Ratio Decidendi (alone) Forms a Precedent; Not the Final Order or Conclusion

Saji Koduvath, Advocate, Kottayam

Abstract:

No Binding Precedent if relevant statutory provision was Not considered; It Must be ‘Ratio Decidendi’ also.

Ratio Decidendi Is Binding Precedent: Mere Casual Expressions – Not of Much Avail.

Ratio decidendi
               •➧ Ratio decidendi alone is the Binding Precedent.
               •➧ Ratio decidendi is statements of principles of law.
               •➧ Ratio decidendi is the vital element in the decision.
           •➧ Ratio decidendi literally means “reason for deciding”.
               •➧ Ratio decidendi is the essence, and not every observation.
               •➧ Ratio Decidendi is declaration of the law in a speaking order.
            •➧ Ratio Decidendi is the Legal Principles Guiding the Decision.
               •➧ Ratio decidendi alone binds under Article 141 of the Constitution.
              •➧ What is binding is discernable Ratio and the Principle; not, Conclusion.
              •➧ A case is only an authority for what it decides, and not from what logically follows from it.
             •➧ It is important to Read and analyse Entire Judgment, and the ratio decidendi is to be isolated.
              •➧ Words in a Judgment are Not to be Interpreted as a Statute; Words in it are Not to be Taken Literally.
              •➧ The abstract ratio decidendi (ascertained on a consideration of the judgment) alone has the force of law.
             •➧ For, the Legal Principles Guiding the Decision constitute ‘Ratio Decidendi’, it is always necessary to see what were the facts.

Precedents
              •➧ A Case is only an Authority for what it Actually Decides.
              •➧ Decision Applicable Only to Facts Cannot be a Binding Precedent.
              •➧ Binding Precedent Helps in Promoting Certainty and Consistency.
              •➧ A decision is available as a precedent only if it decides a question of law.
              •➧ An order made merely to dispose of the case cannot have the value or effect of a binding precedent.
              •➧ No Binding Precedent if a decision is without taking into account the statutory provision or if it is wrong in law.
              •➧The precedential value is attached only to orders which are preceded by a detailed judgment.

Obiter Dicta
              •➧ Obiter dictum is the passing expression or opinion in a judgement.
              •➧ The obiter dicta of the Supreme Court are taken with considerable weight.
              •➧ In India, obiter dictum of a High Court may have to be followed by the lower courts in its jurisdiction.

Per Incuriam
              •➧ ‘Per incuriam’ is used to denote findings out of ignorance of law.

Stare decisis
              •➧ Stare decisis is a legal doctrine that requires courts to follow precedents

Common law
              •Common law is the body of unwritten law, based upon precedents, the previous decisions.
              •➧ Common law delved precedents; whereas the civil law system dwelled upon codified system of law.
              •➧ The Courts in India apply the common law, especially, in the arena where there are no enacted Civil Laws to apply.

Article 141 – Supreme Court Decisions Bind on all Courts

Article 141 of the Constitution states that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. What is binding under Article 141 is the ratio decidendi of the judgment.

Decisions of High Courts bind all courts within their respective jurisdiction. But, rulings of other High Courts have only persuasive value. These principles are based on judicial discipline.

What is binding is ‘Ratio and the Principle’; not, Conclusion

Ratio decidendi literally means “reason for deciding”.

In B. Shama Rao v. Union Territory of Pondicherry, AIR 1967 SC 1480, it was observed that a decision is binding not because of its (final) conclusion but with regard to its ratio and the principle laid down therein. (Referred to in: Secunderabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC).

Stare Decisis

The Latin term, Stare decisis, means – “to stand by that which is decided.” It is accepted as a legal doctrine that requires courts to follow precedents, the previous decisions. The doctrine of stare decisis is based on public policy. The basis of Article 141 of the Constitution is the doctrine of stare decisis.

