OROP : Supreme Court Reserves Judgement In Ex-Servicemen's Plea For 'One Rank One Pension'; Economic Policy Be Considered With 'Caution', Says Centre

 The Supreme Court on Wednesday reserved judgment by plea filed by the Ex- Serviceman

Movement seeking implementation of the "One Rank One Pension"/ ("OROP") in the Defense Forces. The plea filed through Advocate on Record Balaji Srinivasan wherein it was averred that despite the assurance on floor of Parliament, what was being implemented is "different pensions for same rank depending on when the person retired", was heard by the bench of Justices DY Chandrachud, Surya Kant and Vikram Nath.

The petitioners had questioned the notification dated November 7, 2015, issued by the Union Government wherein while implementing OROP, it had adopted a modified definition of the expression under which the gap between the rates of pension of current and past pensioners were to be bridged at "periodic intervals". The petitioners seek annual revision of pension under OROP and for calculating the pension based on 2014 salary of ex-servicemen. As per 2015 notification, the periodic review of pension was fixed at five years and the pension was fixed based on 2013 salaries.

Submission Of Counsels

We Have Not Discriminated Any Of The Retirees In Any Form; Heart Of Policy Maker Is As Wide As Citizen But When We Work At The Table & Ultimately Arrive At Policy, Concerns Are Always Baring: ASG Venkataraman

Additional Solicitor General Venkataraman commenced his submissions by drawing the court's attention to the affidavit filed by the Union in response to the questions posed by the bench on the last date of hearing.

With regards to the then Finance Minister's (P Chidambaram) speech which was made on February 17, 2014, ASG submitted that the Finance Minister's speech wherein the Koshiyari Committee's recommendation was endorsed was not based on any decision or recommendation by the then Union Cabinet. On the aspect of petitioner's contention that one should go only by the same rank and not the same

length of service and still grant or extend OROP benefits, ASG while referring to the affidavit submitted that the threshold condition to qualify for MACP is completion of the required length of service.

Further, ASG said that for the purpose of computation of OROP, the Union has taken Modified Assured Career Progression(MACP) as the base and has applied it across the board for all the retirees having the same length of service.

"When we took it as 2013, we have benchmarked. Everything has been formulated. Any assumption of disparity betweenw ACP & MACP era, non ACP & MACP era, doesn't exist for OROP," ASG added.

He also submitted that matching Non MACP with MACP would result in financial implication of INR 42,776.38 crores.

At this juncture, Justice Surya Kant said, "On the civilian side when we talk of after 10 years revision, pay structure also changes. The basic pay also changes. In case of annual revision of OROP, there is no change of annual basic structure. Only DR components, that'll probably merge into it. Automatically or probably as we could understand. Will it cause any financia limplications?"

 assumption of disparity between ACP & MACP era, non ACP & MACP era, doesn't exist for OROP," ASG added. He also submitted that matching Non MACP with MACP would result in financial implication of INR 42,776.38 crores.

At this juncture, Justice Surya Kant said, "On the civilian side when we talk of after 10 years revision, pay structure also changes. The basic pay also changes. In case of annual revision of OROP, there is no change of annual basic structure. Only DR components, that'll probably merge into it. Automatically or probably as we could understand. Will it cause any financial implications?"

 Responding to the question posed by the bench, ASG said, "When we take after 5 years, we take the last drawn pay which will have all the factors. It's not only arithmetical calculation of DR. But we also consider all the cumulative factors. It's not merely an aggregation of 5 years of DR. We also have to see 5 years from now. It's a commitment."

"After 5 years, there is financial impact. What is the difference between if you revise yearly & after 5 years. What will be the effect? In the case of a retiree while in service there are so many allowances attached to the post you occupy. After retirement there are certain allowances which disappear but DR or DA, that continues. Applying this principle & considering the fact that what we are talking of retirees annually whose other allowance are hardly visible, maybe that impact is

hardly visible," remarked Justice Kant.

"If we do something, that'll be walking an extra mile. Anything you create that is a fundamental aspect. Heart of a policy maker is as wide as a citizen but when we work at the table & ultimately arrive at a policy, concerns are always baring. This concern you do it for 1 year today, make it for this case but what would be its repercussions in other areas," submitted ASG in response.

