The Bench noted that although there are many judgments on the distinction between ratio decidendi and obiter dicta, two verdicts hold the field, namely, State of Gujarat v Utility Users’ Welfare Association andJayant Verma v Union of India.
The first judgment in Utility Users applies what is called, “the inversion test” to identify what is the ratio decidendi in a judgment, the Court said.
“To test whether a particular proposition of law is to be treated as the ratio decidendi of the case, the proposition is to be inversed, i.e. to remove from the text of the judgment as if it did not exist. If the conclusion of the case would still have been the same even without examining the proposition, then it cannot be regarded as the ratio decidendi of the case.”
In the Jayant Verma judgment, the Court held that it is not the findings on material facts, but the statements of the principles of law applicable to the legal problems disclosed by the facts, which are the vital elements of the decision and operates as precedent.
Source: Barandbench
