Source – Supreme Court

Why in News?

Recently, the Supreme Court (SC) in the case of Experion Developers Pvt Ltd v. Himanshu Dewan and Sonali Dewan, observed that an order dismissing an appeal without any reasons being recorded cannot be treated as a binding precedent.

Background

• The appellant in this case had developed and constructed the apartments in a housing project, namely “Windchants”, situated in Gurgaon, Haryana.
• The respondents are the allottees or the subsequent purchasers/buyers of their apartments.
• In February 2022, the respondents filed a complaint before the National Consumer Disputes Redressal Commission, seeking a refund of the amounts paid by them towards the increased sale area.
• The National commission, while relying upon the decision given in the case of Pawan Gupta v. Experion Developers Private Limited (2018), directed the appellant to refund the amount collected towards excess sale areas.
• Thereafter an appeal was filed by the appellants before the Apex Court.
• The judgment passed by the National Commission was set aside by the Apex Court.

Court’s Observations

• The bench of Justices Sanjiv Khanna, Bela M. Trivedi and Ujjal Bhuyan observed that a precedent operates to bind similar situations in a distinct case and held that the case of Pawan Gupta v. Experion Developers Private Limited (2018) cannot be read as a precedent.
• The Court observed that its order dismissing an appeal without any reasons being recorded cannot be treated as a binding precedent and precedents cannot decide questions of fact
• The Court further held that the law of binding precedents, in terms of Article 141 of the Constitution of India (COI), has a larger connotation as it settles the principles of law which emanates from the judgment, which are then treated as binding precedents.

Legal Provisions

Doctrine of Precedent

• The rule of precedent has been adopted from English jurisprudence into the Indian Constitution.
• Article 141 of the COI deals with the doctrine of precedent.
  • Article 141 stipulates that the law declared by the Supreme Court shall be binding on all courts within the territory of India.
• The doctrine of precedent is a principle of following previous decisions of the Court within its well-defined limits.
• The part of the judgement which constitutes the ratio decidendi of the judgement has a binding effect and not the part of the judgement which constitutes of obiter dictum.
  • The rationale of the judgment is called Ratio Decidendi. Such a principle of law is not only applicable to that particular case but all subsequent similar cases.
  • Obiter Dictum is a mere judicial opinion in a particular case and has no general application.
• In Bir Singh v. Union of India (2019), it was held that the judgment of a decided case is precedent and the same will operates as a binding precedent to all possible contingencies when a similar issue of law arises.

General Principles in Relation to Doctrine of Precedent

• The decisions of the superior courts bind the inferior courts, and they are obligated to follow them.
• The SC is not bound by its own decisions and has the liberty to depart from them if necessary.
• The decision put forth by one high court does not constitute a binding precedent over another.
• The HCs or the other subordinate courts do not have the power to rule out the decisions of the SC.
• Procedural irregularity and immateriality do not invalidate the binding nature of a judgement
• Ex-parte decisions by Supreme Court are also binding in nature and can be used as precedents.
• A Bench with a lesser quorum cannot dissent from the decisions of a larger quorum.
• Procedural irregularity and immateriality do not invalidate the binding nature of a judgement