In a relief for the Centre, the Supreme Court today upheld the manner in which the government had introduced the "One Rank One Pension" scheme in defence forces as per its notification dated November 7, 2015.
"We find no constitutional infirmity in the principle OROP adopted," the court said, adding that there's no legal mandate that pensioners who hold the same rank must be given the same pension.
The Centre had argued that the same rank alone cannot be the criteria for the same pension and that the length of service also needs to be considered.
OROP is short for "One Rank One Pension", which aims at pension uniformity for armed forces personnel retiring at the same rank with the same length of service.
"The government has taken a policy decision. Such a decision lies within the ambit of policymaking powers of the government," the court said. A bench headed by Justice DY Chandrachud read out its verdict.
The court directed that the pending re-fixation exercise of OROP, which has not been done due to pendency of the matter before the court after the expiry of five years, should be carried out from July 1, 2019, and arrears be paid to the pensioners in three months.
The top court disposed of a plea filed by the Indian Ex-Servicemen Movement seeking implementation of the 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.
The plea stated that despite the assurance on the floor of the parliament, what is being implemented is different pensions for the same rank depending on when the person retired.
The petitioner wanted OROP to be automatically revised every year, instead of the current policy of a periodic review once in five years. They said veterans who retired in 2014 are drawing more pension than those who retired between 1965 and 2013, which defeats the purpose of OROP.
The government had said that while framing OROP, it did not discriminate between defence personnel who are in the same rank with the same length of service but the petitioners are seeking OROP on merely the same rank, overlooking the same length of service.
The centre also sought to counter the contention of petitioners for "automatic" revision of OROP saying that such dynamic calculations were "unheard of" in practice.
The centre had attributed the difference in pension to a process called Modified Assured Career Progression, or MACP, which provides salary hikes for those who have not been promoted for decades.
The petitioner argued that by connecting OROP with MACP, the government has reduced benefits substantially and the principle of OROP has been defeated.
The centre had blamed discrepancies in the "One Rank One Pension" policy on former Finance Minister P Chidambaram, who it said made a statement in parliament in 2014 on OROP without any recommendation by the then Union cabinet.
The centre's reply in the Supreme Court had come days after the court questioned discrepancies between parliamentary discussion on OROP in 2014 versus the actual policy in 2015.
"The statement on in-principle approval of OROP for defence services was made by then Finance Minister P Chidambaram on February 17, 2014, without any recommendation by the then Union cabinet," the centre told the Supreme Court.
"On the other hand, the cabinet secretariat conveyed the approval of the Prime Minister in terms of Rules 12 of the Government of India (Transaction of Business Rules) 1961 on November 7, 2015," it said.