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Radio Decidendi and Common Cause v. Union of India 1
by Dr A.R. Biswas, M.A. LL.M. PH.D.

Cite as : (1987) 4 SCC (Jour) 25

Justinian issued a mandate: "Cases should be decided on the basis of laws, not precedents."2 This still governs the Civil Law Countries, where judicial precedent is not considered a formal source of law. Here codes are the chief source of law and Judges are to respect them. In contrast to this stands the Anglo-American legal tradition, where judicial precedents are regarded as formal sources of law. However, a precedent is considered a less authoritative source of law than a statute. The term commonly used for the doctrine of precedent is called stare decisis. This is an abbreviation of the Latin phrase, stare decisis et non quieta movere (to stand by precedents and not to disturb settled points). Generally speaking stare decisis means that a point of law once settled by a judicial decision is not to be departed from. In other words, an earlier case when directly in point must be followed in a subsequent case.

I. The binding authority

A court is bound by statute or by the decisions of superior courts. The 'doctrine of the case' or ratio decidendi as it is called immortalises a case and it differs from ratio legis or the reason behind the law. Now, ratio legis applies to statutory law and the ratio for a statute may be social or economic. Thus the reason behind the Child Marriage Restraint Act, 19 of 1929 is social, whereas that behind the Monopolies and Restrictive Practices Act, 54 of 1969 is economic. However, these reasons though stated in the preambles of the Acts do not affect the operation of the enactments. It is here that the ratio decidendi differs from ratio legis. A decision involves a legal principle, but the application of a statute is not concerned with the reasons given for its enactment. Judges do not enquire what the legislature means, but only ask what the statute means. Here one has to consider the maxim, cassante ratione legis, cessat ipsa lex3 (the reason of the law ceasing, the law itself ceases). It does not apply to statute law, since the statute continues to exist until it is repealed by another statute. On the other hand, when the principle behind a decision disappears, the decision ceases to be authority and no judge is bound to follow it.

On the Continent of Europe the authoritative sources of law are statutes and customs. However, they can never cover every possible case. Hence, courts are called upon to fill the gaps in law; a decision can become an authority only if followed in other cases. This is how a customary rule of law is established. Thus Article 4 of the French Civil Code runs thus: "The judge who shall refuse to give judgment under pretext of the silence, of the obscurity, or of the inadequacy of the law, shall be subject to prosecution as guilty of a denial of justice." And Article 1 of the Swiss Civil Code of 1907 says: "The statute governs all matters within the letter or spirit of any of its mandates. In default of an applicable statute, the Judge is to pronounce judgment according to the customary law, and in default of a custom according to the rules which he would establish if he were to assume the part of a legislator. He is to draw his inspiration, however, from the solution consecrated by the doctrine of the learned and the jurisprudence of the courts." Here Austin notices a point of distinction between the Continental and English views on customary law. In England customary law is nothing but judiciary law based on anterior custom and custom is regarded as binding because it is a part of Judge-made law. On the other hand, the judiciary law of the Continent is binding because it is the evidence of a customary law.4

India follows the English practice. Courts are imperatively bound by decisions of higher courts in the hierarchy. At the apex stands the Supreme Court. Under Article 141 of the Constitution of India the law declared by the Supreme Court is binding on all courts in India. It is empowered also to give advisory opinion under Article 143. Besides, Article 145 confers on the Supreme Court rule-making powers. Similarly the High Courts are empowered under Article 227. From these provisions and the framework of the hierarchy the rules binding one court to another by way of subordination are deduced. Thus Section 3 of the Code of Civil Procedure, 1908 provides that a District Court is subordinate to the High Court and every Civil Court inferior to a District Court and every Court of Small Causes is subordinate to the High Court and the District Court. The Code of Criminal Procedure, 1973 also makes similar provisions with regard to the jurisdiction of Sessions Judges and Magistrates. The decision of a superior Court is binding on an inferior court and not the other way round. A Single Judge must follow the decision of a Division Bench5 and the latter must follow a Full Bench decision of the same Court.6 As observed by Subba Rao, C.J. of the AP High Court in Subbarayudu v. State7: "A Single Judge shall not differ from the judgment of another Judge of the Court. If he does not agree he shall refer the matter to a Bench of two Judges. He is bound by the decision of a Divisional Bench exercising appellate jurisdiction. If there is a conflict of Bench decisions, he should refer the case to a Bench of two Judges who may refer it to a Full Bench. A Single Judge cannot differ from the Divisional Bench unless a Full Bench or the Supreme Court has overruled that decision specifically or laid down different law on the same point. A Divisional Bench must ordinarily respect another Divisional Bench but if it differs the case should be referred to a Full Bench." All these provisions relate to "absolutely authoritative" precedents.

