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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sources of Law

In a judgment, a court's ruling contains the binding reasoning on the legal point decided (ratio decidendi) and also some passing remarks on hypothetical situations not before it (obiter dicta). Which statement is correct about their authority?

Only the ratio decidendi binds lower courts, because it is the legal principle essential to the decision. Obiter dicta are incidental remarks on points not needed for the decision and have only persuasive value. Precedent does operate within the Indian court hierarchy, so neither-binding is wrong.

  1. ABoth are equally binding on lower courts
  2. BOnly the ratio decidendi is binding; obiter dicta are persuasive onlyCorrect
  3. COnly obiter dicta are binding; the ratio is persuasive
  4. DNeither is binding, since precedent has no force in India

Explanation

The ratio decidendi is the legal principle necessary for deciding the case and forms the binding part of a precedent. Obiter dicta are incidental observations and carry only persuasive value. Saying both bind ignores this distinction, and precedent does bind in India's court hierarchy.

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