Observations made by the Supreme Court in a judgment

The Supreme Court, being the custodian and guardian of fundamental rights, is also vested with certain powers that conspicuously flow from the Constitution. One such power vested with the Supreme Court, by virtue of Article 141 of the Constitution, is to declare law of the land.

Article 141 provides that the law declared by the Supreme Court shall be binding on all courts within the territory of India. The law declared has to be construed as a principle of law that emanates from a judgment, or an interpretation of law or judgment by the Supreme Court, upon which, the case is decided.

Hence, the law declared is the principle culled out on reading of a judgment as a whole in the light of the questions raised, upon which the case is decided. [Fida Hussain v. Moradabad Development Authority].

This concept exists in Common Law countries which, in common parlance, is known as the law of precedents. In the absence of codified laws, the concept of law of precedents evolved in England, and was later adopted in Indian law as well. Section 212 of the Government of India Act, 1935 provided that law declared by the federal court and any judgment of the Privy Council shall, as far as applicable, be recognized as binding and shall be followed by all courts in British India. When the Constitution of India was enacted, the law makers inserted Article 141.

In view of the above, it may be noted that a judgment rendered by the Supreme Court is not binding in its entirety. It is only the ratio decidendi part of the judgment which is binding and shall be taken into consideration while deciding questions of law based on identical issues and facts. A consent order, obiter dicta, per-incuriam judgment and sub silentio order are some of the exceptions to this doctrine of law of precedents.

Many a time, we come across judgments of the Supreme Court wherein the Court holds that the case is decided upon special facts and circumstances and the same shall not be treated as precedent. In this scenario, one may very well question whether it is the Court’s prerogative/discretion to make such kind of observation in the absence of any source or clear provision empowering it to do so.

The pivotal issue that needs to be pondered upon for the purpose of this article is whether a judgment of the Supreme Court can be taken as a precedent even though the Court has stated that it shall not be treated as a precedent. Secondly, whether Article 141 also allows the Supreme Court to observe as to which judgment shall have no effect as a precedent even when all the facts, circumstances, and questions of law of another case are on all fours.

Article 141 does not carve out an exception or proviso which allows the Supreme Court to make an observation regarding what shall not be treated as a precedent. Once a judgment is pronounced, the role of the Supreme Court ends there, and Article 141 steps into the picture.

There have been many instances wherein the Court recorded that this judgment would not be a precedent. In D Navinchandra & Co v. UOI, an issue arose before the Bombay High Court as to whether a judgment pronounced by the Supreme Court wherein the Court made an observation that it shall not be treated as precedent in view of the special facts and circumstances available in the case, even when the issues raised before the High Court were identical to the issues raised before the Supreme Court, will be binding. The Bombay High Court held that the judgment passed by the Supreme Court was based on identical facts and circumstances, and despite there being such an observation by the Supreme Court, it shall be treated as precedent.

At this juncture, it is also pertinent to discuss the legal doctrine of stare decisis et non quieta movere, which means “to stand by decisions and not to disturb what is settled” [Shanker Raju v. Union of India]. To put it simply, it binds the courts to follow legal precedents set by previous decisions. This doctrine makes it abundantly clear that legal precedents play a pivotal role in deciding an issue having identical facts and questions of law. This doctrine is an integral part of Common Law and is indispensable.

However, the applicability of the law of precedent and the doctrine of stare decisis do not arise in a case which is merely rejected or dismissed by the Supreme Court in limine. In other words, when the Court merely dismisses a special leave petition without going into the merits of the case, it does not qualify as a binding precedent since it has not been decided on merits.

In Indian Oil Corporation v. State of Bihar, the Supreme Court held that a special leave petition dismissed only by passing a non-speaking order would not preclude a party from knocking the doors of the High Court. Further, if the High Court chose not to entertain it merely because the Supreme Court has dismissed the special leave petition, it shall cause extreme hardship and injustice to such a party.

The Supreme Court has consistently held that a decision which is neither founded on reasons nor proceeds on consideration of issues, cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141 of the Constitution. [State of UP v. Synthetics & Chemicals Ltd]. On the other hand, a case decided after properly appreciating the facts, circumstances, and questions of law involved, is without an iota of doubt, a binding precedent by virtue of Article 141, regardless of the observation that it shall not be treated as precedent.

With utmost gratitude and respect, it can be concluded that Article 141 does not empower the Supreme Court to make an observation that a judgment shall not be treated as precedent when the issues and questions of law involved have been decided in a full-fledged manner. The binding natures of such precedents have become redundant due the observations discussed supra, made by the Apex Court in the absence of any provision empowering the Court to do so.

Also, such observations made by the Court defeat the aim and objective behind the law of precedent and the doctrine of stare decisis, which do not empower or give authority to the Supreme Court to declare a judgment as not a binding precedent. Per contra, a special leave petition dismissed by way of a non-speaking order, which is altogether different than a case decided on merits, is in no way treated as a precedent since the Supreme Court does not consider it a fit case wherein special leave can be granted, and nothing more.

The author is an Advocate practicing before the Supreme Court of India.