By Introducing Concept Of Periodic Intervals, Period Cannot Be So Large So As To Make Concept Of OROP Illusory & In Effect Decree One Rank Different Pension; It Would Be Purile To Contend That Minutes Of Meeting Chaired By Raksha Mantri Did Not Constitute An Executive Decision Taken By The Union: Senior Counsel Huzefa Ahmadi Appearing for the petitioners, Senior Advocate Huzefa Ahmadi in his rejoinder submissions contended that application of OROP by the Center has resulted in 1 rank different pension.

"It has never been my contention that any personnel who has not been under the different length of service should get the same OROP. To suggest that this would be a financial burden if my contention is accepted- that's totally incorrect. Application by OROP by them has resulted in 1 rank different pension as even according to them the figure of 6665 was of person who had put in same years of service when compared to person who retired later after same years of service.

Therefore where does the concept of uniform pension go? That is the elephant in the room. After a period of 5 years, we will go back to 1.5 years even for the purpose of equalization. This difference will keep on escalating further," submitted the Senior Counsel. With regards to the Union's stand that the Finance Minister's speech wherein the Koshiyari Committee's recommendation was endorsed was not based on any decision or recommendation by the then Union Cabinet, Senior Counsel while referring to the documents and the executive decisions submitted that it would be purile to contend that the minutes of the meeting chaired by

the Raksha Mantri did not constitute an executive decision taken by the Union.

He further added that the hiatus which was practically of 1.5 years would only result in increasing the gaps.

"We are dealing with 2 hiatus: 1 for 5 years & other for 1.5 years. It will in practice imply a hiatus of 6.5 years. Elephant in the room is these gaps & the hiatuses will result in only increasing the gaps. Every time there will be increments, that will not be passed on. Any policy decision that you take if you call it uniform then the same should not be such that the substratum gets washed

away," Senior Counsel submitted. He further added that, "The Union has been shifting its stand right from the time when the statement was made on the floor of the house. The first statement was made by the finance minister. Then in the Budget Speech- it's made after the minister of PM & entire cabinet's approval. Mr Jaitley's speech categorically adopts the def of OROP. It's arbitrary not to factor in

MACP for the simple reason that even going by the 2015 decision, the OROP component willeschew the MACP."

"In the present scheme, the beneficiaries are senior or lower rank officers? Who are actual beneficiaries?" asked Justice Kant.

"Actual rank would go to the lower rank officers. 95%. They are the ones who have actually taken the matter. Almost 95% will be "lower rank" officers," submitted Senior Counsel in response. With regards to ASG's submission that everything that happened prior to November 7, 2015 should be ignored, Senior Counsel said, "What it comes to is, the statement that was made & executive decision, all this is to be ignored. Taste of the pudding is ultimately in the eating."

"By introducing the concept of periodic intervals, the period cannot be so large so as to make the concept of OROP illusory and in effect decree one rank different pensions. This would be the practical effect of equalizing the pension after a period of 5 years," Senior Counsel further added.

"Older soldiers when they fought didn't have the arms that the soldiers have now. Upto the 3^rd Pay Commission, this was exactly what you were giving," Senior Counsel submitted while concluding.

When OROP Was Framed Center Covered Entire Past Of 60/70 Years; Anything With Finance, Economics Has To Be Considered With "Caution":

ASG Venkataraman Responding to the submissions made by Senior Advocate Huzefa Ahmadi, ASG Venkataraman submitted that when the Union had drawn the concept of OROP in 2013, it did not want to leave anyone post-independence.

"When we drew it in 2013- we didn't want to leave anyone post-independence. Now my friend is saying you've traveled in the past. ACP, MACP everything is bridged. When we wanted the scheme to travel into the future and the policy makers instead of 10 years decided for 5 years.

Court has to understand. When we framed it we covered the entire past of 60/70 years," ASG submitted. He further added that, "To amend it through courts directions- implications of this are not known to all of us. Anything with finance, economics has to be considered with "caution". Period of 5 years is reasonable in whole affairs of things & it has financial implications."

OROP : Supreme Court Seeks Clarifications From Centre On Impact Of MACP Benefits On "One Rank One Pension" Scheme

In the plea filed by Ex- Serviceman Movement seeking implementation of the "One Rank One Pension"/ ("OROP") in the Defense Forces, the Supreme Court today sought Union's response on certain specific issues.

