A word about precedents, before we deal with the aforesaid observations. The classic statement of Earl of Halsbury , L.C. in Quinn vs. Leathem, 1901 AC 495, is worth recapitulating first:
"Before discussing Allen v. Flood (1898) AC 1 and what was decided therein, there are two observations of a general character which I wish to make; and one is to repeat what I have very often said before -that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an 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 every lawyer must acknowledge that the law is not always logically at all."
44. This Court has in long line of cases followed the aforesaid statement of law. In State of Orissa vs. Sudhansu Sekhar Misra, AIR 1968 SC 647, it was observed:
".... A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it."
45. In the words of Lord Denning:
"Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive."
46. It was highlighted by this Court in Ambica Quarry Works Vs. State of Gujarat,(1987) 1 SCC 213: "18....The ratio of any decision must be understood in the background of the facts of that case. It has been said long time ago that a case is only an authority for what it actually decides, and not what logically follows from it."
47. In Bhavnagar University vs. Palitana Sugar Mill (P) Ltd., (2003) 2 SCC 111, this Court held that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision.
48. This Court in Bharat Petroleum Corporation Ltd. vs. N.R. Vairamani, (2004) 8 SCC 579, emphasized that the Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which the reliance is placed. It was further observed that the judgments of courts are not to be construed as statutes and the observations must be read in the context in which they appear to have been stated. The Court went on to say that circumstantial applicability, one additional or different fact may make a word of difference between conclusions in two cases.
Supreme Court of India
Bank Of India & Anr vs K.Mohandas & Ors on 27 March, 2009
Bench: D.K. Jain, R.M. Lodha
Read full judgment;click here