The second category is that of "conditionally authoritative" precedents. They are ordinarily binding on the Court before which they are cited, but are liable to be disregarded in certain circumstances. Thus the decision of a Single Judge of a High Court is absolutely authoritative on the subordinate Courts, but is conditionally authoritative if cited before a Division Bench of the same High Court. This disregard may take either of the two forms — overruling or dissenting — according as the disregarding court is one of superior jurisdiction or of co-ordinate authority. Thus the decision of a Single Judge of the High Court is only conditionally authoritative and may be dissented from by another Single Judge or overruled by a Division Bench. However, a Division Bench cannot dissent from another Division Bench decision. The correct rule on the point has been laid down by Sir Lionel Leach in Seshamma v. v. N. Rao8 thus: "While a Judge of a High Court sitting alone is not bound on a question of law by the decision of another Judge sitting alone, this principle goes no further. The Division Bench is thefinal court of appeal in an Indian High Court unless the case is referred to a Full Bench, and one Division Bench should not regard itself bound by the decision of another Division Bench on a question of law. If a Division Bench does not accept as correct the decision on a point of law of another Division Bench, the only right and proper course to adopt is to refer the matter to a Full Bench." Where a Full Bench takes a view contrary to that of another Full Bench of equal strength the matter should be referred to a larger Bench9

A third category of precedents is called "persuasive". And this is not a legal source of law — it may be styled a historical source of law. All the same it is entitled to high respect and may be followed by a court if its reasoning commends itself as sound and cogent. Thus the decisions of one High Court are only persuasive precedents in other High Courts. To this category belong the rulings of English and American courts. It is said that a previous case is binding only as to its ratio decidendi and the ratio is distinguished from obiter dicta which do not bind. Thus obiter dicta have persuasive influence. An obiter dictum is always something said by a judge. In the words of Lord Campbell in Attorney-General v. Dean and Canons of Windsor10: "Observations made by members of the House (of Lords) beyond the ratio decidendi may be entitled to respect (but) are only to be followed insofar as they may be considered agreeable to sound reason and to prior authorities."

Finally, Article 141 of the Constitution uses the words "all courts", that is, the courts other than the Supreme Court.11 And the Supreme Court is thus free to depart from a prior decision of the court. However, it does not mean that it would readily do so on every case: "Accepting that this Court is not bound by its own decisions and may reverse a previous decision, the Court will surely be slow to do so unless such previous decision appears to be obviously erroneous."12 This finds an echo in the announcement in England on July 26, 1966 by the House of Lords that it would no longer be absolutely bound by its own decisions: "Their Lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. (Since) too rigid adherence to precedent may lead to injustice in a particular case and unduly restrict the proper development of the law, they propose to modify their present practice and to depart from a previous decision when it appears right to do so."13

II. The Ratio Decidendi of a case

What is "law" in a precedent is its ruling or ratio decidendi in respect of instant and future litigants. And knowing the law in this context means knowing how to extract the rationes decidendi from cases. The expression, ratio decidendi is "the reason for (or of) deciding".14 The word "decision" has four shades of meaning. First, it may mean the ultimate order made by the Court to determine the case and on the strength of this one party or another may seek execution. Second, it may refer to the whole case. Third, it may mean the determination of a particular issue. Fourth, it may refer loosely to the reason for reaching such a determination. And G.W. Paton prefers the third meaning, that is, the decision of any issue in the course of judicial proceedings.15 In this context, "order" refers to the final order made by the court and binding the parties to the proceedings, while "judgment" refers to the reasons given by the judgment to explain and justify its order.16

The expression ratio decidendi is normally used to refer to some binding rule found in decided cases, which a later court cannot generally question. And a defining technique is to elucidate the judicial power to make binding rules and a rule made within the ambit of this power will constitute the ratio of the case. There is thus a distinction between the rule-making of Judges which is intra vires a power to make binding rules and the rule-making of Judges which is ultra vires this power. But there is an important limitation on the rule-making power vested in Judges. And this is the principle which denies them the power to make binding rules unless they are relevant to the determination of actual litigation before the court. In the wake of this connection came a corollary, namely, a principle reducing the importance of communications of the law delivered by Judges, either accidentally or deliberately upon hypothetical issues. As a result obiter dicta grew up — they are in a sense ultra vires enunciations of law. The distinction between ratio decidendi and obiter dictum is in essence a distinction between relevance and irrelevance.

A rule-making power may have two limitations, formal or substantial. They may restrict the way in which rules are made and they may also restrict what rules are made. And a Judge's power is subject to both kinds of limitation. However, ratio deddendi has only a formal limitation, namely, that a rule acted upon in court can rank as a binding rule. Of course, there may be an exception, for example, the per incuriam rule. The fact that the rule has been acted upon is the hallmark of relevance. And this is expressed in a variety of ways, e.g. "the rule applied", "the reason for the decision", "the basis of the decision". Here one may notice the difference between the rule-making procedure of Parliament and the case-law. The former operates on a text, while the Judges in case-law do not draft the rules to act upon. And Judges decide cases by acting upon rules. The minimum required for a Judge to act upon a legal rule consists of three things: (a) he should have a rule in mind while deciding to act, without a precise formulation of a rule; (b) he decides that the rule is applicable, that is, some fact or set of facts should be subsumed under the rule; and (c) his conduct should conform to the prescriptions of the rule. In the judicial process the Judge should show that he is acting upon a rule. It should be remembered that case-law rules are incomplete: Judges do never claim completeness for the statements of rules and exceptions. The reason why a Judge enunciates the rule of law to act upon is that the rule justifies his action. But this must be a rule acceptable as a rule of the legal system.17

