Difference Between Ratio Decidendi and Obiter Dicta

Ratio decidendi is the fundamental legal reasoning or principle on which a court’s decision is based. It forms the binding precedent that lower courts must follow, as mandated by Article 141 of the Indian Constitution.

For example, in Vidya Drolia & Ors. v. Durga Trading Corporation, the Supreme Court emphasised that the ratio is the authoritative part of the judgment.

In contrast, Obiter Dicta are remarks or observations made “by the way” that are not necessary for the decision.

These carry persuasive value but are not binding, as clarified in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly. While ratio prescribes law, obiter offers insight.