The bench of Justices DY Chandrachud, Surya Kant and Vikram Nath orally asked Union to

make a disclosure by way of an affidavit on the following aspects:

Number of Personnels who have been granted Modified Assured Career Progression

(MACP) as total proportion of various ranks.

Number of personnels who have been granted 1st, 2nd ACP.

Pursuant to the Finance Minister making a statement, was there any policy finalized that

was the basis for the Statement.

Financial outlay of the government, if directions are issued for factoring MACP for OROP.

Is there any specific exclusion in the policy for MACP benefits?

From Koshiyari Committee's recommendation, speech by Finance Minister dated February

17, 2014, minutes of the meeting chaired by Defense Minister dated February 26, 2014,

letter dated February 26, 2014 to the Controller General of Defense Accounts, budget

speech by Finance Minister dated July 10, 2014, which was Policy Statements and which

were within the realm of discussion.

Practical cases showing implementation of OROP and how many people have been

benefited

While the bench asked ASG to file an affidavit in this regard, Justice DY Chandrachud

remarked, "Let the government also re appreciate its decision. Because you have made a

commitment."

Comparison Which Was Made In Table Was Comparison Between Non Comparables:

ASG N Venkataraman

When the matter was called for hearing, Additional Solicitor General N Venkataraman appearing

for the Union drew court's attention to the Tabular Chart I presented by Senior Advocate Huzefa

Ahmadi wherein emphasis was laid on Veterans who retired in 2014 drawing more pension than

the veterans who retired between 1965 and 2013.

In this regard, the ASG contended that the pension payable to a Sepoy within 15 years of

qualifying service under OROP and the actual pension of the Sepoy who retired in 2014 (before

application of OROP) after 15 years of qualifying service was drawing pension in the rank of

"Naik" due to the operation of MACP.

To further substantiate his contention, he said that the pay of different sepoys varied depending

on whether the benefit of MACP Scheme had been granted to such Sepoy or not.

"You can't compare oranges and apples and make distinctions. They want MACP to be badged

with non MACP & get the same scale. Within the same rank the pay scale because of MACP may

vary but he retains the same designation. Our court has said that people may draw different

salaries but having the same rank because of MACP. Now my friend says match me with Naik for

OROP. Non MACP Sepoy and MACP Sepoy and asking them to match with MACP is claiming to

get higher," ASG added.

What It Appears Is That MACP Has Become A Barrier For Grant Of OROP; Your

Hyperbole On The Policy Presented A Much Rosier Picture Than What Is Actually Given:

SC

At this juncture, Justice Surya Kant asked, "OROP is a benefit that comes after service period

and MACP comes during service. Under MACP what is the approximate percentage who have

been granted the benefit? MACP is based on length of service. If you have a factor of 8 years, 16

years and 24 years- there will be hardly any person who will serve for 24 years."

While ASG submitted that someone qualifying for MACP & not for MACP was not the subject

matter of this writ, Justice Surya Kant said,

"It's not within the subject matter but it's important for OROP. If in the cadre of Sepoy, 80% of

them will get MACP then they will get the same OROP. What it appears is that MACP has

become a barrier for grant of OROP."

"There are also a larger number of people who will get the same MACP because of 8

years," Justice DY Chandrachud the presiding judge of the bench added.

Responding to the remarks posed by the bench, ASG submitted that the comparison which was

made in the Table was a comparison between non-comparables.

To further highlight the issue, the ASG argued that the weighted average pension could never be

compared with the actual amount being received by a defense personnel as pension fixed under

the rules applicable for retiring the pension in the normal course.

"There's no statutory definition of OROP. It's a matter of art. The fact of the matter is "there is no

statutory definition of OROP". When you've framed policy, you've given a particular definition.

The fact that you have not gone further, is it violative of Article 14? Your hyperbole on the policy

presented a much rosier picture than what is actually given," remarked Justice DY

Chandrachud.

ASG at this juncture said, "It's a policy decision & it's neither a legislation or a delegated

legislation. Minutes, statements & inter ministerial discussions do not become the force of law.

Scope of challenge of any policy is extremely narrow."

2/17/22, 8:15 AM OROP : Supreme Court Seeks Clarifications From Centre On Impact Of MACP Benefits On 'One Rank One Pension' Scheme

https://www.livelaw.in/top-stories/orop-supreme-court-clarifications-centre-impact-macp-benefits-one-rank-one-pension-192117 5/9

"Under rules of business, who had taken this decision?" asked Justice Kant.