In Osborne v. Rowlett18 Sir George Jessel says: "The only thing in a Judge's decision binding as an authority upon a subsequent Judge is the principle upon which the case was decided." This brings out the distinction between the binding nature of a decision on a particular issue and the binding nature of a principle "upon which the case was decided". The former is precise, while the latter is not. Ordinarily such precise decisions are supported by a course of reasoning which establishes a general principle of law used by the court to justify its decisions. This principle is called the ratio decidendi of the decision. And its binding nature is of a different kind. Unfortunately Paton uses "proposition" in place of "principle": "A course of reasoning establishes a general proposition of law (for the court) to justify its decision."19 And this is not correct. The distinction between a "principle" and a "proposition" may be likened to that between a "propositional function" and a "proposition". In the words of Bertrand Russell: "A propositional function is any expression containing an undetermined constituent or several undetermined constituents, and becoming a proposition as soon as the undetermined constituents are determined. If I say 'X is a man' that is a propositional function."20 If we substitute "Robinson" for X in "X is a man", then "Robinson is a man" expresses a true proposition. Russell explains this in his Principia Mathematica thus: "By a 'propositional function' we mean something which contains a variable X, and expresses a proposition as soon as a value is assigned to X. That is to say, it differs from a proposition solely by the fact that it is ambiguous: it contains a variable of which the value is unassigned. The values of the function are propositions."21 Since propositions of law are akin to rules of law, Ronald Dworkin distinguishes between "principles" and "rules" in two ways. First, principles differ from rules in the character of the direction they give — while rules are applicable in an all-or-nothing fashion, principles State "a reason that argues in one direction but (do) not necessitate a particular decision". Second, principles have a dimension of weight or importance which rules do not.22

No Judge ever lays down any general proposition of law and therefore one has to discover or abstract a ratio or principle from the facts of the case decided. Hence with the introduction of new facts, an extension of the ratio or principle takes place, though the authority of the previous cases is not thereby disavowed. And in this way the case-law has developed from precedent to precedent so as to keep pace with the changing needs of society. Markby realised this flexibility while speaking about the "judiciary law". He said: "Were the judges in England compelled, as in Italy, France and Spain to State separately and fully what French lawyers call the motives, and Spanish lawyers the points of their decisions — their findings in fact and the rules of law — there would be a complete revolution in the history of English case-law. The law being stated in distinct propositions, altogether separate from the facts, would be easily ascertained. This, coupled with our notions as to the authority of prior decisions, would render a conflict almost impossible. The law would soon become clear and precise enough; but so far as judicial decision was concerned, it would become much more rigid. It is because English Judges are absolved from the necessity of stating general propositions of law and because, even when these are stated, they are always read as being qualified by the circumstances under which they are applied, that our law remains bulky and uncertain, but has also, in spite of our respect for precedent, remained for a long period flexible." 23

III. How to determine the ratio

Since the ratio decidendi of a case has the nature of a propositional function, it is variable and becomes elusive. And jurists have even been in search of it. Any legal system using precedent has to consider the way in which they are relevant. To this end the relevancy is found in the fact that decisions involve some principle of general application. But the question is: how is this to be ascertained? Classical theory has regarded the binding part of a decision as the legal principle formulated.24 But A.L. Goodhart raises objections to this. According to him the ratio decidendi is controlled by the relation between "the material facts" of the case and the holding on these facts. While the ratio consists of the very reasoning necessary to explain the holding on "the mateiial facts" found by the precedent judge, he suggests that the better way to approach the problem is to elucidate the ratio of a case from the facts themselves rather than from the principle enunciated by the Court.25 Julius Stone challenges Goodhart and distinguishes between "descriptive" and "prescriptive" ratio decidendi to conclude that facts may be of many possible "levels of generalisation". Descriptively the phrase imports an explanation of the court's reasoning to its conclusion based on sociological, historical and even psychological inquiry. And the finding from such an inquiry is true or untrue as a matter of fact. This may be sought at various levels. Prescriptively the phrase refers to a normative judgment, requiring us to choose a particular, that is, binding ratio decidendi. In other words, Stone's argument is that Goodhart's theory yields indeterminate results because the "principle" derivable from a case by the Goodhart method of "material facts plus decision" is entirely dependent on the level of generality at which one chooses to describe the facts.26

In this context R. Cross defines "the ratio decidendi of a case" as "any rule of law considered necessary by the Judge for the decision of the case: it is that part of the decision which has binding effect and the facts of the case play a large part in its identification".27 Hence, all other statements of law are obiter dicta. Now, the word "necessary" is used in the sense of "essential to the working of a judicial system". It seems Cross supports Goodhart. And a binding principle may be sketched as follows.28 Where the facts are a, b, c, d, e, g and a reported decision is P, the decision is said to be based on the rule that whenever A, B, C then X should be decided. Here the lower case letters stand for the particular circumstances of the case and capital letters for general properties of facts so that a is an instance of A, etc. Thus the ruling in P can be summarised as:

P: a, b, c, d, e, g/A.B.C X.

The novel case, N, is a case of a1, b1, c1, 1, (i.e. not — e1), f1 and it is governed by P, which is binding on the court. Now, in case the court decides to follow P, its ruling will be:

N: a1, b1, c1, d1, 1, f1, /A.B.C X.

In spite of some difficulties Goodhart's definition of ratio decidendi may be taken as a working rule. According to him the ratio is equated with the material facts of the case plus the decision thereon. And the rules for finding the ratio or principle may be summed up as follows:

(1) The principle of a case is not found in the reasons given in the opinion.

