The Supreme Court on Monday agreed with the Union government that payment of Rs 28,000 crore towards ‘One-Rank-One-Pension’ (OROP) arrears for nearly 21 lakh ex-servicemen at one go could impact defence preparedness and allowed staggered payment of arrears with the last instalment payable by February 28, 2024.
The widows and gallantry award winners would receive their arrears by March 31, followed by those above 70 years by June 30 and the rest in three instalments by September and December 2023, and February 28, 2024.
After pulling up the defence secretary for issuing a letter on January 20 for instalment-based payment of OROP arrears and terming it an attempt to overreach the SC judgement directing payment of arrears by March 15, a bench of Chief Justice DY Chandrachud and Justices PS Narasimha and JB Pardiwala saw reason behind the Centre’s decision for staggered payment of the arrears, which are due since 2019.
When pensioners’ counsel Huzefa A Ahmadi asked “why is it the last priority of the government to pay full arrears as per its own OROP policy”, attorney general R Venkataramani handed over the communication between the defence and finance ministries over release of Rs 28,000 crore towards OROP arrears and the finance ministry’s inability to provision such a huge amount at the end of the 2022-23 financial year.The CJI-led bench said, “If we ask the Centre to pay the arrears by March 31 and it says it does not have the money, what can be done? It is a staggering Rs 28,000 crore. We were upset with the earlier letter. But we cannot lose sight of national interest.”
The AG informed the court that there are 25 lakh ex-servicemen drawing pension. “All regular pensions are paid to them timely. It is only the question of arrears. Of the 25 lakh ex-servicemen, 4 lakh are ineligible for arrears as they are receiving higher pension; six lakh are in the category of family pension (widows) and gallantry award winners, four lakh are above 70 years-old; and 10-11 lakh are regular pensioners.”
Accepting the categorisation, the bench said widows and gallantry award winners will receive their entire OROP arrears by March 31; those ex-servicemen above 70-years of age would receive either in one go or in instalments their entire arrears by June 30 (Centre had suggested July 31); and the rest 10-11 lakh ex-servicemen would receive their OROP arrears in three instalments - August 31, November 30 and February 28 (Centre had suggested September 30, December 31 and March 31).
In an important clarification, the AG said the delay in payment of OROP arrears would not impact the next exercise for equalisation of pension under OROP scheme. Ahmadi also demanded that the government pay interest on the arrears because of delay, but the SC declined to pass orders in this regard.
In its affidavit, the Centre told the SC that of the total defence budget outlay of Rs 5.85 lakh crore for 2022-23, Rs 1.32 lakh crore was planned expenditure towards payment of regular pension to 25 lakh ex-servicemen. Of this, Rs 1.2 lakh crore have already been spent by February 28 this year.
This crunch at the end of the financial year coupled with the finance ministry's inability to provide more funds convinced the court to allow the government to categorise the ex-servicemen different groups and make instalment-based payments.
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