Law has its origin mainly from four sources, i.e., Customs, Precedent, Legislation and Conventional Law. The Precedents established by the Supreme Court are the leading sources of declared law. Precedent is an earlier event or action that is regarded as an example or guide to be considered in subsequent similar circumstances.

Precedent signifies a judgement or decision of a superior court of law cited as an authority for deciding a similar set of facts. A precedent which creates and applies a new rule is called an original precedent and when the precedent does not create a new rule that merely apply on existing rule of law then it is termed as Declaratory precedent. In India the Supreme Court is the highest court in hierarchy and decisions of the Supreme Court are binding on all courts of India.

Article 141 of the Constitution of India stipulates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. Thus, the general principles laid down, by the Supreme Court are binding on each individual including those who are not a party to an order. In a number of judgements the Supreme Court has emphasized the importance and validity of Article 141 of the Constitution within the ambit of following certain general rules, i.e. Obiter-Dictum', Ratio-Decidendi', Stare decisis', Per incuriam' Prospective Overruling and Legislative provisions etc.

1. Obiter-Dictum
   The phrase Obiter dictum' has been derived from Latin words obiter' and dictum'. Obiter means in passing' and Dictum denotes  something that is said'. Thus, in the legal parlance the obiter-dictum' connotes a judge's expression of opinion uttered in court or giving judgement, but not essential to the decision and therefore without binding authority. Therefore, the obiter dictum may be termed as a casual remark of the court while deciding the actual issues, which is considered as beyond the ambit of the operative part of the judgement.
    
2. Ratio Decidendi
   Ratio Decidendi' is a Latin phrase meaning "the reason" or "the rationale for the decision". Ratio-Decidendi' is the determining point which becomes the base for a judgement. Thus, Ratio-Decidendi is an essential precedent requires to be followed by subordinate courts in similar type of cases.
    
3. Stare decisis
   Stare Decisis is a Latin term which signifies To stand by decided cases or to uphold precedents or to maintain former adjudications. In India, the doctrine of stare decisis has been adopted through Article 141 of the Constitution, which declares that decisions of higher court are binding on subordinate courts. The doctrine of Stare decisis; is not applicable in the Supreme Court, thus, the Supreme Court is not bound by its own decisions, hence, it may depart from its own previous rulings in extra ordinary or special cases or in larger public interest.
    
4. Per incuriam:
   Per incuriam is a Latin terms which means "through lack of care". A court decision made per incuriam is one which ignores a contradictory statute or binding authority, and is therefore wrongly decided and of no force. A decision rendered in ignorance of a previous binding decision of its own or of a court of higher jurisdiction or ignorance of the terms of a statute or of a rule having the force of law locks precedent value, is one such exception and is described as per incurium judgement and therefore has no binding force.
    
5. Prospective Overruling:
   To avoid superfluous litigations in larger public interest, the Apex Court may avoid reopening of issues which are already settled and entertaining the same would increase unnecessary multiplicity of proceedings. The overruling curtails the binding force for the earlier decisions. The prospective overruling may be done by the higher court or of similar court of larger bench but overruling cannot be done by obiter dictum.
    
6. Legislative Provisions:
   The parliament is the supreme legislative authority, thus, it can destroy the effects of precedents, established by the Supreme Court, by passing a statutory law. Legislation can abrogate the precedent impliedly or expressly.
    

The Hon'ble Supreme Court observed in a case titled as Sajjan Singh Vs. State of Rajasthan [AIR 1965, SC 845], that:
it is a true that Constitution does not place any restriction on our power to review our earlier decision or even to depart from them and there can be no doubt in the matter relating to decision of constitutional points which have significant impact on fundamental rights we could be prepared to review our earlier decision in the interest of public good. The doctrine of stare deci's may not strictly apply in this context and no one can dispute the position that the said doctrine should not be permitted to perpetuate erroneous decisions pronounced by this court to the detriment of general welfare.