(2) The principle is not found in the rule of law set forth as the opinion.

(3) The principle is not necessarily found by a consideration of all the ascertainable facts of the case, and the Judge's decision.

(4) The principle of the case is found by taking account

(a) of the facts treated by the Judge as material, and

(b) his decision as based on them.

(5) In finding the principle it is also necessary to establish what facts were held to be immaterial by the Judge, for the principle may depend as much on exclusion as it does on inclusion29

Goodhart himself mentions that his definition suffers from two infirmities. The first is that the facts are "infinitely various", though the material facts are strictly limited. Thus the consideration in a contract is a single material fact but the kinds of consideration are unlimited. Secondly, it may happen that the facts, stated by the Judge to be real and material, can be actually non-existent. This is a hypothetical case. It may be pointed out that the whole doctrine of precedent is based on the theory that generally Judges do not make mistakes either of fact or of law. In other words a decision given per incuriam is an exception that confirms the general rule. A case may be wrongly decided or decided for the wrong reason. As pointed out by Simpson: "The ratio of a case is only binding if it is not inconsistent with statute, or inconsistent with the ratio of another decision30".

Now cases may differ according as they contain a single opinion or several opinions. The determination of the ratio decidendi becomes easier if there is only a single opinion or all the opinions are in agreement. In case the several judgments agree in the result, but differ in the material facts on which they are based the principle is limited to the sum of all the facts considered material by the various judges. Thus a case involves facts A, B and C and the defendant is held liable. The first judge finds that fact A is the only material fact, the second that B is material, the third that C is material. The principle of the case is therefore, that on the material facts A, B and C the defendant is liable. If, however, two of the three judges had agreed that fact A was the only material one and that the others were immaterial, then the case would be a precedent one on this point, though the third Judge had held that the facts B and C were material ones. This may sound too mechanical and may be seen in the case of Golak Nath v. State of Punjab31, as decided by the Indian Supreme Court.

Five judgments were delivered in the Golaknath case by (1) the Subba Rao block of Subba Rao, C.J., Shah, Sikri, Shelat and Vaidialingam, JJ.; (2) Hidayatullah, J.; (3) the Wanchoo block of Wanchoo, Bharagava and Mitter, JJ.; (4) Bachawat, J; and (5) Ramaswami, J. They may be reduced to three if the joint dissenting judgments of the Wanchoo block are equated with the separate dissenting judgments of (4) and (5). And the position would be like this: the Subba Rao block of five; the Wanchoo block of five; and the lone judgment of Hidayatullah, J. Six propositions seem to have been laid down by the judgments as follows: (a) Parliament cannot amend Part III of the Constitution of India so as to "take away or abridge" the fundamental rights; (b) all amendments made prior to February 27, 1967 and affecting fundamental rights other than the "right to property" have full validity; (c) the effect of the first, fourth and seventh amendments on the "right to property", though made prior to February 27, 1967 remains valid and operative as part of the law of India; (d) the seventh amendment to Article 31-A(2) is similarly valid and operative; (e) the seventeenth amendment expanding the list of statutes in the Ninth Schedule is similarly valid and operative; and (f) the impugned land reform legislation of Punjab and Mysore (Karnataka) is wholly valid. It is interesting to note how these propositions are established, (a) is held by the majority comprising (1) and (2); (b) is held by (2) only, though it necessarily follows from the view of the Wanchoo block comprising (3), (4) and (5); (c), (d) and (f) are held unanimously; and (e) is held by ten Judges with Hidayatullah, J. dissenting. And the question is how to extract a single ratio out of these judgments. The answer is that the tangle of five separate judgments cannot possibly yield any single ratio. As observed by R. Cross: "The ratio decidendi is a conception peculiarly appropriate to a single judgment. Accordingly, it is probably impossible to avoid something in the nature of arbitrary rules to meet cases in which several judgments are delivered. The main trouble is that it is impossible to formulate these rules with anything like complete precision."32

Three approaches may be considered in this connection. The first approach takes the phrase itself as a sufficient guide to the ratio. Thus in the Golaknath case one is to look for those propositions of law which were necessary and sufficient to base the "declaration" made by the Supreme Court. Article 141 uses the expression "declared" and this is explained by Subba Rao, C.J. thus: "The expression 'declared' is wider than the words 'found or made'. To declare is to announce opinion. Indeed the latter involves the process, while the former expresses result. Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law. The law declared by the Supreme Court is the law of the land."33 And what was necessary for the decision was the conjunction of the reasons given either (i) by the 5-man Subba Rao block and the 5-man Wanchoo block; or (ii) by the 5-man Subba Rao block and by Justice Hidayatullah; or (iii) by the 5-man Wanchoo block and by Justice Hidayatullah. On any of these hypotheses, two sets of reasons would be necessary; and the one wholly immaterial and this might be any one of the three. The Wanchoo block was in a minority in regard to proposition (a) and this does not mean that its reasons were not "necessary to the decision". However, these reasons can be ignored only on the ground that there was sufficient majority to base the decision without them. But this equally applies to either of the two sets of "majority" reasons. The result is that the first supposed test of the ratio decidendi would lead to an insoluble choice amongst three pairs of sets of reasons with each pair comprising two different sets of ideas. In practice, of course, the choice is not wholly insoluble. It is evident that the reasons of the Wanchoo block are inconsistent with those of either the Subba Rao block or Justice Hidayatullah. But the last two reasonings are not necessarily inconsistent. Their compatibility tends to assume that these two judgments form the source of the ratio. Here one may hold with Chief Justice Centlivres in the South African case of Fellner v. Minister of the Interior34, that even if a case has no apparent ratio decidendi, the actual "decision" is "binding". In the narrowest sense of "decision", this gives binding force only to proposition (f); but on a wider meaning of "decision" all the propositions are binding.