On ASG's submission that OROP was a decision by the Union Cabinet which was translated into

the Notification dated November 7, 2015, Justice Kant asked ASG if it had the proposal which

was issued by the Defense before the Union Cabinet.

"Another thing that appears from these 2 relevant documents is what was approved in para 9

was modified in para 7. We just want to see what was there. MACP was already in existence. You

were aware of MACP when in 2015 or 2016 you issued OROP. You had full knowledge based on

mathematical data that once the MACP continues there, there would be very minute benefit to

ex-servicemen," Justice Kant further added.

Justice Kant also said that, "What they say is that by connecting OROP with MACP you have

substantially reduced the beneficiaries. There is a classification created by MACP. For Eg: one

is getting 800 & other is getting 1200 because of MACP & after they retire, the person will get

more pension. The principle of OROP gets defeated."

ASG contended that there was neither a constraint or limitation or a mandate and the evolution of

OROP had gone in a progressive way.

2/17/22, 8:15 AM OROP : Supreme Court Seeks Clarifications From Centre On Impact Of MACP Benefits On 'One Rank One Pension' Scheme

https://www.livelaw.in/top-stories/orop-supreme-court-clarifications-centre-impact-macp-benefits-one-rank-one-pension-192117 6/9

"There is no constraint or limitation nor mandate. Its evolution & has gone in progressive way.

I'll show that when you talk about higher payout- this court has reasoned that consider the

resources also. We have right now spent 50 crore on OROP also," ASG further added.

"Its your policy decision taken by you consciously. What has happened is, a persons had basic

pay of 980 & other person had basic pay of 930- for this, you have equated them. But someone

who was getting a higher pension - that equivalence you have denied," Justice Kant remarked.

On ASG's contention that the Government by OROP did not bring personnel drawing higher

OROP to the golden mean, Justice Kant said, "Law does not permit you to bring 2000 to 800.

That you could not have done."

"Its not governed by statute but a policy," replied ASG.

"By protecting those with 1200, you have done something which could've left them vulnerable.

That's like pay protection. But what you have done is that people below the mean have only been

brought up to the mean and not to the highest amount," Justice Chandrachud remarked.

Application Of Cut Off Date Is Policy Choice; Policy Not Discriminatory Or Capricious

Within Class: ASG Venkataraman

Responding to the arguments raised by the petitioners on the applicability of calendar year of

pension, ASG while laying emphasis on the principles of cut of date submitted,

"Court's have tested cut of date on principle- on the cut of date, have you done any

discrimination? We have not done that."

ASG to substantiate his contention referred to the judgements in Union of India v Dinesh. D.S.

Nakara & Others vs Union Of India 1983 AIR 130, Union of India v Parameshwar, SP Gupta

v. President of India and Ors AIR 1982 SC 149.

Even Their Policy Decision Says "Periodic Interval" & They Don't Say That MACP Will

Be Eschewed From OROP; Benefits Of The MACP Scheme Will Not Be Factored In While

Considering OROP. Where Is It In The Scheme? Senior Advocate Huzefa Ahmadi

Senior Advocate Huzefa Ahmadi commenced his rejoinder submissions by contending that

sum total of ASG's submissions was that the Union did not intend to give OROP but would be

giving one rank different pension.

"The question is whether it is contrary to the policy decision which they've given. I don't dispute

the proposition which they've cited. If you are taking away from impinging the concept, the

headline is OROP. My friend said that we could have given after 10 years also & not 5 years

also, is it even OROP?," Ahmadi added.

Emphasizing on the speech made by the Minister, Senior Counsel said, "What is the morality of

the statement solemnly made by the Minister on the floor of the house? We sleep under the

blanket of protection that these officers provide. OROP does not mean different pension for the

same rank & not a periodic pension- the minister said."

He also questioned whether the benefits of MACP would not be factored in while considering

OROP was there in the scheme or not.

"Even their policy decision says "periodic interval" & they don't say that MACP will be

eschewed from OROP. Benefits of the MACP scheme will not be factored in while considering

OROP. Where is it in the scheme?," Ahmadi added.

