When we say that a judicial decision is binding as a precedent, what we really mean is that a rule or principle formulated and applied in that decision must be applied when similar facts arise in future. This rule or principle is the ratio decidendi which is at the centre of the doctrine of precedent. The expression ratio decidendi has different meanings. The first meaning which is the literal translation of the expression is ‘the reason for deciding’. Ratio decidendi is as ‘the rule of law proffered by the judge as the basis of his dicisions.
According to Salmond: A precedent is a judicial decision which contains in its a principle. The underlying principle which thus form its authorative element is often termed the ratio decidendi. The concrete decision is binding between the parties to it but it is the abstract ratio dicidendi which alone has the force of law as regard the world at large.
It is a legal phrase which refers to the legal, moral, political, and social principles used by a court to compose the rationale of a particular judgment. Unlike obiter dicta,the ratio decidendi is, as a general rule, binding on courts of lower and later jurisdiction—through the doctrine of stare decisis. Certain courts are able to overrule decisions of a court of coordinate jurisdiction—however, out of interests of judicial comity, they generally try to follow coordinate rationes.
The process of determining the ratio decidendi is a correctly thought analysis of what the court actually decided—essentially, based on the legal points about which the parties in the case actually fought. All other statements about the law in the text of a court opinion—all pronouncements that do not form a part of the court’s rulings on the issues actually decided in that particular case (whether they are correct statements of law or not)—are obiter dicta and are not rules for which that particular case stands Ratio Decidendi is the binding part for the case at hand. Goodheart- He does not accept the classical view that ratio is the principle of law which links the essential determination of the case with the essential or material facts of it and the statement of the judge may or may not do that or may be formed too widely or too narrowly. It is the general ground upon which the decision is based- Supreme Court of India How to ascertain Ratio Decidendi Krishna Kumar v. Union of India- AIR 1990 SC 1782 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 law either statutory or judgment and minor premise consisting of the material facts of the case under immediate consideration. Therefore, we find that it is the ratio decidendi which is a binding precedent. Other material part is the Obiter Dictum.
Process of Reasoning–
- Major Premise
- Minor Premise
In Union of India v. Maniklal Banerjee Only ratio decidendi is binding and has precedent value.
State of Orissa v. Sudhanshu Shekhar Mishra– A decision is an authority for what it decides and not for what can logically be deduced from it. The only thing in a judge’s decision binding a party is the principle upon which the case is decided. On our analysis, we have to isolate the ratio of the case. A decision contains:
- Finding of Material Facts- Direct and inferential
- Statement of the principle of law applicable to the legal problem disclosed by the facts.
- Judgments based on the combined effects of the above two.
Ratio Decidendi is a statement of law applied to the legal problems raised by the facts as found upon which the decision is based. Dalveer Singh v. State of Punjab Though we are able to find out the ingredients from the decision. But later on, when there is a similar situation, it is very difficult for him to apply the ratio in that case because a rigorous division of facts has to be made which is not possible. It is correct that a decision on a question of sentence depending upon the facts and circumstances of a case can never be regarded as a binding precedent, much less ‘law’ declared under article 141 of Constitution of India so as to bind all law courts within the territory of India. \
Minerva Mills v. Union of India “If a provision is uphold by the majority, the fact that the reasoning of some of the judges is different from the ratio of that case will not affect its validity”.
 AIR 2006 SC 2844
 AIR 1968 SC 647
 1979 3 SCC 745
 AIR 1980 SC 1789