In Raj Narain Pandey v. Sant Prasad Tewari (1973 (2) SCR 835 , H.R. Khanna, J. observed as under:

“In the matter of the interpretation of a local statute, the view taken by the High Court over a number of years should normally be adhered to and not disturbed. A different view would not only introduce and element of uncertainty and confusion, it would also have the effect of unsettling transactions which might have been entered into on the faith of those decisions. The doctrine of stare decisis can be aptly invoked in such a situation. As observed by Lord Evershed M.R. in the case of Brownsea Haven Properties v. Poole Corpn., there is well established authority for the view that a decision of long standing on the basis of which many persons will in the course of time have arranged their affairs should not lightly be disturbed by a superior court not strictly bound itself by the decision.” (quoted in: Mishri Lal v. Dhirendra Nath, AIR 1999 SC 2286, 1999-4 SCC 11)

The principles of `Stare Decisis’ is explained in Halsbury’s Laws of England as under:

“Apart from any question as to the Courts being of co-ordinate jurisdiction, a decision which has been followed for a long period of time, and has been acted upon by persons in the formation of contracts or in the disposition of their property, or in the general conduct of affairs, or in legal procedure or in other ways, will generally be followed by courts of higher authority than the court establishing the rule, even though the court before whom the matter arises afterwards might not have given the same decision had the question come before it originally. But the supreme appellate Court will not shrink from overruling a decision, or series of decisions, which establish a doctrine plainly outside the statute and outside the common law, when no title and no contract will be shaken, no persons can complain, and no general course of dealing be altered by the remedy of a mistake”. (quoted in: Mishri Lal v. Dhirendra Nath, AIR 1999 SC 2286, 1999-4 SCC 11)

This doctrine is described in Corpus Juris Secundum as under:

“Under the stare decisis rule, a principle of law which has become settled by a series of decisions generally is binding on the courts and should be followed in similar cases. This rule is based on expediency and public policy, and, although generally it should be strictly adhered to by the courts, it is not universally applicable.” (quoted in: Mishri Lal v. Dhirendra Nath, AIR 1999 SC 2286, 1999-4 SCC 11)

In Mishri Lal v. Dhirendra Nath, after quoting Halsbury’s Laws of England and Corpus Juris Secundum it is pointed out as under:

“Be it noted however that Corpus Juris Secundum, adds a rider that “previous decisions should not be followed to the extent that grievous wrong may result; and, accordingly, the courts ordinarily will not adhere to a rule or principle established by previous decisions which they are convinced is erroneous. The rule of stare decisis is not so imperative or inflexible as to preclude a departure therefrom in any case, but its application must be determined in each case by the discretion of the court, and previous decisions should not be followed to the extent that error may be perpetuated and grievous wrong may result.”

No Binding Precedent if relevant statutory provision was Not considered; It Must be ‘Ratio Decidendi’ also

In Union of India v. Maniklal Banerjee, AIR 2006 SC 2844, the Apex Court has held as under:

“It is now well-settled that if a decision has been rendered without taking into account the statutory provision, the same cannot be considered to be a binding precedent. This Court, in Pritam Singh, while exercising its discretionary jurisdiction, might have refused to interfere with the decision. The same, therefore, did not constitute any binding precedent.” (Referred to in: Hameeda Begum v. Champa Bai Jain (Arun Misra, J.), ILR 2009 MP 2328; 2009-3 MPLJ 472)

The Supreme Court in Jayant Verma v. Union of India, (2018) 4 SCC 743, quoted the dissenting judgement of A.P. Sen, J. in Dalbir Singh v. State of Punjab, (1979) 3 SCC 745, with approval :

“54. This question is answered by referring to authoritative works and judgments of this Court. In Precedent in English Law by Cross and Harris (4th edn.), ‘ratio decidendi’ is described as follows: “The ratio decidendi of a case is any rule of law expressly or impliedly treated by the judge as a necessary step in reaching his conclusion, having regard to the line of reasoning adopted by him, or a necessary part of his direction to the jury.”

In State of Orissa v. Sudhansu Sekhar Misra, AIR 1968 SC 647, wherein after relying on British authorities it was held:

“13….A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein, nor what logically follows from the various observations made in it. On this topic, this is what Earl of Halsbury L.C. said in Quinn v. Leathem [[1901] AC 495]:
“Now before discussing the case of Allen v. Flood, [1898] AC 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all. It is not a profitable task to extract a sentence here and there from a judgment and to build upon it.”