"Within the same rank, you have people whose emoluments are bound to be different for a variety

of reasons. Incentive payments which are given, there is not absolute equality. When you

equalize, what are you going to equalize? Pension is a function of salary & salary by very nature

is same but salary in actual service can never be the same. When you're equalizing pension, its

basis of policy. Emoluments are never equal. What do you take for equalization of pension?

These are some of the issues," Justice DY Chandrachud remarked at this juncture.

2/17/22, 8:15 AM OROP : Supreme Court Seeks Clarifications From Centre On Impact Of MACP Benefits On 'One Rank One Pension' Scheme

https://www.livelaw.in/top-stories/orop-supreme-court-clarifications-centre-impact-macp-benefits-one-rank-one-pension-192117 8/9

"We need to understand that emoluments will vary. Someone who can be at higher rank cannot

be at higher service due to stagnation. We consider him at that place for the pension. How do we

define OROP is the point," ASG added.

At this juncture, Justice DY Chandrachud said, "How many persons have been granted MACP as

the total proportion of various ranks. We want you to make that disclosure. How may have been

granted 1st, 2nd ACP.

When the Finance Minister made a statement, is there any policy prior to that if there is any

affirmation by the Cabinet?

If we direct that MACP should also be factored in for OROP, what would be the financial outlay

of the government?

Commitments made in the floor of the house are subject to the parliament. Even budgetary

speech is not enforceable. Was there a policy prior to RM's meeting? First is the Koshiyari

Committee. Then we have 17th feb 2014, was there a policy? 3rd comes the 26 feb 2014, 4th

comes the letter to CGDA for prospective implementation. 5th is the budget speech & 6th is

implementation of once the modalities are fixed. We want you to tell us, which were these policy

statements & which were within the realm of discussion?"

"Let the government also re-appreciate its decision. Because you have made a

commitment," Justice Chandrachud remarked further.

Justice Chandrachud also asked ASG to also include in the affidavit the aspect as to whether

there is any specific exclusion in its policy for MACP benefits.

"I can prove conclusively that it was not," submitted the Senior Counsel.

"But we have to hear from them. We cannot issue a mandamus to implement a statement made in

the Parliament. If we start breaching this, we'll be turning the 70 years law," remarked Justice

Chandrachud.

ASG at this juncture sought Court's permission to file the affidavit till February 23, 2022 to

which the bench agreed and accordingly the hearing was adjourned to February 23, 2022.

MINUTES OF THE OROP CASE HEARING TAKEN PLACE IN HSC ON 16/02/2022

ASG Venkataraman: they have raised 3 contentions
1. they say it should be automatic, not periodical
2. review once in 5 years is not acceptable
3. third is a chart which i will now show 

ASG : The chart shows that you should take the scale and not go by the mean.

DYC, J : you've taken the mean but no one is brought down

ASG agrees 

ASG is referring to a tabular chart in which he says a comparison had been made between sepoys who retired after 2015 and before 2015 

Nath J : suppose someone retired in 1990 and ACP came in 2006, rank will remain but he will get a different scale of pay because yours is a twin condition : same rank and same service 

ASG : my friends are comparing MACP with non-MACP

DYC, J : according to them you're giving MACP retrospectively since 2006 but you say mathematical equality is not possible

ASG: yes 

Nath J : so your OROP will not apply to soldiers ehi retired after 2014?

ASG : upto a grade. I will take instructions on this particular point

Nath J : notifications says it applies to employees retiring after 1/7/2014 

Nath J : you said same rank and same length of service. Now same length of service at same rank or at different levels ?

ASG: this is a very valid question. Two MACP sepoys will get same but not a Non-MACP sepoy 

Kant : OROP is a benefit that comes after service period and MACP comes during service..We want to know how many persons have gotten MACP. You are saying persons who have MACP are a different specific class 

ASG : who has qualified and who hasn't qualified for MACP is not the subject matter of the writ

Kant J : but it is important for OROP. If 80% sepoys get MACP, then will they get OROP. It seems MACP is a barrier for OROP 

ASG reads from reply affidavit .
"... Comparison in table is between non-comparables... "
" There are 5 factors we have taken to show they must be equal in all 5 paraneters"

DYC J : we have to deal with the fact that there is no statutory definition of OROP 

DYC J : their contention is regarding the discrepancy between parliamentary discussion and policy which ultimately came. The question is whether that amounts to violation of Article 14. You should have gone further. 

