MC Explains: What is OROP? Why is SC fixing timelines for payments?

Representative image.

A year after India’s Supreme Court upheld the validity of the One Rank One Pension (OROP) scheme for the armed forces in March 2022, the case still appears in its cause list because the Union government sought additional time to pay the arrears.

Initially, the Supreme Court asked the government to clear all the dues in three months from March 2022. However, the government has so far sought three extensions. Since the Supreme Court’s order mandated a timeline for the payment of arrears, the court continues to monitor it.

On March 20, 2023, the Supreme Court set new dates for clearing the OROP dues to the armed forces veterans and family pensioners. A bench led by Chief Justice of India DY Chandrachud directed the government to disburse the pension in the following manner:

-  Family pensioners and gallantry award winners to be paid their pension in a single instalment on or before April 30, 2023.

- Veterans aged above 70 to be paid their entire dues in one or more instalments by June 30, 2023.

- Remaining pensioners to be paid in three equal instalments by February 28, 2024.

The bench clarified that payment of OROP dues till 2024 will not affect further equalisation of pension of ex-servicemen next year.

Moneycontrol explains the journey of the OROP litigation in the Supreme Court and when the government was pulled up for delays in disbursing the pension.

Though there was a demand for OROP for the armed forces for quite some time, it gained prominence after nationwide protests by veterans in 2009.

In response to the protests, which highlighted growing pay-pension asymmetries, the UPA government appointed a parliamentary committee in 2011, which found merit in the veterans’ demands. The NDA government announced in 2015 it would implement the OROP scheme.

According to the communication sent to the chiefs of the armed forces, OROP envisages 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.

Armed forces veterans challenged OROP, alleging that in the course of implementation, the principle of OROP was replaced by ‘one rank multiple pensions’ for those with the same length of service. They contended that the initial definition of OROP was altered by the government and instead of an automatic revision of the rates of pension, the new definition contemplates that the revision would take place at periodic intervals.

The veterans alleged that the deviation from the principle of automatic revision of rates of pension, where future enhancements to the rates of pension are automatically passed on to past pensioners, was arbitrary and unconstitutional.

In March 2022, the Supreme Court upheld the validity of the OROP scheme and held that:

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

2)     OROP is not arbitrary.

3)     Since the definition of OROP is not arbitrary, it is not necessary for the court to determine if the financial implications of the scheme are negligible or enormous.

4)     The court further directed that arrears payable to all eligible pensioners of the armed forces be computed and paid within three months of the judgment.

The defence ministry sought three extensions for payment of the arrears prior to the Supreme Court fixing a timeline. Since the deadline set by the court expired in June 2022, the ministry sought an extension of time to make payments.

a)     The first application was filed in June 2022. After hearing the application, the Supreme Court on September 16, 2022, granted an additional three months to pay the arrears.

b)     The second application for extension was filed in December 2022, seeking an additional three months to clear the dues. On January 9, 2023, the Supreme Court granted time till March 15, 2023, to clear the dues.

On February 27, it was brought to the notice of the Supreme Court that the ministry of defence had issued a communication on January 20 that the arrears would be paid in four yearly instalments as opposed to a single payment as directed by the court.

The court took a very strong view of this communication, which was against its orders and was sent without getting its prior permission. The court sought an explanation from the secretary concerned for issuing the communication extending the timeline for payments fixed by the court.

A bench headed by CJI Chandrachud asked the ministry to "set its house in order" and directed the secretary to file a personal affidavit explaining his position.

"Now in the face of our orders of January 9, how can you issue a communication that you will pay the amount in four equal instalments? Why shouldn't we proceed against your secretary?” the bench asked. "You tell your secretary that we are going to take action against him for issuing that communication. The sanctity of the judicial process has to be maintained. Either the secretary withdraws it, or we are going to issue a contempt notice to the Ministry of Defence and that will be very serious."

After the warning from the Supreme Court, the government filed documents to demonstrate its inability to pay all the arrears in one go and requested the court to permit phase-wise payments.

At the March 20 hearing, Attorney General R Venkataramani sought to rely on certain documents in a sealed cover. CJI Chandrachud refused to accept the documents in a sealed cover and asked the Attorney General to read out his contention in the court.

On hearing the Attorney General, the court granted the government time till February 28, 2024, to clear all the dues.