The Supreme Court, in Krishena Kumar v. Union of India, 1990 (4) SCC 207, said as under::

“19. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain “propositions wider than the case itself required”. This was what Lord Selborne said in Caledonian Railway Co. v. Walker’s Trustees [(1882) 7 App Cas 259 : 46 LT 826 (HL)] and Lord Halsbury in Quinn v. Leathem [1901 AC 495, 502 : 17 TLR 749 (HL)]. Sir Frederick Pollock has also said :
“Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision.”

Binding Precedent- In Nutshell

No Binding Precedent if relevant STATUTORY PROVISION was Not considered. [Union of India v. Maniklal Banerjee, AIR 2006 SC 2844]

Where no consideration was given to the question, the decision cannot be said to be binding; and precedents SUB SILENTIO – Without Arguments – are of NO MOMENT. [A-One Granites v. State of U.P., 2001-3 SCC 537]

A decision is available as a precedent only if it DECIDES a QUESTION OF LAW. [State of Punjab v. Surinder Kumar, AIR 1992 SC 1593: 1992-1 SCC 489]. Not facts. [Prakash Chandra Pathak v. State of Uttar Pradesh, AIR 1960 SC 195]

RATIO DECIDENDI is Binding Precedent: Mere Casual Expressions – Not of Much Avail.[ Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555; State of Maharashtra v. Bhakti Vedanta Book Trust, AIR 2013 SC 1667; 2013-4 SCC 676; Shrirampur Municipal Council v. Satyabhamabai Bhimaji Dawkher, AIR 2013 SC 3757; 2013 5 SCC 627; Arun Kumar Aggarwal v. State of Madhya Pradesh, AIR 2011 SC 3056; 2014-13 SCC 707).

For Binding Precedent, finding must be ‘RATIO DECIDENDI’ (necessary to the decision); and Not obiter dicta. [Allen in ‘Law in the Making’; Quoted in: Chandrapal Singh v. State of U. P. (All), 2023-11 ADJ 543; Chandrapal Singh v. State of U. P. (All), 2023-11 ADJ 543)]

Court’s order is binding on the parties under res judicata; the RATIO DECIDENDI is binding on other Courts as binding precedent. [The Modern English Legal System (4th Edition) by Smith, Bailey and Gunn (Sweet & Maxwell, 2002), pages 518-519]

What is of the essence in a decision is its ratio and not every observation found therein. [State of Orissa v. Sudhansu Sekhar Misra, AIR 1968 SC 647; Union of India v. Dhanwanti Devi, 1996-6 SCC 44; Secunderabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC)

The doctrine of precedent mandates that an exposition of law must be followed and applied. [State of U.P. v. Ajay Kumar Sharma, 2016-15 SCC 289].

Res judicata bars raising the same issue. Judicial precedent is not concerned with issues between parties. (Spencer Bower, Turner and Handley’s Commentary on the Doctrine of Res Judicata (Butterworths: London, Edinburgh, Dublin – 1996, pages 8 and 9)

Res judicata pertains to the parties; precedent refers to a binding declaration of law that applies to courts or authorities. [Indian Broadcasting and Digital Foundation v. Telecom Regulatory Authority of India, 01 Nov 2024, 2024 KER 80988].

A decision on the ‘construction of that document’ can operates as a judicial precedent against one though he was not a party to that litigation (Sahu Madho Dass v. Mukand Ram, 1955 AIR SC 481).

