to the Rajya Sabha and cannot be enforced in toto as a statement of government policy.

 

SUMMARY AND CONCLUSION

 

Therefore, the Hon’ble Supreme Court upheld the legal and the constitutional validity of the One Rank One Pension Scheme (OROP). In conclusion, following important points emerge with respect to the OROP: -

 

1. Uniform pension is to be paid to personnel retiring in the same rank with same length of service irrespective of date of retirement.

 

2. Future enhancements in the rates of pension are to be passed on to past pensioners depending upon their stage, as pension of the personnel drawing salary that is above average is to be protected.

 

3. The purpose of OROP is to bridge the gap between the rates of pension of current and past pensioners.

 

4. All retirees retiring with a particular rank may not always form a single class and may not receive identical pension.

 

5. Personnel who opt to get discharged henceforth would not be entitled to the benefit of OROP.

 

For more on OROP, kindly peruse the Government Handbook on OROP that is accessible here or read the entire judgment that is available here.