The second approach may be formulated in terms of "counting heads". Here one simply adds up the number of Judges giving the propositions. Of course, the search is for a majority of the participating judges. Let us take a case with four views, p, q, r and s and in a court of 11 Judges — p is supported by 4 judges, q and r by 3 each, and s, by the remaining one. On a strict version of "counting heads" none of the four views would be established, since none had a clear majority. On the looser version p had more support than any of the others and it would be part of the ratio. But this violates Article 145(5) of the Indian Constitution, requiring that the "judgment" and "opinion" need be "delivered with the concurrence of a majority of the Judges present at the hearing of the case". As observed by Greenbery S.A. in the Fellner case: "The object of the enquiry is to ascertain what is the ratio decidendi and not what are the opinions of Judges. Insofar as the law is built up by judicial (precedent), it is not built up on a counting of heads of all the members of the Court. It is in the reasons of the majority of the Court for the order that the ratio decidendi is to be sought, the reasons of the dissenting Judges being irrelevant for this purpose"35 In this context, "counting heads" in its looser version would help us only as to the acceptance of "prospective overruling".

The third approach may be termed "the majority of the majority". If the Golaknath decision is proposition (a), it is supported by 6 of the 11 Judges and 5 support it for identical reasons. By equating the ratio with the reasons given by "the majority of the majority", Golaknath is confined to the single judgment delivered by Chief Justice Subba Rao with Justice Hidayatullah concurring with him. And the difficulties involved in extracting a ratio from Golaknath lead one to prefer a pragmatic approach to precedent — construction to rationes36

IV. Analysing of the "Common Cause"

The "Common Cause" is a registered Society. Under Article 32 of the Indian Constitution the Common Cause and three retired government servants asked for striking down certain provisions of the Commutation of Pension Rules applicable to civilian and defence pensioners, since they permit the Union of India to recover more than what is paid to the pensioners upon commutation. Besides, the petitioners sought for a direction asking the Government to rationalise its scheme of commutation. The Single Judge of theSupreme Court has delivered two judgments — one relating to the civilian employees and the other relating to the defence personnel — and tried to make it a single judgment. During the course of the hearing the Union Government agreed to restore the commuted portion of the pension in respect of "all civilian employees at the age of 70 years or after 15 years whichever is later". The facts are: (1) commutation makes available a lump sum to a pensioner; (2) there is the risk factor involved in case the pensioner dies before full recovery; (3) some Governments including State and Union have formulated a 15-year rule for restoration of the commuted pension; and (4) the 15-year formula is not justifiable because it permits recovery of more than the dues. The court has considered facts (1), (2) and (3) as material and ignored fact (4) in coming to the decision that restoration would take place on the expiry of 15 years from retirement. But this decision is given per incuriam, since it abets "unjust enrichment" banned by Section 70 of the Indian Contract Act, 1872. As observed by Gajendragadkar, J. of the Supreme Court in State of West Bengal v. B.K. Mondal37: "What Section 70 prevents is unjust enrichment and it applies as much to individuals as to Corporations and Government." In this context, Simpson observes: "The ratio of a case is only binding if it is not inconsistent with statute, or inconsistent with the ratio of another decision."38 And since the 15-year rule in the Common Cause violates both it cannot be the ratio of the case. In the result, it goes out.

We are now concerned with the defence personnel judgment. Here Misra, J. comes to the right point and adopts the "years of purchase" basis and goes back to the 15-year rule by adding two years to the period necessary for the recovery on the basis of years of purchase. It may be noted that this addition of two years is not justifiable because of the existence of the "multiplier effect" involved in the "years of purchase". A multiplier is the number by which the amount of a specific capital investment is multiplied to give the resultant total amount by which the income has increased. Let us take a concrete example. If I-Investment, Y = income or capital value, then the multiplier K = Y/1 or KI = Y. In other words, the multiplier of investment (monthly payment because of commutation) to obtain capital value (lump sum given by way of commutation) is known as the years' purchase. And the number of years' purchase is found by dividing the capital value (lump sum) by investment (monthly payment by pensioner). The total amount obtained by a pensioner at a time is the product of the monthly payment out of the pension and the number of years necessary for full recovery by Government. In the judgment this has been ignored and the "multiplier" widened so as to make it equal to 15 years. But there is absolutely no scope for the addition of two years to the multiplier as is evident from the above equation. Moreover, this multiplier is a variable in respect of each pensioner, because of the variability of I and Y involved in the commuted pension. Therefore, it cannot be equated with the fixed 15-year rule by the addition of two years to the multiplier. It is a mathematical paradox. Finally, the judgment makes "equity" or equality stand on "the more or less basis". Mathematically this is absurd. For "more" is denoted by the sign > , "less" by < , while equality by =. Now, if > or < remains = cannot take the field. This, it is most respectfully submitted, sounds like an Orwellian paradox: "All animals are equal, but some animals are more equal than others."39