Ratio Decidendi Is Binding Precedent: Casual Words, Not of Much Avail

In Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555, it is pointed out as under:

“Hence, in light of the aforementioned judicial pronouncements, which have well settled the proposition that only the ratio decidendi can act as the binding or authoritative precedent, it is clear that the reliance placed on mere general observations or casual expressions of the Court, is not of much avail to the respondents.”
(Quoted in: State of Maharashtra v. Bhakti Vedanta Book Trust, AIR 2013 SC 1667; 2013-4 SCC 676;
Shrirampur Municipal Council v. Satyabhamabai Bhimaji Dawkher, AIR 2013 SC 3757; 2013 5 SCC 627;
Arun Kumar Aggarwal v. State of Madhya Pradesh, AIR 2011 SC 3056; 2014-13 SCC 707)

A Full Bench of the Allahabad HighmCourt, in Indian Ceramic House, Langra-Ki-Chowki, Agra v. Sales Tax Officer, II Sector, Agra : 1970 SCC OnLine All 193, observed as under:

“A Judgment is authoritative only as to that part of it which is considered to have been necessary to the decision of the case, and not that part which was not necessary to its decision. The first is called ‘ratio decidendi’. Which is binding as a precedent. The other called ‘obiter dicta’ cannot be treated as a binding precedent though the opinion so expressed is entitled to respect.” (Quoted in Chandrapal Singh v. State of U. P. (All), 2023-11 ADJ 543)

Allen in ‘Law in the Making’ said as under:

“Any judgment of any Court is authoritative only as to that part of it, called the ‘ratio decidendi’, which is considered to have been necessary to the decision of the actual issue between the litigants. It is for the Court, of whatever degree, which is called upon to consider the precedent, to determine what the true ‘ratio decidendi’ was…………..Judicial opinions upon such matters, whether they be merely casual, or wholly gratuitous or (as is far more usual) of what may be called collateral relevance, are known as ‘obiter dicta or simply ‘dicta’, and it is extremely difficult to establish any standard of their relative weight.” (Quoted in : Chandrapal Singh v. State of U. P. (All), 2023-11 ADJ 543). (Quoted in : Chandrapal Singh v. State of U. P. (All), 2023-11 ADJ 543).

A deliberate decision after hearing on a question constitute a precedent

A three Judge Bench of our Apex Court, in Union of India v. Dhanawanti Devi, (1996) 6 SCC 44, held as under:

“9. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a judge’s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates –
(i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts;
(ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and
(iii) judgment based on the combined effect of the above.
A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of the judgment in relation to the subject matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi.

10. Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent technique in the use of precedents……” (Quoted in: Vishal N. Kalsaria v. Bank of India, 2016-3 SCC 762)

Common Law Delves Precedents; Civil Law Dwells upon Codified Law

Common law is the body of customary law, based upon previous judicial decisions. The common-law courts in England, emerged in the Middle Ages, applied this system in the adjudication of disputes, in the King’s Court. Common law delves precedents. The Courts in India apply the common law, especially, in the arena where there are no enacted Civil Laws to apply. Civil law system dwells upon codified system of law. Judicial precedents are also looked to see the interpretation of law and legal principles.

Questions which are Essentially Questions of Fact, Cannot be Cited as Precedents

In State of Punjab v. Surinder Kumar, AIR 1992 SC 1593: 1992-1 SCC 489, it is laid down as under:

“A decision is available as a precedent only if it decides a question of law.”

In Prakash Chandra Pathak v. State of Uttar Pradesh, AIR 1960 SC 195, it is held as under:

“Learned counsel for the appellant cited before us a number of reported decisions of this Court bearing on the appreciation of circumstantial evidence. We need not refer to those authorities. It is enough to say that decisions even of the highest court on questions which are essentially questions of fact, cannot be cited as precedents governing the decision of other cases which must rest in the ultimate analysis upon their own particular facts.”

A case is only an authority for what it decides, and not from what logically follows from it (Ram Krishan Ram Nath v. Janpad Sabha, AIR 1967 SC 1073)

Ratio Decidendi – Basis of Reasons and Principles Underlying a Decision

It is the discernable ratio decidendi which forms a precedent and not the final order in the judgment (Sanjay Singh v. Uttar Pradesh PSC, Allahabad, 2007-3 SCC 720).

Decision Applicable Only to Facts Cannot be a Binding Precedent

The basis of reasons and principles underlying a decision is ratio decidendi. It is distinct from the ultimate relief granted in a given case. Therefore, the decision applicable only to the facts of the case cannot be treated as a binding precedent.

