Supreme Court Upholds OROP Policy: No Constitutional Issues Found, Directs Pension Re-fixation and Arrears Payment.

The SC upheld the OROP policy as defined by the Union Government's 2015 communication, finding no constitutional infirmity. The policy applies uniformly to all pensioners, with pensions based on the average salary of 2013 retirees. The Court directed a re-fixation exercise from 1 July 2019, with arrears payable within three months, disposing of the petition.

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Issues Involved:
1. Concept and genesis of OROP.
2. Plea of Discrimination.
3. ACP-MACP.
4. Financial Implications.
5. Average to Maximum.
6. Periodic revision every five years.

Detailed Analysis:

Concept and Genesis of OROP
The judgment outlines the historical background and evolution of the One Rank One Pension (OROP) policy. The Koshyari Committee Report defined OROP as a uniform pension for armed forces personnel retiring in the same rank with the same length of service, irrespective of their date of retirement. The principle included automatic passing of future enhancements in pension rates to past pensioners. However, the implementation of OROP by the Union Government, as communicated on 7 November 2015, introduced the concept of revising pensions at periodic intervals rather than automatically. This communication also specified the date of implementation as 1 July 2014 and mentioned that pensions would be re-fixed every five years.

Plea of Discrimination
The Petitioners argued that the fixation of pension based on the calendar year 2013 would result in pre-2014 retirees receiving less pension than those retiring after 2014. They also contended that fixing the pension based on the mean of minimum and maximum pensions of 2013 would lead to different pensions for the same ranks and lengths of service. The Union Government explained that the disparities were due to the Modified Assured Career Progression (MACP) scheme and other factors like promotions and disciplinary proceedings.

ACP-MACP
The judgment clarifies that the MACP scheme, implemented from 1 January 2006, replaced the earlier ACP scheme and provided upgradations at 8, 16, and 24 years of service. The Union Government stated that for computing OROP, MACP was taken as the base and applied across the board for all retirees with the same length of service. This ensured that the core value of uniform pension for personnel retiring in the same rank with the same length of service was maintained without disparity.

Financial Implications
The Union Government highlighted the significant financial implications of implementing OROP. At the time of implementation, the annual financial implication was Rs. 7,123.38 crores, with arrears amounting to Rs. 10,392.35 crores for the period from 1 July 2014 to 31 December 2015. If non-MACP personnel were to be matched with MACP personnel, the total financial outflow from 2014 would be Rs. 42,776.38 crores.

Average to Maximum
The CGDA working committee considered four options for OROP in 2013, including one based on the maximum pension of current retirees. The financial implication of this option was Rs. 14,898.34 crores per annum, with total arrears amounting to Rs. 1,45,339.34 crores. The Union Government opted for the average pension of 2013 retirees to balance financial viability and fairness.

Periodic Revision Every Five Years
The Petitioners argued for automatic revision of OROP, but the Union Government submitted that automatic revision would be impractical. The Court held that the expression "automatically passed on" meant that future enhancements in pension rates would be passed on without administrative impediments, not that revisions would occur continuously. The decision to revise pensions every five years was within the ambit of policy choices and did not violate Article 14.

Conclusion
The Court found no constitutional infirmity in the OROP policy as defined by the communication dated 7 November 2015. The policy was uniformly applicable to all pensioners, and the decision to use the average salary of 2013 retirees for calculating pensions was within the Union Government's policy choices. The Court directed that a re-fixation exercise be carried out from 1 July 2019, with arrears payable to all eligible pensioners within three months. The petition was disposed of accordingly.

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