1. The legal meaning of the ratio Decidendi is the rule of law on which a judicial decision is based.
2. The full bench of three-judge bench of apex court in MYSORE STATE ROAD TRANSPORT CORPORATION (1974) held what is ratio Decidendi. Referring to 'Dr. A.L. Goodhart 1953 essay published by the Association of the Bar of New York' wherein it is stated 'that the principle of a case is determined by taking into account the facts treated by the Judge deciding a case as material and his decision "as based thereon". Salmond, in his "Jurisprudence" (12th Ed. p. 181) has observed that Courts, in their quest for "the rule which the Judge thought himself to be applying" tend to ignore this method in practice. It was stated there : "any such rule must be evaluated in the light of facts considered by the Court to be material".
3. The full bench of three judges of apex court THE REGIONAL MANAGER AND ANOTHER (1976) Held that
It is the rule deducible from the application of law to the facts and circumstances of a case which constitutes its Ratio Decidendi and not some conclusion based upon facts which may appear to be similar. One additional or different fact can make a world of difference between conclusions in two cases even when the same principles are applied in each case to similar facts.
4. The Apex court Full bench in MUNICIPAL CORPORATION OF DELHI (1988)
IT is axiomatic that when a direction or order is made by consent of the parties, the Court does not adjudicate upon the rights of the parties nor lay down any principle. Quotability as 'law' applies to the principle of a case, its ratio decidendi. The only thing in a Judge's decision binding as an authority upon a subsequent Judge is the principle upon which the case was decided. Statements which are not part of the ratio decidendi are distinguished as obiter dicta and are not authoritative.
5. BALBIR SINGH KRISHENA KUMAR DESH RAJ KOHLI R. N. MUBAYI, PRESIDENT, ALL INDIA RETIRED RAILWAYMEN (P. F. TERMS) ASSOCIATION BRIJ MOHAN KAUL K. RAVI VERMA apex court Held that
The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge - made, and a minor premise consisting of the material facts of the case under immediate consideration.
6. The Apex court Full bench in ISLAMIC ACADEMY OF EDUCATION Vs STATE OF KARNATAKA Decided by ARIJIT PASAYAT, K. G. BALAKRISHNAN, S. B. SINHA, S. N. VARIAVA, V. N. KHARE JJ. on August 14,2003
The ratio decidendi of a judgment has to be found out only on reading the entire judgment. In fact, the ratio of the judgment is what is set out in the judgment itself. The answer to the question would necessarily have to be read in the context of what is set out in the judgment and not in isolation.
7. The Apex court Full bench in CHLORO CONTROLS (I) P. LTD Vs SEVERN TRENT WATER PURIFICATION INC decided by A. K. PATNAIK, S. H. KAPADIA, SWATANTER KUMAR JJ. on September 28,2012
It will neither be permissible nor in consonance with the doctrine of precedent that passing observations by the Bench should be construed as the law while completely ignoring the ratio decidendi of that very judgment.
8. The Apex court Full bench in STATE OF WEST BENGAL Vs KESORAM INDUSTRIES LTD (2004)
THE principles of reading a judgment is well-known. What is binding in terms of Article 141 of the Constitution of India is the ratio of the judgment. THE ratio decidendi of a judgment is the reason assigned in support of the conclusion. If the reasons contained in a judgment do not appeal to a subsequent Bench, the matter may be referred to a larger Bench but so long the same is not done, the ratio can neither be watered down nor brushed aside.
9. The full bench of three judges of apex court SHRIRAMPUR MUNICIPAL COUNCIL April 01,2013
Thus, observations of the Court did not relate to any of the legal questions arising in the case and, accordingly, cannot be considered as the part of ratio decidendi. 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.
10. The Apex court Full bench in Balwant Rai Saluja And Anr. Vs Air India Ltd. And Ors decided by ARUN MISHRA, H. L. DATTU, R. K. AGRAWAL JJ. on August 25,2014
'what constitutes binding precedent is the ratio Decidendi of a case, and this is almost always to be ascertained by an analysis of the material facts of the case - that is, generally, those facts which the Tribunal whose decision is in question itself holds, expressly or implicitly, to be material.
11. 15. The Apex court Full bench in DIRECTOR OF SETTLEMENTS, ANDHRA RADESH AND OTHERS (2002) Held that
To determine whether a decision has 'declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An 'obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter dicta may not have a bind effect as a precedent, but it cannot be denied that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court. When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court which refuses to follow the decision and direction of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity.
16. In Rajeshwar Prasad Mishra v. the State of West Bengal and Another, it was held:
It is also well known that ratio of a decision is the reasons assigned therein."
