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3 Precedent : Constitution of India, Article
141.
Every decision contains three basic postulates : (a) findings
of material facts, direct and inferential. An inferential finding of facts is
the inference which the judge draws from the direct, or perceptible facts; (b)
statements of the principles of law applicable to the legal problems disclosed
by the facts; and (c) judgment based on the combined effect of the above. A
decision is 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 flows
logically from the various observations made in the judgment. The enunciation of
the reason or principle on which a question before a Court has been decided is
alone binding as a precedent. Observations of Courts are neither to be read as
Euclid’s theorems, nor as provisions of the statute and that too taken out of
their context.
[Oriental Insurance Co. Ltd. v. Smt. Rajkumari & Ors.,
AIR 2008 SC 403]