Essence in a Decision is its Ratio and Not Every Observation

The Supreme Court (B.V. Nagarathna, J.)observed in Secunderabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC), as under:

“22. Further, the precedential value of an order of the Supreme Court which is not preceded by a detailed judgment would be lacking inasmuch as an issue would not have been categorically dealt with. What is of essence in a decision is its ratio and not every observation found therein, nor what logically follows from the various observations made therein.”

Law laid down by SC – if only there is a Speaking Order; Not by Dismissal In Limine

It was added, in Secundrabad Club v. CIT – V, 17-08- 2023, as under:

“23. Another important principle to be borne in mind is that declaration of the law by the Supreme Court can be said to have been made only when it is contained in a speaking order, either expressly or by necessary implication and not by dismissal in limine.”

Law ‘Declared’, and ‘found or made’

While speaking about judicial precedents, in DTC v. DTC Mazdoor Congress Union, AIR 1991 SC 101, Mukherji, CJ., laid down that the expression ‘declared’ is wider than the words ‘found or made’. The latter expression involves the process, while the former expresses the result. (Referred to in: Secunderabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC).

Ratio Decidendi alone is Binding Precedent; It is statements of principles of law

The Supreme Court observed further in Secundrabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC), as under

“13. It is a settled position of law that only the ratio decidendi of a judgment is binding as a precedent.”

B.V. Nagarathna, J. held (in Secundrabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC) as under:

“According to the well-settled theory of precedents, every decision contains three basic ingredients:
.(i) findings of material facts, direct and inferential. An inferential finding of fact is the inference which the Judge draws from the direct or perceptible facts;
(ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and
(iii) judgment based on the combined effect of (i) and (ii) above.
For the purposes of the parties themselves and their privies, ingredient (iii) is the material element in the decision, for, it determines finally their rights and liabilities in relation to the subject-matter of the action. It is the judgment that estops the parties from reopening the dispute. However, for the purpose of the doctrine of precedent, ingredient (ii) is the vital element in the decision. This is the ratio decidendi. It is not everything said by a judge when giving a judgment that constitutes a precedent. The only thing in a judge’s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi.”

Statement of Law Applied to the Legal Problems Raised

In the leading case of Qualcast (Wolverhampton) Ltd. vs. Haynes, 1959 AC 743, it was laid down that the ratio decidendi may be defined as a statement of law applied to the legal problems raised by the facts as found, upon which the decision is based. The other elements in the decision are not precedents. A judgment is not binding (except directly on the parties to the lis themselves), nor are the findings of fact. This means that even where the direct facts of an earlier case appear to be identical to those of the case before the court, the judge is not bound to draw the same inference as drawn in the earlier case. (Referred to in: Secunderabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC).

Legal Principles Guiding the Decision Constitute ‘Ratio Decidendi’ or Binding Precedent

B.V. Nagarathna, J. added (in Secundrabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC) as under:

“The legal principles guiding the decision in a case is the basis for a binding precedent for a subsequent case, apart from being a decision which binds the parties to the case. Thus, the principle underlying the decision would be binding as a precedent for a subsequent case. Therefore, while applying a decision to a later case, the court dealing with it has to carefully ascertain the principle laid down in the previous decision. A decision in a case takes its flavour from the facts of the case and the question of law involved and decided.However, a decision which is not express and is neither founded on any reason nor proceeds on a consideration of the issue cannot be deemed to be law declared, so as to have a binding effect as is contemplated under Article 141, vide State of Uttar Pradesh vs. Synthetics and Chemicals Ltd. (1991) 4 SCC.”

Binding Precedent Helps in Promoting Certainty and Consistency

The doctrine of binding precedent helps in promoting certainty and consistency in judicial decisions and enables an organic development of the law besides providing assurance to individuals as to the consequences of transactions forming part of daily affairs.