From the above judgments we can make out that, once the judgment is passed by the High Court or the Supreme court on set of facts, in the subsequent case of similar set of facts, the decision becomes binding precedent. It becomes law of the land. The same is binding on the supreme court co-equal or small benches of supreme court and High courts and lower courts under article 141 of the constitution. The Co-equal bench of supreme court can differ with earlier judgement of co-equal bench and refer to the larger bench for authoritative pronouncement. The co-equal bench in case of earlier bench did not refer to the provisions of the act or wrongly relied on the earlier judgement against its ratio then they can declare such judgement as per incuriam and not follow that earlier judgement. The Co-equal bench of supreme court can say that the observation made in an earlier judgment is not regarding the matter/facts considered by the court will be considered as obiter dicta and not followed. Accept these two circumstances the judgment of the apex court is binding on co-equal bench and smaller benches and high courts and lower courts. The court deciding the matter on the concession made by the counsel is not a binding precedent.
Referred following judgements of Supreme court.
1. MAGANLAL CHHAGANLAL (P) LTD. Vs. MUNICIPAL CORPORATION OF GREATER BOMBAY AND OTHERS decided on : 11-04-1974 reported in AIR 1974 SC 2009
2. MYSORE STATE ROAD TRANSPORT CORPORATION Vs. MYSORE STATE TRANSPORT APPELLATE TRIBUNAL Decided on : 08-08-1974 reported in AIR 1974 SC 1940
3. REGIONAL MANAGER AND ANOTHER Vs. PAWAN KUMAR DUBEY decided on : 08-03-1976 reported in AIR 1976 SC 1766
4. STATE OF U.P. Vs. RAM CHANDRA TRIVEDI decided on : 01-09-1976 reported in AIR 1976 SC 2547
5. SHRIRAMPUR MUNICIPAL COUNCIL Vs Satyabhamabai Bhimaji Dawkher decided on April 01,2013 reported in AIR 2013 SC 3757
6. VALLIAMMA CHAMPAKA PILLAI Vs SIVATHANU PILLAI decided on August 24,1979 reported in AIR 1979 SC 1937
7. MUNICIPAL CORPORATION OF DELHI Vs GURNAM KAUR decided on September 12,1988 reported in AIR 1989 SC 38
8. UNION OF INDIA Vs RAGHUBIR SINGH decided on May 16,1989. Reported in AIR 1989 SC 1933
9. Punjab Land Development And Reclamation Corporation Limited Chandigarh Divisional Controller Maharashtra State Road Transport Corporation Amravati Regional Manager West Zone Now Known As Vs Presiding Officer Labour Court Chandigarh:Chandrashekhar Maribhau Deshmukh : Secretary U P Bank Employees Union C O Bank Of Baroda Latouche Road Kanpur :Labour Court Ranchi:Namdeo:Secretary Decided on May 04,1990 reported in (1990) 3 SCC 6
10. BALBIR SINGH KRISHENA KUMAR DESH RAJ KOHLI R. N. MUBAYI, PRESIDENT, ALL INDIA RETIRED RAILWAYMEN (P. F. TERMS) ASSOCIATION BRIJ MOHAN KAUL K. RAVI VERMA Vs UNION OF INDIA decided on July 13,1990 reported in AIR 1990 SC 1782
11. DIRECTOR OF SETTLEMENTS, ANDHRA RADESH AND OTHERS Vs M.R. APPARAO AND ANOTHER Decided on : 20-03-2002 reported in AIR 2002 SC 1598
12. ISLAMIC ACADEMY OF EDUCATION Vs STATE OF KARNATAKA Decided on August 14,2003 reported in AIR 2003 SC 3724
13. STATE OF WEST BENGAL Vs KESORAM INDUSTRIES LTD Decided on January 15,2004 reported in AIR 2005 SC 1646
14. CHLORO CONTROLS (I) P. LTD Vs SEVERN TRENT WATER PURIFICATION INC decided on September 28,2012 reported in (2013) 1 SCC 641
15. Balwant Rai Saluja And Anr. Vs Air India Ltd. And Ors decided on August 25,2014 reported in AIR 2015 SC 375
16. Hyder Consulting (Uk) Ltd. Vs Governor, State Of Orissa decided on November 25,2014 reported in AIR 2015 SC 856
17. South Central Railway Employees Co -Op. Credit Society Employees Union Vs B. Yashodabai decided on December 08,2014 reported in reported in (2015) 2 SCC 727
18. K. S. Puttaswamy (Retd. ) And Ors. Vs UNION OF INDIA (UOI) AND ORS. decided on August 11,2015 reported in AIR 2015 SC 30.
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