corporate law
Stare decisis, the principle of legal precedent, mandates that decisions made by higher courts are binding on lower courts. This establishes a framework for legal finality, promoting consistency and permanence in the law.
Principles that have been settled, accepted, and consistently applied should not be easily overturned. When courts choose to depart from established law, they must carefully consider the potential harm that could arise from such changes.
The origins of this principle can be traced back to medieval England and America, where courts relied on previous judgments for guidance. They also retained the discretion to disregard earlier rulings deemed unsatisfactory.
Article 141 of the Indian Constitution asserts that “Any law declared by the Supreme Court shall be binding on all courts within the territory of India.” Consequently, when other courts apply the Supreme Court's decisions, a thorough understanding of the underlying principles from previous rulings is essential.
In the case of Union of India vs. Azadi Bachao Andolan (2003) 263 ITR at 726, the Supreme Court interpreted the significance of adhering to precedents. Referencing Muktul vs. Manbhari, AIR 1958 SC 918, and Mishri Lal vs. Dhirendra Nath (1999) 4 SCC 11, the court emphasized that: “A decision that has been followed for a long period, and acted upon in contract formulation, property disposition, general affairs, or legal proceedings, should generally be followed by higher courts, even if they possess differing views."
Stare decisis provides both benefits and drawbacks that impact the judicial system:
In summary, the doctrine of stare decisis plays a crucial role in ensuring the integrity and reliability of legal proceedings. While it promotes stability in the law, it is essential to remain vigilant about its limitations, allowing for necessary adaptations within the legal framework.