The ratio decidendi is "the point in a case that determines the judgement" or "the principle that the case establishes". In other words, ratio decidendi is a legal rule derived from, and consistent with, those parts of legal reasoning within a judgment on which the outcome of the case depends.

In simpler words, a judicial statement of what is commonly referred to as a judgment in a legal case is referred to as Ratio Decidendi or Ratio. Ratio in Latin means the reason for the decision or judgment but actually it is much more than that.

The expression ratio decidendi is normally used to refer to some binding rule found in decided cases, which a later court cannot generally question. And a defining technique is to elucidate the judicial power to make binding rules and a rule made within the ambit of this power to constitute the ratio of the case.

The legal meaning of Ratio Decidendi means 'the reason' or 'the rationale for the decision'. Ratio Decidendi literally means 'reason for deciding'. The ratio of the case has to be deduced from its facts, the reasons the court gave for reaching its decision, and the decision itself. It is said to be the statement of law applied to the material facts. Only the ratio of a case is binding on inferior courts, by reason of the doctrine of precedent that needs to be followed by the courts in subsequent decisions.

It is indisputable that the facts of 2 cases cannot be similar and therefore the observations pertinent to the facts cannot be binding in the other cases though the similar laws are attracted but the reasons for arriving at a decision are binding. In case there are multiple reasons for deciding in a case, then all those reasons would be binding in the subsequent cases. Thus, Ratio decidendi is the "rationale for the decision" and refers to a key factual point or chain of reasoning in a case that drives the final judgment.

It would be trite to refer to the case of Commissioner of Income Tax vs M/s Sun Engineering Works Private Limited AIR 1993, SC 43 wherein the Hon'ble Apex Court held that, "while applying the decision to a later cases, the court must carefully try to ascertain the true principle laid down by the decision of the Supreme Court and not to pick out words or sentences from the Judgment divorced from the context of question under consideration by the court to support their reasoning." If the judgment gives no reason for deciding a point, this would not be binding because what is binding is the reasons for the decision.

It would be apropos to refer to the case of Constitution bench of the Apex Court
in Punjab Land Development and Reclamation Corporation Ltd., Chandigarh vs. Presiding Officer, Labour Court Chandigarh 1990 SCC (3) 682, wherein the Court held thus:

To consider the ratio decidendi of a case we have, therefore, to ascertain the principle on which the case was decided. Sir George Jessel in Osborne v. Rowlett, [1880] 13 Ch. D. 774, remarked that '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.

The ratio decidendi of a decision may be narrowed or widened by the judges before whom it is cited as a precedent. In the process the ratio decidendi which the judges who decided the case would themselves have chosen may be even different from the one which has been approved by subsequent judges."

In the case of Krishena Kumar And Anr. Etc. Etc vs Union of India And Ors 1990 AIR 1782 the Constitution Bench of the Apex Court explained the doctrine of Ratio Decidendi thus:

"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 and Lord Halsbury in Quinn v. Leathem, [1981] A.C. 495, (502). 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."

It would be befitting to refer to the judgment of the Constitution Bench of the Apex Court in Islamic Academy of Education vs. State of Karnataka, 2003 (6) SCC 697 wherein the Court dealing with ratio decidendi observed thus:

"139. A judgment, it is trite, is not to be read as a statute. The ratio decidendi of a judgment is its reasoning which can be deciphered only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief finally granted or the manner adopted for its disposal. (See Executive Engineer, Dhenkanal Minor Irrigation Division v. N.C. Budharaj(2001) 2 SCC 721)"

The Apex Court in Sanjay Singh & Anr. vs U.P. Public Service Commission, Allahabad (2007) 3 SCC 720 explained the concept of ratio decidendi thus:

"The reasons for the decision or the ratio decidendi is not the final order containing the decision. In fact, in a judgment of this Court, though the ratio decidendi may point to a particular result, the decision (final order relating to relief) may be different and not a natural consequence of the ratio decidendi of the judgment. This may happen either on account of any subsequent event or the need to mould the relief to do complete justice in the matter. It is the ratio decidendi of a judgment and not the final order in the judgment, which forms a precedent. The term 'judgment' and 'decision' are used, rather loosely, to refer to the entire judgment or the final order or the ratio decidendi of a judgment."

It would be apposite to refer to the case of Laxami Devi vs State Of Bihar & Ors on (2015) 10 SCC 241 wherein the Apex Court dealt the connotation of the term ratio decidendi and observed thus:

"This would therefore be the apposite time and place for a brief discussion on the contours and connotations of the term ratio decidendi, which in Latin means "the reason for deciding". According to Glanville Williams in 'Learning the Law', this maxim "is slightly ambiguous. It may mean either (1) rule that the judge who decided the case intended to lay down and apply to the facts, or (2) the rule that a later Court concedes him to have had the power to lay down."

In G.W. Patons' Jurisprudence, ratio decidendi has been conceptualised in a novel manner, in that these words are "almost always used in contradistinction to obiter dictum. An obiter dictum, of course, is always something said by a Judge. It is frequently easier to show that something said in a Judgment is obiter and has no binding authority. Clearly something said by a Judge about the law in his judgment, which is not part of the course of reasoning leading to the decision of some question or issue presented to him for resolution, has no binding authority however persuasive it may be, and it will be described as an obiter dictum."

'Precedents in English Law' by Rupert Cross and JW Harris states - "First, it is necessary to determine all the facts of the case as seen by the Judge; secondly, it is necessary to discover which of those facts were treated as material by the Judge." Black's Law Dictionary, in somewhat similar vein to the aforegoing, bisects this concept, firstly, as the principle or rule of law on which a Court's decision is founded and secondly, the rule of law on which a latter Court thinks that a previous Court founded its decision; a general rule without which a case must have been decided otherwise.

20. In other words, the enunciation of the reason or principle upon which a question before a court has been decided is alone binding as a precedent. 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 [pic] law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the court to spell it out with difficulty in order to be bound by it."

A three member bench of the Apex Court in Union Of India & Ors vs Dhanwanti Devi & Ors
(1996) 6 SCC 44 dealt with the meaning of Ratio Decidendi and observed thus:

"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 contain three basic postulates:
[i] findings of material 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 decision is its ratio and not every observation found therein not what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts 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 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."

The Apex Court in the case of Girnar Traders v. State of Maharashtra (2007) 7 SCC 555 dealing with ratio decidendi observed thus:

"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, 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."

Ratio Decidendi has been succinctly explained by the Apex Court in the case of Regional Manager and Manager and Another vs. Pawan Kumar Dubey (1976) 3 SCC 334 thus:

7..........Indeed, we do not think that the principles of law declared and applied so often have really changed.

But, the application of the same law to the differing circumstances and facts of various cases which have come up to this Court could create the impression sometimes that there is some conflict between different decisions of this Court. Even where there appears to be some conflict, it would, we think, vanish when the ratio decidendi of each case is correctly understood.

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."

From the aforesaid deliberations, the term Ratio Decidendi literally translates as the reason for the decision. The ratio decidendi of a case is the principle of law on which a decision is based. When a judge delivers judgement in a case, he outlines the facts which he finds to have been proved on the evidence. Then he applies the law to those facts and arrives at a decision, for which he gives the reason (ratio decidendi).

It establishes a precedent, which is the rule of law used by the judge or judges in deciding the legal problem raised by the facts of the case. This rule, which is an abstraction from the facts of the case, is known as the ratio decidendi of the case and is binding on the same Court or subordinate judiciary.

Written By: Inder Chand Jain
Email : [email protected], Ph no: 8279945021