In this context we are to extract the ratio from the Common Cause. The Court's decision is the restoration of the commuted portion of the pension on the expiry of 15 years from retirement. This applies to civilian and defence pensioners and is made effective from April 1, 1985. And the question is: what is the ratio decidendi of the case? It has already been shown that the court has accepted the 15-year rule since the Governments have accepted it. This, it is submitted, cannot be called a judicial decision. For Misra, J. concludes: "Many of the State Governments have already formulated schemes accepting the 15-year rule. We do not think we would be justified in disturbing the 15-year rule so far as civilian pensioners are concerned." Here Section 70 banning "unjust enrichment" is violated and the Court is blissfully ignorant of this. The 15-year rule has been challenged by the Common Cause because it abets the commission of this offence. This is the justification for the Court's intervention in the matter.

However, the correct yardstick has been evolved by the court in respect of the defence pensioners: "the 'years of purchase' basis". Unfortunately, the court has erred, it is submitted, in adopting two bases on commutation according as the pensioners are civilian or defence while coming to the same decision as to the restoration of the commuted portion of pension. This is wrong. As pointed out by the Supreme Court in D.S. Nakara v. Union of India40: "The pensioners for the purpose of pension benefits form a class. The equal treatment guaranteed in Article 14 is wholly violated inasmuch as the pension rules accord differential and discriminatory treatment to equals in the matter of commutation of pension. Division is thus both arbitrary and unprincipled." The Court has proceeded from the start on the two yardsticks — one for the civilian pensioners and the other for the defence personnel. The civilian yardstick is the 15-year rule, while the defence yardstick is "the years purchase' basis". Thereafter, the latter has been equated with the former by the addition of two years. But this does more injustice than justice. Yet the Court claims that this is 'equitable'. This is, to say the least, unfair.

Now, the question is: what is the ratio? It has already been shown that there has been a double-think in the adoption of two yardsticks on the restoration of the commuted portion of pension. For, the 15-year rule and "the 'years of purchase' basis" are two contradictory ideas and they remain irreconcilable. Secondly, double-talk appears in lengthening the procrustian bed of the years of purchase basis so as to make it fit in with the 15-year rule. Thirdly, the case gives the impression of two judgments, concurrent and dissentient. And the concurrent judgment has been arrived at without any legal reasoning. It is the function of the "hunch" in judicial decision. Here the Judge decides by feeling, and not by judgment; by "hunching" and not by ratiocination. As observed by Hutcheson41: "The vital, motivating impulse for the decision is an intuitive sense of what is right and wrong for that cause. And that Judge having so decided enlists his every faculty and belabours his laggard mind, not only to justify that intuition to himself, but to make it pass muster with his critics. Judges really do try to select categories or concepts into which to place a particular case so as to produce what the judge regards as a righteous result." Since the decision on the 15-year rule is given per incuriam, it has no binding effect at all. Fourthly, in case the one goes out, the other remains. Hence, the dissentient judgment, namely, "the 'years purchase' basis" remains and attains the status of concurrent judgment. And the question of its expansion into the 15-year rule does not arise, since the latter violates Section 70 of the Contract Act and is not enforceable. Finally, "the 'years purchase' basis" becomes the ratio decidendi leading to the order for restoration of the commuted portion of pension to the pensioners. And the 15 years' limitation does not apply. In other words, the number of years necessary to repay the total lump sum would govern the recovery and no pensioner can be made to pay more than what is paid to him. And this is what the Common Cause has asked for.

V. ratio in the "Common Cause"

Theories falling under quasi-contract are founded on a broad principle that unjust enrichment should not be retained at the expense of one who has suffered. In French law this principle is known by the name of actio de in rem verso, which "is founded on the principle of equity which forbids one man to enrich himself at the expense of another". This is applicable where "the estate of one person being enriched without lawful cause at the expense of another person, the latter, in order to obtain what is due to him, does not enjoy the benefit of any action based on contract, quasi-contract, delict or quasi-delict".42 Some recent codes provide for the return of unjust benefit. This may be seen in Article 123 of the Polish Code, Article 703 of the Japanese Civil Code, Articles 399-402 of the Civil Code of Soviet Russia, Article 62 of the Swiss Federal Code of Obligations, Article 812 of the German Civil Code and Article 179 of the Chinese Code. The American Restatement of the Law of Restitution, 1937 at p. 634 provides for an accounting by the plaintiff as a condition for restitution. Lord Wright43 in England has pleaded for a new law of restitution in place of the fiction of the implied contract, where it is unreasonable and unjust for the defendant to retain the benefit he has received.44