 The issue of ratio decidendi has been explained by the Supreme Court in Director of Settlements, Andhra Pradesh and Others Versus M.R. Apparao and Another' [AIR 2002 SC 1598 ] wherein it was observed by the Hon'ble Supreme Court that Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law.

It is, therefore, an essential function of the Court to interpret legislation. The statements of the Court on matters other than law like facts may have no binging force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence.

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 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.

In another judgement pronounced on 02-03-2020 by the Supreme Court in Dr. Shah Faesal and Others Versus Union Of India and another [(2020) 03 SC CK 0001 ] it was emphasized by the Apex Court that:
It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution.

The Supreme Court observed in State of Punjab and others versus Surinder Kumar and others [AIR 1992 SC 1593] that a decision is available as a precedent only if it decides a question of law.

In Islamic Academy of Education and Another versus State of Karnataka and Others [ (2003) 6 SCC 697] the Supreme Court observed that:
The ratio decidendi of a judgment has to be found out only on reading the entire judgment. In fact, the ratio of the Judgement is what is set out in the Judgement itself. The answer to the question would necessarily have to be read in the context of what is set out in the Judgement and not in isolation. In case of any doubt as regards any observations, reasons and principles, the other part of the Judgement has to be looked into. By reading a line here and there from the judgment, one cannot find out the entire ratio decidendi of the judgment.

In Siddharam Satlingappa Mhetre Versus State of Maharashtra and Others [(2011) 1 SCC 694 ] it was observed by the Apex Court that the judgment of a larger strength is binding not only on a judgment of smaller strength but the judgment of a co-equal strength is also binding on a Bench of Judges of co-equal strength.

The Supreme Court explained the per incuriam in Narmada Bachao Andolan Versus State of Madhya Pradesh and Another [2011 (7) SCC 639 ] stating that "per incuriam" are those decisions given in ignorance or forgetfulness of some statutory provision or authority binding on the Court concerned, or a statement of law caused by inadvertence or conclusion that has been arrived at without application of mind or proceeded without any reason so that in such a case some part of the decision or some step in the reasoning on which it is based, is found, on that account to be demonstrably wrong.

In State of Uttar Pradesh and another versus Synthetics and Chemicals Ltd. and another [(1991) 4 SCC 139] it was observed that a decision which is not expressed and is not founded on reasons, nor it proceeded on consideration of issue, cannot be deemed to be a law declared to have binding effect as is contemplated by Art. 141.

The learned Judge further observed that any declaration or conclusion arrived at without application of mind or proceeded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent.

Conclusion:
The decisions of the Supreme Court have binding force upon all subordinate courts under Article 141 of the Constitution subject to above mentioned rules (i.e. Obiter-Dictum, Ratio-Decidendi, Stare decisis, Per incuriam Prospective Overruling and Legislative provisions etc.).

The casual remarks of the judges, which are outside the ambit of operative part of the decision may not have binding force upon the subordinate courts. Ratio-decidendi which is the determining point of the merit of the case shall be followed by subordinate courts in similar type of cases.

The Supreme Court is not bound by its own decisions, hence, it may depart from its own previous rulings in extra ordinary or special cases or in larger public interest. The judgement delivered ignoring the existing statute or earlier precedents shall also not be binding upon the subordinate courts. The Supreme Court can overrule the previous precedents and may create a new precedent.

The Parliament may also curtail the effects of precedents, established by the Supreme Court, by passing a statutory law. A contrary view of a larger bench shall prevail over the decision of a smaller bench. The judgements of the Supreme Court based on specific facts does not operate as a precedent for future cases and only the principles of law that emanate from a judgment of this Court, which have aided in reaching a conclusion of the problem, are binding precedents within the meaning of Article 141. Thus, Article 141 of the Constitution of India imposes a binding authority upon all subordinate courts within India to consider the judgements of the Supreme Courts as declared law.

Written By: Kapil Kishor Kaushik, Advocate