DYC J : "Your hyperbole on the policy presented a much rosier pic than what is actually given "

#OROP 

Kant J : ASG , under your rules of business, who is the competent authority who has taken this decision

ASG: it's a decision taken by union cabinet which resulted in the notification

DYC J : and it is approved by cabinet?

ASG: yes 

Kant J : you were fully aware that MACP existed when you issued the notification. You had all the data so you knew that there would be a very minute benefit to ex-servicemen 

DYC J : as I said OROP is not a statutory term, it is a term of art

ASG : yes, it is a term of art which we have defined with nuance and without any arbitrariness 

Kant J : what they are saying is that by connecting OROP with MACP you have reduced the benefits substantially. The principle of OROP gets defeated

ASG : if there is a serviceman who has MACP and one who didn't, both fall under OROP 

ASG : there is no constraint, limitation, mandate. This is a progressive way and maybe 5 years later we will re formulate.... We have already spent more than 50,000 cr rs.

Kant J : your statement is one rank one pension. Is there anything wrong in translating that into policy? 

DYC J : you could not have brought down people above the mean. You have protected them. But what you have done is that people below the mean have only been brought up to the mean and not to the highest amount. 

ASG says he will read from judgements to deal with the contention if the petitioners that pension should be calculated based on 2014 salaries and not 2013 salaries 

ASG: the petitioners assumption that all of us decided internally to apply the case of SPS Vains v UoI is both factually and legally incorrect.... That case dealt with different circumstances 

ASG refers to the Nakara case

DYC J : actually Nakara has now been substantially explained in a large number of cases. Nakara was a liberalisation of an existing scheme and not a new scheme. When there is a new scheme, this court has said Nakara has no application 

Kant J : the first figure you should have brought on record was that when MACP was introduced how many got benefit of the scheme and how many are eligible to get benefit of OROP.

ASG: we have submitted comprehensive affidavit with defense budget, amounts allocated to everything 

ASG also referred to the judgement of the SC in Krishna Kumar's case. He spoke of the difference between legal obligation and moral obligation as per that judgement 

ASG continues reading from a compilation of judgements that was handed over to the bench 

ASG now refers to SP Gupta's case. He mentions that the judgement says confidentiality applies to, among others, minutes leading upto policy making. 

Kant J : do you think in today's context you want to deprive us of the decision making process. How can you claim confidentiality of documents your clerks, assistants, etc have seen?

ASG : if your lordships ask us to, we will certainly give it. 

DYC J : your point is discussion is not reflective of policy that is made. This judgement will not help you there 

ASG now refers to judgements regarding areas where judicial review is not applicable 

ASG reads from a judgement to make the point that a comment made by a politician even on the floor of the parliament is not binding unless it is reflected in the policy. 

ASG sums up contentions of petitioners and the Centre's responses regarding cut off date, period of review
ASG : Our humble submission is that this is not arbitrary or discriminatory at all. 

Sr Adv. Huzefa Ahmadi (for the petitioners) : the sum and substance of their arguments is that they are not inclined to give OROP but they will give one rank different pensions. 

Ahmadi : the headline is OROP. My friend said it could have been given at 10 years but they chose 5 years.
Ahmadi: what is the morality of a statement made by a minister on the floor of the house.
Ahmade: where in their policy decision does it say MACP will be eschewed from OROP 

DYC J : we want you to disclose 3 things
1.the percentage of beneficiaries of MACP
2. When finance minister made the comments on the floor of the house, was there a policy finalised that was the basis for it.
3. What is the financial burden 

DYC J : I will add a fourth. Is there any specific exclusion on MACP in the policy. Take instructions. You've made a commitment.

ASG : by monday my Lord

Ahmadi : they can't go beyond their policy now my Lord.

DYC : they should say if there was exclusion in decision on 7 nov 

Ahmadi : I can prove conclusively that it was not

DYC J : but we have to hear from them. We cannot issue a mandamus to implement a statement made in Parliament. We will be turning 70 years of legal precedents if we do that 

DYC J : we will come back after lunch.
ASG : I have some time constraints at 2. May I be excused and please could you give time till next Wednesday to submit documents.
DYC J : we will dictate a short order to that effect

Court will resume at 2pm