The doctrine of unjust enrichment flowing from quasi-contract was partially stated in Section 70 of the Indian Contract Act, 1872. And the Supreme Court noticed it in State of West Bengal v. B.K. Mondal45 in which it was applied to Government. Subsequently, the concept of unjust enrichment has suffered a sea change at the hands of the Supreme Court in Mulamchand v. M.P. State46 The Court has held that Section 70 is based on a different kind of obligation: "The juristic basis of the obligation in such a case is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or restitution." In this connection the Supreme Court has quoted with approval the observations of Lord Wright in Fibrosa v. Fairbairn47 thus: "Any civilised system of law is bound to provide remedies for unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are different from remedies in contract or in tort and fall within a third category of the common law called quasi-contract or restitution." The concept has been further widened so as to include both law and equity. Hence the Indian Supreme Court has been pleased to note the latest development of the law by quoting the observations of Lord Denning in Nelson v. Larholt48: "It is no longer appropriate to draw a distinction between law and equity. Principles have now to be stated in the light of their combined effect. Remedies now depend on the substance of their right, not on whether they can be fitted into a particular framework. The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the court orders restitution if the justice of the case so requires." And the principle of restitution has been brought on a par with the American Restatement of the Law of Restitution. This means according to the Supreme Court that "a person (seeking) restitution has a duty to account to the defendant for what he has received in the transaction from which his right to restitution arises". This is the present position of the law of restitution since Section 70 of the Contract Act started on its journey in 1872. And the Common Cause v. Union of India has been decided on this law, though the Court has not uttered a single word in this regard. Lord Denning's expression summarises the law: "restitution if the justice of the case so requires". And the Indian Supreme Court has approved of this in Mulamchand.

Since the law of restitution is applicable to commutation, the 15-year rule is arbitrary and it causes injustice. Here it is necessary to bring out the distinction between ratio decidendi and obiter dictum. As observed by H.J. Abraham: "Ratio decidendi refers to the essence, the vitals, the necessary core of the decision; obiter dictum is more or less extraneous, presumably unnecessary-to-the decision point made by the author of an opinion. In other words, the former constitutes the legal rule to be followed and adhered to below; the latter is an expression of a brief viewpoint, or sentiment, which at least in theory, has no binding effect."49 Of the two reasons — "the 15-year rule" and "the 'years of purchase' basis" — the first cannot be justified since it incarnates injustice in the shape of unjust enrichment. In other words, the 15-year rule is an "unnecessary to the decision point made by the author of an opinion: (it) is an expression of a brief sentiment (having) no binding effect". Hence, it is an obiter dictum. On the other hand, "the 'years' purchase' basis" is "the necessary core of the decision: (it) constitutes the legal rule to be followed and adhered to below". In other words, this is the ratio decidendi, having the binding effect. As pointed out by Simpson: "the reason why a judge enunciates the rule of law upon which he acts is that the rule justifies his action: not any rule will serve as a justification, but only a rule which is acceptable as a rule of the legal system."50

There is perpetual flux in the total push and pull of the universe and a judge faces a twofold task: (1) he must first extract from the precedents the underlying principle, the ratio decidendi; (2) he must then determine the path or direction along which the principle is to move and develop. Unfortunately Misra, J. has not in the Common Cause followed the salutory advice given by Cardozo.51 In case of conflict of principles, one may point to one conclusion and another may point to a second conclusion. A judge is to choose between two paths, selecting one or the other and in some cases he is to hit upon a third, which will be the resultant of the two forces in combination or will represent the mean between the extremes. This is illustrated by the case of Riggs v. Palmer52 wherein it was decided that a legatee murdering his testator would not be permitted to enjoy the benefits of the will. Three principles contended for mastery. The first was the principle of the binding force of a will disposing of the testator's estate in conformity with law. This pushed to the limit of its logic seemed to uphold the title of the murderer. The second principle was that Civil Courts might not add to the pains and penalties of crimes. This pushed to the limit of its logic seemed to uphold his title. Over against these two was the third principle rooted in justice, namely, that no man should profit from his own iniquity. And the logic of this principle prevailed over the logic of the other two.53 In the Common Cause also the same may be noticed. The logic of "the years' purchase basis" is to prevail over the logic of the 15-year rule, since the former is rooted in justice while the latter is not. And the ratio decidendi of the case is "the 'years purchase' basis". In the words of the Supreme Court: "A decision is binding not because of its conclusion but in regard to its ratio and the principle laid down therein."54

VI. Summing-up

In a famous dictum Lord Halsbury said: "A case is only authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas (it) is not always logical at all."55 Literally interpreted it would be fatal to any system of precedents. But what Halsbury meant is that there is more to the law than a mechanical process of logical deduction. It is obvious that the Judge has in every case to decide for himself which of the circumstances of the alleged precedent were relevant to the decision and whether the circumstances of his own case are in their essentials similar. Once he has decided which principle to apply, a bit of logic may enter into his application of principles. But there cannot always be a principle which imposes itself or an absolutely inescapable logical deduction. Generally there is a choice.56 And this has been explained by Chandrachud, C.J. in Deena v. Union of India57 thus: "Any case, even a locus classicus, is an authority for what it decides. It is permissible to extend the ratio of a decision to cases involving identical situations, factual and legal, but care must be taken to see that this is not done mechanically, that is, without a close examination of the rationale of the decision cited as a precedent."

In this context the role of the Judge is described by Lord Wright while discussing Bell v. Lever Bros58 thus:

"The judge could go step by step with previous authorities to the point that an agreement based on mistake (is) unenforceable. Then he would have to decide whether the same result followed when the prior contract was indeed existing, but could be cancelled without compensation and was voidable. Here the ways parted, and the judge had to make up his mind by analogical reasoning, and by his perception of what was just or convenient."

And the Common Cause, it is submitted, leaves much to be desired insofar as the "analogical reasoning" and the "perception of what was just" are concerned.

