Supreme Court Says Its Judgments Must Clarify Their Binding Nature So That HCs & Trial Courts Don't Get Confused

The Supreme Court recently highlighted the need to clearly state the intent behind a judgment within the judgment itself. The Court clarified that not every judgment is meant to be a binding precedent under Article 141 of the Constitution. Therefore, the judgment needs to specify whether the decision is intended to resolve a specific dispute between the parties or to establish a precedent under Article 141.The Court added that apart from the regular disposal of the cases by exercising powers under Article 136 of the Constitution, it also delivers decisions that set as a binding precedent under Section 141 of the Constitution wherein the High Courts and Trial Courts often face challenges in distinguishing between the Court's decisions i.e., whether a decision is meant for resolution between the parties or intended to set a precedent. Therefore, to avoid the confusion. it highlighted the need to state whether the particular judgment is intended to resolve the dispute between the parties or set a precedent. “as an institution, our Supreme Court performs the twin functions of decision-making and precedent-making. A substantial portion of our jurisdiction under Article 136 is reflective of regular appellate disposition of decision making. Every judgment or order made by this Court in disposing of these appeals is not intended to be a binding precedent under Article 141. Though the arrival of a dispute for this Court's consideration, either for decision-making or precedent-making is at the same tarmac, every judgment or order which departs from this Court lands at the doorstep of the High Courts and the subordinate courts as a binding precedent. We are aware of the difficulties that High Courts and the subordinate courts face in determining whether the judgment is in the process of decision-making or precedent-making, particularly when we have also declared that even an obiter of this Court must be treated as a binding precedent for the High Courts and the courts below. In the process of decision making, this Court takes care to indicate the instances where the decision of the Supreme Court is not to be treated as precedent. It is therefore necessary to be cautious in our dispensation and state whether a particular decision is to resolve the dispute between the parties and provide finality or whether the judgment is intended to and in fact declares the law under Article 141.”, the bench comprising Justices PS Narasimha and Pankaj Mithal observed.BackgroundThe aforesaid observation of the Court came while deciding a case where the Court referred to the larger bench the issue of whether unregistered MSMEs could avail dispute settlement under S.18 of MSMED Act, 2006. Placing reliance on the Court's precedents, the Appellant argued that the unregistered MSME could not avail of dispute settlement under S. 18 of the MSMED Act.Rejecting the Appellant's argument, the Court noted that the precedents cited by the Appellant were decided on different issues, and didn't cater to the issue at hand.The aforesaid observation of the Court reflects that the precedents cited by the Appellant were not meant to establish binding authority, but rather to resolve the specific disputes between the parties, and therefore cannot be applied universally to all related cases.Also From Judgment: Can Unregistered MSMEs Avail Dispute Settlement Under S.18 MSMED Act? Supreme Court Refers To Larger BenchCase Title: NBCC (INDIA) LTD. VERSUS THE STATE OF WEST BENGAL & ORS.Citation : 2025 LiveLaw (SC) 46Click here to read/download the judgment

Supreme Court Says Its Judgments Must Clarify Their Binding Nature So That HCs & Trial Courts Don't Get Confused

Yash Mittal

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