Business Management · Sources of Indian law and valid contracts

Sources of Indian Law: Constitution, Statute, Precedent and Custom

Updated 11 October 2026 · Fact-checked

The sources of Indian law are the Constitution, statutes passed by Parliament and State Legislatures, delegated legislation (rules and regulations made under an Act), case law and binding precedent, and customs and personal laws. In an exam, name the source, state its authority and say how it ranks against the others.

Understand Sources of Indian Law

A source of law is the place a rule gets its legal force from. When you ask "is this binding?", you are asking which source it comes from and whether that source has authority.

The Constitution of India is the highest source. It sets up the Union and the States, divides law-making powers between them, and guarantees fundamental rights. Any law that conflicts with the Constitution can be struck down by the High Courts or the Supreme Court.

Statutes (Acts) are laws passed by Parliament or a State Legislature within the powers the Constitution gives them. The Indian Contract Act, 1872 and the Actuaries Act, 2006 are examples. Parliament often cannot write every detail. So an Act authorises the Central Government, a regulator or a body to make detailed rules. This is delegated legislation: rules, regulations, notifications and orders made under power given by an Act. It is valid only if it stays within that power (intra vires) and does not conflict with the parent Act or the Constitution.

Case law is law made through court judgments. India follows the common law approach of precedent. The Supreme Court's decisions on law are binding on all courts in India. A High Court's decisions bind the courts below it in its own territory and are persuasive elsewhere. The binding part is the ratio decidendi (the legal reasoning needed for the decision). Remarks made in passing are obiter dicta and only persuade.

Custom and personal laws are further sources. A custom must be ancient, certain, reasonable, continuous and not against statute or public policy to be enforced by courts. Personal laws govern matters like marriage, succession and adoption for different communities, and they are mostly outside business contracts. For actuarial work, statutes, delegated legislation and case law matter most.

Key rules to remember

Hierarchy of sources: Constitution > Statute > Delegated legislation; A lower source is invalid if it conflicts with a higher one. Delegated legislation must stay within the parent Act.
Binding precedent: Supreme Court binds all courts; High Court binds subordinate courts in its State; A High Court decision from another State is only persuasive.
Ratio vs obiter: Ratio decidendi = binding; obiter dicta = persuasive; Only the reasoning essential to the decision is binding.
Test for delegated legislation: Valid if intra vires the enabling Act and the Constitution; If it exceeds the power given, courts can declare it void (ultra vires).
Test for a valid custom: Ancient + certain + reasonable + continuous + not against statute or public policy; Custom must be proved by the person relying on it.

How to solve Sources of Indian Law questions

Use this method for any question on sources of law, whether it is a definition, a comparison or a short scenario.

1Identify what the question asks: name a source, compare two sources, or test whether a rule is valid.
2Name the source involved: Constitution, statute, delegated legislation, case law, or custom and personal law.
3State in one line where that source gets its authority.
4Place it in the hierarchy and say what happens if it conflicts with a higher source.
5For precedent, say which court decided the case and which courts it binds. Separate ratio from obiter.
6Apply the point to the facts given, using the exact terms: intra vires, ultra vires, binding, persuasive.
7Close with a one-line conclusion that answers the question directly.

Quickest way: Source, authority, rank

When to use it: Use this for multiple-choice questions and short written parts where time is tight.

Spot the clue word: Act or Parliament means statute; rules, regulations or notification means delegated legislation; judgment means case law.
Ask who made it and under what power.
Check the rank: Constitution first, then statute, then delegated legislation.
For courts, ask whether the deciding court sits above the court now hearing the case.
Eliminate options that call a persuasive source binding, or call a lower source superior.

Common mistakes in Sources of Indian Law

Treating delegated legislation as a separate, equal source to statute.
Both are written rules, so they look alike.
Fix: Remember it derives its power from an Act. It can be struck down if it goes beyond that Act.
Saying every court judgment binds all courts.
Students ignore the court hierarchy.
Fix: State which court decided it. Supreme Court binds all courts; High Court binds only courts below it in its State.
Calling all parts of a judgment binding.
The ratio and obiter distinction is skipped.
Fix: Only the ratio decidendi is binding. Obiter dicta are persuasive.
Assuming custom overrides a statute.
Custom is described as an old and strong source.
Fix: A custom cannot be enforced if it conflicts with a statute or public policy.
Confusing statutory law with case law.
Courts interpret statutes, so the two blur.
Fix: Statute is made by a legislature. Case law is made by courts in deciding disputes, including how they interpret statutes.
Saying Parliament can pass any law.
Parliamentary supremacy from other systems is assumed.
Fix: Parliament acts within the Constitution. Courts can strike down laws that go beyond its powers or violate fundamental rights.

Worked examples

Example 1

A regulator issues regulations under an Act. A firm argues one regulation imposes a duty that the Act does not allow. Explain the legal position.

Show the solution

Identify the source: the regulation is delegated legislation, made under power given by an Act.
State the authority: its force comes only from the enabling Act.
Apply the test: a regulation must be intra vires the Act and the Constitution.
Apply to the facts: if the Act does not authorise that duty, the regulation goes beyond the power given.
Conclude on the effect: a court can declare it ultra vires and void to that extent.

Answer: The regulation is delegated legislation. If it imposes a duty beyond what the enabling Act permits, it is ultra vires and a court can declare it void to that extent. The firm's argument succeeds in that case.

Example 2

Distinguish statutory law from case law in India, with a note on how binding each is.

Show the solution

Define statutory law: law enacted by Parliament or a State Legislature within constitutional powers.
Define case law: law developed through court judgments applying and interpreting the law.
Compare the maker: legislature for statute; courts for case law.
Explain binding force: a statute binds everyone it applies to. A precedent binds according to the court hierarchy, and only its ratio decidendi is binding.
Link them: courts interpret statutes, and their interpretation becomes part of case law.
Note the rank: a statute prevails over a conflicting precedent unless the court finds the statute unconstitutional.

Answer: Statutory law is made by legislatures. Case law is made by courts through judgments. A statute binds generally, while a precedent binds courts according to hierarchy and only through its ratio. A valid statute prevails over conflicting case law.

Exam tips

Learn the hierarchy as a short chain and write it at the start of a longer answer.
Use the exact terms: intra vires, ultra vires, ratio decidendi, obiter dicta. Examiners look for them.
In scenario questions, name the source first, then apply it. Do not just list all sources.
For multiple-choice questions, watch for options that call persuasive sources binding.
Do not cite section numbers or case names unless you are certain of them.

Practice questions from Sources of Indian law and valid contracts

Sources of Indian Law in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Sources of Indian Law: frequently asked questions

What are the main sources of law in India?

They are the Constitution, statutes, delegated legislation, case law and precedent, and customs and personal laws. The Constitution ranks highest. Statutes and delegated legislation follow, and courts apply and develop the law through precedent.

What is delegated legislation in India?

It is law made by a body or authority under power given by an Act of the legislature. Examples are rules, regulations and notifications. It is valid only if it stays within the power the Act gives.

What is the difference between statutory law and case law?

Statutory law is enacted by Parliament or a State Legislature. Case law is created by courts through their judgments. Courts interpret statutes, and those interpretations then form precedent.

Is custom a source of law in India?

Yes, but with limits. A custom must be ancient, certain, reasonable and continuous, and must not conflict with statute or public policy. The person relying on it must prove it.