SC Judgments

Where does the (later) courts go wrong

Commnr. of Central Excise, Bangalore v. Srikumar Agencies, Civil Appeal No. 4872-4892 of 2000. Date of Judgment 27-11-08

While deciding an appeal the SC, today, made certain pertinent points on how a later court should read and apply a precedent. Deciding a case on an established precedent is an accepted legal process. How to read an earlier decision, is a critical issue. Should the context of the earlier case inform the later application of the ratio of the case, if so, how far and can the later court interpret the decision of the earlier court, are issues that seldom received attention.

In this case SC observes that ealrier decisions should be relied only after due regard is given to the context in which that decision is made. Matching of the factual situation is of utmost importance.

"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." Nor should judgments of the court be construed as statutes.

These positions of the court garner importance because of the way later courts keeps on expanding the scope of the ratio of earlier case, taken out of context, and thereby eroding the law. Widening the scope of the 'public policy' from Saw Pipes to DDA is an example to illustrate this tendency. Qualification given to a ground (patent illegality; that illegality of procedure should be patent affecting the rights of the parties) to set aside an award in Saw Pipes when reached DDA, became an independent ground in itself. DDA held that when an award affects the rights of the parties an award can be interfered with.