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Chapter 01 Sources of Law 1229869794330008 1
Chapter 01 Sources of Law 1229869794330008 1
Chapter 01 Sources of Law 1229869794330008 1
This doctrine means adherence to the earlier decision and not unsettling things, which are already decided.
This doctrine is based on expediency and public policy.
Why precedents are recognized
The practice of following precedents is necessary to secure the certainty of and predictability of decisions. This
creates confidence in the minds of the litigants and the administration of justice becomes fair.
Hierarchy of Courts
The general rule of doctrine of precedent as regards hierarchy of Courts is that each Court is absolutely bound
by the decisions of the Courts superior to it. As regards higher Courts, they are, to a certain extent bound by
their own decisions.
Supreme Court – This is the highest Court in India. Its decisions are binding on all Courts within the
territory of India (Article 141 of the Constitution). The decisions of the Full Bench are binding on the smaller
Benches of the Court.
CASE EXAMPLE
In Golaknath Vs. State AIR (1967) SC 1643, the Supreme Court by a 6-Judge Bench gave a decision that
Fundamental Rights are not amendable. Six years later, the Supreme Court in Kesavananda Bharti Vs. State
of Kerala (1973) SCC 225 by a 13-Judge Bench overruled the Golaknath Case.
High Courts – the decisions of a High Court are binding on all the Courts below it, within its jurisdiction
(District Courts/Court of Sessions).
Subordinate or District Courts – These Courts are in districts. They are bound to follow the decisions of the
higher Courts.
SOME IMPORTANT JUDICIAL DOCTRINES
ratio decidendi (reasoning behind the decision)
A decision of a Court can be seen from two aspects viz
1. What does the case decide between the parties? and
2. What principle or rule of law does it lay down?
In delivering judgment the judge gives reasons for his decisions, and it is these reasons which may be
important as precedents in future cases. No two cases, which come before the courts, are exactly alike,
and to discover whether there is a binding precedent it is necessary to establish the ratio decidendi,
that is, the exact reason or reasons for the decision.
obiter dictum (an incidental or collateral opinion by a judge)
It means an incidental or collateral opinion which is uttered by a judge while delivering a judgment and
which is not binding. These are peripheral statements that may be found in the main decision but which do
not deal with the central issue.
Obiter dicta are not binding, but they may be treated as of "persuasive authority"
CASE EXAMPLE – obiter dicta
In D Cowasji & Co. Vs. State of Mysore (AIR 1975 813), the petitioner claimed refund of a huge amount of
Excise duty paid by it several years after the duty was paid. The Court rejected the claim for refund
pointing out that it would be unjust to require its refund after such lapse of time because the Government
would have, spent the amount for governmental purposes. By this decision the dispute was settled.
But the Court went a step further and added a sentence in judgement as obiter dicta that “nor is there any
provision under which the court could deny refund of tax even if the person who paid it has collected it
from his customers and has no subsisting liability or intention to refund it to them or for any reason it is
impracticable to do so.”
This observation of the Court contained an implication. Excise duty is collected by the manufacturer from
a large number of customers and paid it to the Government. The manufacturer does not pay a pie from his
pocket. If the duty paid by him is ordered to be refunded the beneficiary of refund would be the
manufacturer because he may not be in a position to pay back the Excise duty collected by it to the
customers. It would be impossible for the manufacturer to trace out the customers who were in thousands
or perhaps lakhs. Though the manufacturer had claimed refund of that amount to himself no opportunity
had been given by the Court to the Government to argue on the tenability of the claim. What obviously
weighed with the judge in ordering the refund was the “the dharma of the situation”. He assumed that
since the excess duty was paid by the manufacturer belonged to him. While in fact it did not belong to him.
It only unjustly enriches him.
This observation of the Supreme Court i.e. obiter dicta was noticed by many High Courts. Taking the view
that since this expression of opinion was of the highest court of the land and should receive respect, they
treated this as ratio and started giving refund orders to a number of manufacturers. In course of time the
refund amounted to hundreds of crores of rupees. Later on, the legislature had to rectify the situation by
bringing amendments to the stature.
LECTURES BY PROF. S N GHOSH
IIPM 4 CH. – 1 LAW & SOURCES