No constitutional infirmity in One Rank One Pension Policy of Defence Forces: Top Court says Central Govt’s decision to revise pension every five years does not violate precepts underlying Article 14 of Constitution

Read Judgment: Indian Ex Servicemen Movement & Ors. V. Union of India & Ors. 

Pankaj Bajpai

New Delhi, March 21, 2022: Finding that Indian Ex Servicemen (petitioners’) grievance stemmed from the belief that an assurance made by State functionaries, the Ministers of the Union Government, did not translate into a conscious policy decision, which was embodied in the communication dated November 7, 2015, the Supreme Court has ruled that “One Rank One Pension” (OROP) is a matter of policy and hence the doctrine of legitimate expectations can be invoked if a representation made by a public body leads an individual to believe that they would be a recipient of a substantive benefit 

Noticing that the expression “automatically passed on” immediately follows upon the words “any future enhancement in the rates of pension” in the OROP suggested by the Koshyari Committee Report was clearly not linked to a time period for the revision of pensions, and it signifies that the rates of pension would be passed on to past pensioners without any administrative impediments, the Larger Bench of Justice Dr. D.Y Chandrachud, Justice Surya Kant and Justice Vikram Nath observed that expression ‘automatically passed on’ cannot be construed as a commitment with reference to any period of time for the computation of benefits. 

The manner in which and the period over which revisions should take place of pensions, salaries and other financial benefits is a pure question of policy, and therefore, the decision of the Central Government to revise the pension every five years cannot be held to violate the precepts underlying Article 14. 

The observation came pursuant to a petition seeking to challenge the manner in which the OROP policy for ex-servicemen of defence forces has been implemented by the Union Government (first respondent) through a letter dated Nov 07, 2015 issued to the Chiefs of three defence forces. The letter defines OROP 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. OROP, in terms of the letter, aims to bridge the gap between the rate of pension of current and past pensioners at periodic intervals.

The petitioners contend that in the course of implementation, the principle of OROP has been replaced by ‘one rank multiple pensions’ for persons with the same length of service. The petitioners contend that the initial definition of OROP was altered by the first respondent and, instead of an automatic revision of the rates of pension, the revision now would take place at periodic intervals. The petitioners submit that the deviation from the principle of automatic revision of rates of pension, where any future enhancement to the rates of pension are automatically passed on to the past pensioners, is arbitrary and unconstitutional under Articles 14 and 21 of the Constitution. 

After considering the submissions, the Larger Bench found according to the report of the Koshyari Committee, that 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”. 

The concept, according to the report implied “bridging the gap between the rate of pension of the current pensioners and the past pensioners”, and this understanding of the concept of OROP in the Koshyari Committee Report was based on the norm that hierarchy in the armed forces comprises of two elements namely rank and length of service, added the Bench.

The Larger Bench further observed that ranks are conferred by the President and signify command, control and responsibility, and ranks are allowed to be retained even after retirement. 

Hence OROP, according to the Koshyari Committee postulates 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, added the Bench. 

The Apex Court highlighted that the Koshyari Committee Report is a report submitted to the Rajya Sabha by the Committee on Petitions, and this report cannot be enforced as a statement of government 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, added the Court. 

Highlighting that while a decision to implement OROP was taken in principle, the modalities for implementation were yet to be chalked out, the Top Court said that there was no conscious policy decision on the part of the Union Government on the modalities for implementing OROP until the communication dated Nov 07, 2015 came into being, and thus, the communication of November 7, 2015 cannot be invalidated on the ground that it infringed the ‘original understanding’ of OROP.

“The statement made by the Union Minister of Finance in the Lok Sabha on 17 February 2014 propounded in principle the decision to implement OROP. At the meeting chaired by the Defence Minister on 26 February 2014, it was again envisaged that “any future enhancement in the rates of pension to be automatically passed on to the past pensioners”. The reply furnished in writing by the Minister of State for Defence to a Member of the Rajya Sabha also similarly indicates that “future enhancement in the rate of pension to be automatically passed on to the past pensioners”. The legislative and other material prior to 7 November 2015 proposed that future enhancements in the rates of pension would be automatically passed on. The expression “automatically” was clearly not linked to a time period for the revision of pensions. None of the documents on the record prior to the communication dated 7 November 2015 suggests that the process of revising pensions was to be continued on an ongoing basis as opposed to revision at periodic intervals”, added the Court. 

Speaking for the Bench, Justice Chandrachud observed that in making policy choices, the Union Government is entitled to take into account priorities towards modernization of the armed forces and to modulate the grant of financial benefits so as to sub-serve and balance distinct priorities. 

The Apex Court accordingly directed that in terms of the communication dated November 7, 2015, a re-fixation exercise should be carried out from July 1, 2019, upon the expiry of five years, and arrears payable to all eligible pensioners of the armed forces should be computed and paid over accordingly within a period of three months.