Read Entire Judgment – to discern reasoning of a judgment

B.V. Nagarathna, J. further observed (in Secunderabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC) as under:

“The reasoning of a judgment can be discerned only upon reading of a judgment in its entirety and the same has to be culled out thereafter. The ratio of the case has to be deduced from the facts involved in the case and the particular provision(s) of law which the court has applied or interpreted and the decision has to be read in the context of the particular statutory provisions involved in the matter. Thus, an order made merely to dispose of the case cannot have the value or effect of a binding precedent.
19. What is binding, therefore, is the principle underlying a decision which must be discerned in the context of the question(s) involved in that case from which the decision takes its colour. In a subsequent case, a decision cannot be relied upon in support of a proposition that it did not decide. Therefore, the context or the question, while considering which, a judgment has been rendered assumes significance.”

Words in a Judgment are Not to be Interpreted as a Statute

B.V. Nagarathna, J. continued (in Secundrabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC) as under:

“21. In the context of understanding a judgment, it is well settled that the words used in a judgment are not to be interpreted as those of a statute.

Words in a Judgment – Rendered Contextually; Not be Taken Literally

B.V. Nagarathna, J. pointed out (in Secundrabad Club v. CIT, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC) as under:

“This is because the words used in a judgment should be rendered and understood contextually and are not intended to be taken literally.”

No implication – a decision is an authority for what decided

“Further, a decision is not an authority for what can be read into it by implication or by assigning an assumed intention of the judges and inferring from it a proposition of law which the judges have not specifically or expressly laid down in the pronouncement. In other words, the decision is an authority for what is specifically decides and not what can logically be deduced therefrom.”

Salmond Bifurcates Precedents – Authoritative and persuasive precedents

Authoritative precedents are binding on courts and a judge is bound to follow it. Thus it will be a legal sources of law. Persuasive precedents have persuasive value alone. A judge need not follow it if finds reasons for the same; nevertheless, he cannot ignore it. Judgments of foreign courts, decisions of the Privy Council etc. are examples for the same.

Obiter Dicta

Obiter dictum is the passing expression or opinion, or something said by the way, in a judgement, which is not essential to the decision. As laid down in Halsbury, Vol 22, p. 797, in England obiter dicta are not binding on any court. But, in India, obiter dictum of a High Court may have to be followed by the lower courts in its jurisdiction. The obiter dicta of the Supreme Court are taken with considerable weight. ‘Normally, even an obiter dictum is expected to be obeyed and followed (Sarwan Singh Lamba v. Union of India, AIR 1995 SC 1729).

Obiter Dictum of the Supreme Court is binding under Article 141

B.V. Nagarathna, J. further observed (in Secundrabad Club v. CIT – V, 2023 SCC OnLine SC 1004, 2023-457 ITR 263 (SC), as under:

“20. As against the ratio decidendi of a judgment, an obiter dictum is an observation by a court on a legal question which may not be necessary for the decision pronounced by the court. However, the obiter dictum of the Supreme Court is binding under Article 141 to the extent of the observations on points raised and decided by the Court in a case. Although the obiter dictum of the Supreme Court is binding on all courts, it has only persuasive authority as far as the Supreme Court itself is concerned.”

Per Incuriam

‘Per incuriam’ is used to denote judgments or findings that are delivered out of ignorance of some statute or rule.

It is pointed out in Govt. of Andhra Pradesh v. B. Satyanarayana Rao, AIR 2000 SC 1729: (2000) 4 SCC 262 as under:

“Rule of per incurium can be applied where a Court omits to consider a binding precedent of the same court or the superior court rendered on the same issue or where a court omits to consider any statute while deciding that issue.”

In Banwari v. Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC), Neutral Citation: 2024 INSC 951, B.R. Gavai, K.V. Viswanathan, JJ., held as under:

20. In this respect, we may gainfully refer to the observations of a Constitution Bench of this Court in the case of National Insurance Company Limited v. Pranay Sethi and Others (2017) 16 SCC 680. The relevant paragraphs of the judgment read as under:
- “27. We are compelled to state here that in Munna Lal Jain , the three-Judge Bench should have been guided by the principle stated in Reshma Kumari which has concurred with the view expressed in Sarla Verma or in case of disagreement, it should have been well advised to refer the case to a larger Bench. We say so, as we have already expressed the opinion that the dicta laid down in Reshma Kumari being earlier in point of time would be a binding precedent and not the decision in Rajesh.
- 28. In this context, we may also refer to Sundeep Kumar Bafna v. State of Maharashtra [Sundeep Kumar Bafna v. State of Maharashtra, (2014) 16 SCC 623 : (2015) 3 SCC (Cri) 558] which correctly lays down the principle that discipline demanded by a precedent or the disqualification or diminution of a decision on the application of the per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and comity of courts would become a costly casualty. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the court. A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co-equal or larger Bench. There can be no scintilla of doubt that an earlier decision of co-equal Bench binds the Bench of same strength. Though the judgment in Rajesh case was delivered on a later date, it had not apprised itself of the law stated in Reshma Kumari but had been guided by Santosh Devi . We have no hesitation that it is not a binding precedent on the co-equal Bench.”
It can thus be seen that, this Court in unequivocal terms has held that an earlier decision of a Bench of particular strength would be binding on the subsequent Benches of this Court having the same or lesser number of judges.”

A “collateral or incidental” finding would not ordinarily be res judicata.

If only finding is “Necessary”, then only it is “Directly and Substantially” in issue

In Sajjadanashin Sayed v. Musa Dadabhai Ummer, (2000) 3 SCC 350 the Supreme Court held that to attract res judicata on an earlier finding, the matter must have been directly and substantially in issue and that the finding on an issue came “collaterally or incidentally” would not ordinarily be res judicata. It was pointed out that if only the issue was “necessary” to be decided for adjudicating on the principal issue and had actually been decided, then only it would have to be treated as “directly and substantially” in issue; and that it is also necessary that the judgment was in fact based upon that decision.

How to Subscribe ‘IndianLawLive’? Click here – “How to Subscribe free “

Read in this cluster (Click on the topic):

Civil Suits: Procedure & Principles

Book No, 1 – Civil Procedure Code

Principles and Procedure

PROPERTY LAW

Title, ownership and Possession

Adverse Possession

Land Laws/ Transfer of Property Act

Power of attorney

Evidence Act – General

Sec. 65B

Admission, Relevancy and Proof

Law on Documents

Interpretation

Contract Act

Law on Damages

Easement

Stamp Act & Registration

Divorce/Marriage

Negotiable Instruments Act

Arbitration

Will

Book No. 2: A Handbook on Constitutional Issues

Religious issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

General Principles
Dedication and Vesting
Trustees and Management
Breach of Trust
- Breach of Trust and Removal of Trustees
Suits by or against Trusts
Law on Hindu Religious Endowments
Temples, Gurudwaras, Churches and Mosques – General
- Legal Personality of Temples, Gurudwaras, Churches and Mosques
Constitutional Principles
Ayodhya and Sabarimala Disputes
General

1 Comment

srinivasanadvocate1970 says:

August 9, 2024 at 9:38 am

A fundamental principle of legal precedent!

Ratio Decidendi (Latin for “the reason for the decision”) refers to the core reasoning or principle underlying a court’s judgment. It is the essential aspect of a judicial decision that sets a precedent for future cases.

The key points to note are:

Ratio Decidendi is the binding part of a judgment, creating a precedent. 2. It is the underlying reason or principle that supports the court’s decision. 3. Only the Ratio Decidendi is binding on lower courts, not the entire judgment. 4. The final order or outcome of the case is not necessarily a precedent, but rather the reasoning behind it.

In other words, when a higher court decides a case, its Ratio Decidendi becomes a precedent that lower courts must follow in similar cases. However, the specific final order or outcome of the case may not be a precedent, as it is tied to the unique facts and circumstances of that case.

This distinction is crucial in understanding how legal precedents work and how courts apply them in subsequent cases.

LikeLike

Ratio Decidendi (alone) Forms a Precedent; Not the Final Order or Conclusion

How to Subscribe ‘IndianLawLive’? Click here – “How to Subscribe free “

Published by sajikoduvath

1 Comment

Leave a Comment Cancel reply

How to Subscribe ‘IndianLawLive’? Click here – “How to Subscribe free “

Share this:

Related

Published by sajikoduvath

1 Comment

Leave a Comment Cancel reply