When we study precedents in Jurisprudence, it becomes important to understand the three concepts.

1. Ratio Decidendi
1) It means the reason for the decision; the basis of a decision. It is the principle orrule
of law on which a court’s decision is founded. It is the ‘law declared’ in a judgment.
2) It is the authoritative element in a judicial decision.
3) It is the rule of law which the court regards as governing the facts of a case.
4) It is the rule used for resolving the issue under discussion.
5) The eventual decision given by a court is not the precedent. The precedent is the
legal principle (ratio) relied on in arriving at the decision. Thus, it is only the ratio
which is to be followed by judges in the future confronted with similar facts.
6) Justice Goodhart h gave a slightly different meaning to the term ‘ratio decidendi’.
He defined it as a decision based on material facts of the case. Thus, in order to
determine the ratio, we must look at the material facts plus the decision thereon.
7) Example: ratio decidendiin the case of Donogue v. Stevenson (Snail in the bottle
case) was that the manufacturer is liable to the consumer for his negligence in
manufacturing goods which are of such nature that they are incapable of
intermediate inspection by the retailer.
Difference between Ratio Decidendi & Res Judicata
Res Judicata: It is the decision given in a case binding on the parties to that case. Subject
to any appeal, the same parties cannot re-litigate the same points already judicially
determined. But this decision is only binding on the parties, not on other courts.
Ratio Decidendi: Ratio is not the actual decision, but the reason for decision. It is only the
ratio of the decision and not the decision itself which is a binding precedent on other courts.

2. Obiter Dicta
1) They are ‘they said in passing’.
2) They are also observations on legal points but are not binding as precedent. They
are not authoritative. (although it may have persuasive value)
3) They are other observations made responding to the arguments of counsel, or
identifying issues to be resolved in future.
4) It is a ruling based on hypothetical facts.
5) It is unnecessary to the decision of the case in hand. It is a remark or opinion
expressed by a judge not directly upon the question before the court. It is just made
by the way, incidentally or collaterally. It may be made by way of suggestion or
illustration or analogy…
6) The terms ‘dicta’ and ‘obiter dicta’ are used interchangeably. (‘dictum’ is singular;
‘dicta’ is plural)
7) In England, an obiter dictum of a higher court has no binding effect on subordinate
courts.
8) In India, the High Courts have almost unanimously held that they would generally
bound by the obiter dicta of the Supreme Court. But the Supreme Court must have
declared some principle of law in clear terms; it must not have merely expressed an
opinion. (Article 141 of the Constitution of India)
9) Obiter dicta may be of different kinds and may carry varying degrees of weight.
Some are casual expressions of opinion liable to be disregarded; others may be
deliberate expressions which, although not binding, carry greater weight than the
former.
10) Example of Carlill v. Carbolic Smoke Ball Co case: A company made a product
called ‘smoke ball’ to cure influenza. It published an advertisement claiming that it
would pay £ 100 to anyone who contracted influenza after using the product. The
plaintiff brought an action against the company on the ground that she had
contracted influenza after using the product. The company argued that there was no
contract, for although it had made an offer, but the offer was not accepted by the
plaintiff. To this, the learned judge replied: “If I advertise to the world that my dog
is lost, and thatanybody who brings the dog to a particular place willbe paid some
money, are allthe police or otherpersons whose business it is to find lost dogs to be

3. expected to sitdown and write me a note saying that they have accepted my
proposal?Why, of course (not)!” This dog analogy is clearly obiter, as the case is
about Carbolic Smoke Balls, and not about lost dogs.
11) In a judgment, it is not specifically mentioned as to which statements are obiter
dicta and which are ratio decidendi. It is therefore quite a challenge for the lawyer to
find put which statements are to be considered binding rules of law and which are
merely opinions not to be held binding.
Doctrine of Stare Decisis
1) Stare Decisis = stand by the things decided (do not unsettle the established)
2) It means adherence to precedents. Once a point of law has been decided in a
particular case, the same law must be applied in all future cases which contain the
same material facts. All courts are bound to follow the rule of law laid down by the
courts above them. Decisions of courts of coordinate jurisdiction have persuasive
value.
3) It means that the courts must not change the law unless they absolutely have to in
order to prevent injustice. Being obliged to follow a decision even the decision does
not appear to be fully correct.
4) This doctrine is also known as ‘the doctrine of precedent’.
5) Origin of the doctrine: common law, when the decisions of courts started being
reported. This doctrine is followed in India as well.
6) The operation of this doctrine presupposes the existence of a hierarchy of courts.
7) It brings about certainty, uniformity, consistency, predictability, stability in the law
as like cases decided in the like manner. This in turn helps to generate confidence in
a legal system. It also increases judicial efficiency by relieving courts of having to
reinvent legal principles for each case brought before them.
8) But the doctrine is not to be applied so as to perpetuate a wrong when the court is
convinced that its previous decision was erroneous. The rule of stare decisis is not
imperative and inflexible. It can be departed from by the discretion of court for
serving larger public interest or for preventing grave injustice.
9) It has been stated by the Supreme Court of India that the doctrine is only a useful
servant; it must not be turned into a tyrannical master. It should not be followed

4. blindly as a command otherwise the decisions of courts will not be able to develop
law according to the changing needs of the society.
Application of the Stare Decisis in India
Hierarchy of courts in India: The lower most courts are the subordinate courts, which are
the courts of first instance. Above them are High courts and the Supreme Court is at the
apex.
Article 141 of the Constitution of India states that the law declared by the Supreme Court
shall be binding on all courts within the territory of India. Thus, the decision of the
Supreme Court is the last word on interpretation of the Constitution or any other law; it is
the law of the land.
1. The decision of Supreme Court is binding absolutely on all courts and tribunals in India.
2. The decision of a High Court is binding on all courts and tribunals within its jurisdiction.
3. The Supreme Court is not bound by its earlier decision.
4. The decision of one High Court is not binding on any other High Court but it has only
persuasive value.
5. A Single Bench Judge is bound by the decision of Division Bench of the same High Court, but
a Division Bench is not bound to follow a decision of the Single Bench of the same High Court.
6. When single judge of the High Court is of the opinion that a previousdecision of anothersingle
judge of the same High Court was erroneous, he should refer the matter to Divisional Bench
rather than himself holding the previous decision as wrong. Similarly, one Division Bench
should not set aside a decision of another Division Bench of the same High Court, but it must
refer the matter to a full bench.
7. The judgments of English Courts and the Privy Council are not binding on the Supreme Court,
they only have persuasive value.