The judge may go on to speculate about what his decision would or might have been if the facts of the case had been different. This is an obiter dictum.
The binding part of a judicial decision is the ratio decidendi. An obiter dictum is not binding in later cases because it was not strictly relevant to the matter in issue in the original case. However, an obiter dictum may be of persuasive (as opposed to binding) authority in later cases.
A difficulty arises in that, although the judge will give reasons for his decision, he will not always say what the ratio decidendi is, and it is then up to a later judge to “elicit” the ratio of the case. There may, however, be disagreement over what the ratio is and there may be more than one ratio.
In a judgement delivered by a court, what part is a binding precedent is relevant so as to be precise as to what is ultimately biding proposition to other courts. What the court decides generally is ratio decidendi or rule of law which it is authority. As against persons not parties to suit or proceeding general rule of law i,e ratio decidendi is binding . The rule of law or ratio decidendi is that what is applied and acted upon by the Court . The rules of law or ratio decidendi are developed by courts and are thus creatures of courts. The ratio has to be developed by judges while deciding cases before them. Statement made by judges when giving lectures are statements made in extra judicial capacities and are therefore not binding. In the course of judgement a judge may make observations not precisely relevant to deicide the issue. These observations are obiter dicta and are having no binding authority but are none the less important. These obiter dicta are helpful to rationalize law only to suggest solutions to problems not yet decided by the Court. Any ratio decidendi are amenable to distinction on different facts and thus where the meaning thereof are widened , restricted, distinguished or explained , the latest interpretation of ratio decidendi in later cases becomes authority to these state of facts and in that sense. The rule of law based on hypothetical facts is mere obiter dicta and thus not binding.
Not infrequently it is difficult to find out what is the ratio decidendi in the judgement when several propositions are considered by the Court. In short ratio is general rule without which the case would have been decided otherwise.
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.
The Regional Manager and another v. Pawan Kumar Dubey, AIR 1976 SC 1766:; 1976(3) SCC 334.
The general observations therein should be confined to the facts of those cases. Any general observation cannot apply in interpreting the provisions of an Act unless the Court has applied its mind to and analysed the provisions of that particular Act.