  1. (1987) 1 SCC 142 Return to Text
  2. Codex VII 45.13 Return to Text
  3. Co. Litt. 70 Return to Text
  4. Journal of Comparative Legislation, Vol. 28, p. 34: Precedent in Continental law Return to Text
  5. Tribhovandas v. Ratilal, AIR 1968 SC 372 Return to Text
  6. Jai Kuer v. Sher Singh, AIR 1960 SC 1118 (1122) Return to Text
  7. 1955 ALT 53 (FB) Return to Text
  8. (1940) 1 MLJ 400 (412) (FB) Return to Text
  9. Atma Ram v. State of Punjab, AIR 1959 SC 519 (527) Return to Text
  10. 8 HL 369 Return to Text
  11. Bengal Immunity Co. v. State of Bihar, (1955) 2 SCR 603 (628) Return to Text
  12. Dwarkadas v. Sholapur Co., AIR 1954 SC 119 (137) Return to Text
  13. The Times, July 27 Return to Text
  14. Paul Wilson & Co. A/S v. Partenreederei Hannah Blumenthal, (1983) 1 AC 854 (873) Return to Text
  15. G.M. Paton-A Textbook of Jurisprudence (3rd Edn.), pp. 180-181 Return to Text
  16. J.L. Montrose-"Language of and a Notation for, the Doctrine of Precedent": 2 Univ. of Western Australia Ann. L.R. (1952-3), 301 (504) Return to Text
  17. A.W.B. Simpson- "The ratio decidendi of a case and the doctrine of binding precedent": Oxford Essays in Jurisprudence (1st series), Ed. A.G. Guest, pp. 160-167 Return to Text
  18. (1880) 13 Ch D 774 (785) Return to Text
  19. Paton, op. cit., p. 183 Return to Text
  20. B. Russell: The Monist (1919), p. 192 Return to Text
  21. Op. cit., Vol. I, p. 38 Return to Text
  22. R. Dworkin: Taking Rights Seriously (1977), pp. 24-26 Return to Text
  23. William Markby: Elements of Law (4th Edn.), Sec. 98 at p. 62 Return to Text
  24. J. Montrose: "Ratio decidendi and the House of Lords": (1957), 20 MLR 124-136 Return to Text
  25. A.L. Goodhart: Essays in Jurisprudence and the Common Law (1931), pp. 5-8 Return to Text
  26. J. Stone: "The ratio of the ratio decidendi" : (1959) 22 MLR 597; The province and function of law (1947), pp. 187-88 ; Legal system and lawyers' reasonings (1964), pp. 267-70 ; (1969) 69 Columb. L. Rev 1162 (1176-82). Return to Text
  27. R. Cross: "The House of Lords and the Rules of precedent: Law, Morality and Society (1977) (ed.) P.M. Hacker/J. Raz, pp. 147,153 Return to Text
  28. J. Raz: The authority of law (1979), p. 183 Return to Text
  29. Goodhart, op. cit., pp. 1, 20-25 Return to Text
  30. Simpson, op. cit., p. 167 Return to Text
  31. (1967) 2 SCR 762 Return to Text
  32. R. Cross: Precedent in English law (1961), p. 60 Return to Text
  33. Golaknath v. State of Punjab, (1967) 2 SCR 762 (813) Return to Text
  34. (1954) 45 S.A. 523 (533) Return to Text
  35. (1954) 45 S.A. 523 (537-38) Return to Text
  36. A.R. Blackshield-"Fundamental Rights and the Economic viability of the Indian Nation": 10 Journal of the Indian Law Institute (1968), pp. 16-25. Return to Text
  37. 1962 Supp 1 SCR 876 (900-901) Return to Text
  38. Simpson, op. cit., p. 167 Return to Text
  39. George Orwell: Animal Farm (1945), p. 10 Return to Text
  40. (1983) 1 SCC 305, para 42 Return to Text
  41. Hutcheson: "The judgment intuitive: The function of the 'hunch' in judicial decision"; Readings in Jurisprudence and Legal Philosophy (Ed.) P. S. Chuchman, p. 261. Return to Text
  42. Amos and Walton: Introduction to French Law, p. 206. Return to Text
  43. Wright: Legal essays and addresses 1, p. 33 Return to Text
  44. Paton, op. cit. pp. 436-37 Return to Text
  45. (1962) Supp 1 SCR 876 (900-901) Return to Text
  46. (1968) 3 SCR 214 (222-23) Return to Text
  47. (1943) AC 32 (61) Return to Text
  48. (1948) 1KB 330 (343) Return to Text
  49. H.J. Abraham: The Judicial process (1968), p. 223 Return to Text
  50. Simpson, op. cit., p. 167 Return to Text
  51. B.N. Cardozo: The nature of the judicial Process (1962), p. 28 Return to Text
  52. 115 N.Y. 506 Return to Text
  53. Cardozo, op. cit., pp. 40-41 Return to Text
  54. Shama Rao v. Union Territory, Pondicherry, (1967) 2 SCR 650 (657) Return to Text
  55. Quim v. Leathem, (1901) AC 495 (506) Return to Text
  56. H.F. Jolowictz-Lectures on Jurisprudence (1963), pp. 257-58 Return to Text
  57. (1983) 4 SCC 645, para 15 Return to Text
  58. (1932) AC 161 Return to Text
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