Inversion Test

State of Gujarat v. Utility Users' Welfare Assn., (2018) 6 SCC 21

112. It is undoubtedly true that the question which the Court was seized of, related to the
interpretation of Section 86 of the said Act and certain other matters, which are not connected
with the controversy herein. Thus, the issue arises, whether the observations made, albeit to be
construed as advisory or suggestive qua the appointment of a Chairman and a Member are to
be treated as ratio decidendi or obiter dicta.

113. In order to determine this aspect, one of the well-established tests is “the Inversion Test”
propounded inter alia by Eugene Wambaugh, a Professor at The Harvard Law School, who
published a classic text book called The Study of Cases [ Eugene Wambaugh, The Study of
Cases (Boston: Little, Brown & Co., 1892).] in the year 1892. This textbook propounded inter
alia what is known as the “Wambaugh Test” or “the Inversion Test” as the means of judicial
interpretation. “the Inversion Test” is used to identify the ratio decidendi in any judgment.
The central idea, in the words of Professor Wambaugh, is as under:

“In order to make the test, let him first frame carefully the supposed proposition
of law. Let him then insert in the proposition a word reversing its meaning. Let
him then inquire whether, if the court had conceived this new proposition to be
good, and had it in mind, the decision could have been the same. If the answer be
affirmative, then, however excellent the original proposition may be, the case is
not a precedent for that proposition, but if the answer be negative the case is a
precedent for the original proposition and possibly for other propositions also.
[ Eugene Wambaugh, The Study of Cases (Boston: Little, Brown & Co., 1892) at p.
17.] ”

114. In order to test whether a particular proposition of law is to be treated as the ratio
decidendi of the case, the proposition is to be inversed i.e. to remove from the text of the
judgment as if it did not exist. If the conclusion of the case would still have been the same
even without examining the proposition, then it cannot be regarded as the ratio decidendi of
the case. This test has been followed to imply that the ratio decidendi is what is absolutely
necessary for the decision of the case. “In order that an opinion may have the weight of a
precedent”, according to John Chipman Grey [ Another distinguished jurist who served as a
Professor of Law at Harvard Law School.], “it must be an opinion, the formation of which, is
necessary for the decision of a particular case”.

Property Owners Association v. State of Maharashtra, 2024 SCC OnLine

SC 3122

111. Not every observation in a judgment of this Court is binding as precedent. Only the ratio
decidendi or the propositions of law that were necessary to decide on the issues between the
parties are binding. Observations by the judge, even determinative statements of law, which
are not part of her reasoning on a question or issue before the court, are termed obiter dicta.
Such observations do not bind the Court. More simply, a case is only an authority for what
it actually decides.

112. A Constitution Bench of this Court (speaking through Chief Justice Khare) in Islamic
Academy of Education v. State of Karnataka pithily observed:

“2. […] The ratio decidendi of a judgment has to be found out only on reading the entire
judgment. In fact, the ratio of the judgment is what is set out in the judgment itself. The
answer to the question would necessarily have to be read in the context of what is set
out in the judgment and not in isolation. In case of any doubt as regards any
observations, reasons and principles, the other part of the judgment has to be looked
into. By reading a line here and there from the judgment, one cannot find out the entire
ratio decidendi of the judgment. […]”

113. In Secunderabad Club v. CIT, this Court, speaking through one of us (Justice BV
Nagarathna), had occasion to delineate how to cull out the ratio decidendi of a judgment and
identify the principles which have precedential value. This Court observed:

“14. […] According to the well-settled theory of precedents, every decision contains
three basic ingredients:

(i) findings of material facts, direct and inferential. An inferential finding

of fact is the inference which the judge draws from the direct or
perceptible facts ;
(ii) (ii) statements of the principles of law applicable to the legal problems
disclosed by the facts ; and
(iii) (iii) judgment based on the combined effect of (i) and (ii) above.
 For the purposes of the parties themselves and their privies, ingredient (iii) is the
material element in the decision, for, it determines finally their rights and liabilities in
relation to the subject-matter of the action. It is the judgment that estops the parties
from reopening the dispute. However, for the purpose of the doctrine of precedent,
ingredient (ii) is the vital element in the decision. This is the ratio decidendi. It is not
everything said by a judge when giving a judgment that constitutes a precedent. The
only thing in a judge's decision binding a party is the principle upon which the case is
decided and for this reason it is important to analyse a decision and isolate from it the
ratio decidendi.”(emphasis supplied)

114. Further, a simple test that has been invoked by this Court to determine whether a
particular proposition of law is to be treated as the ratio decidendi of a case is the “inversion
test” formulated by Professor Eugene Wambaugh. The test mandates that to determine
whether a particular proposition of law is part of the ratio decidendi of the case, the
proposition is to be inversed. This means that either that proposition is hypothetically
removed from the judgment or it is assumed that the proposition was decided in reverse.
After such removal or reversal, if the decision of the Court on that issue before it would
remain the same then the observations cannot be regarded as the ratio decidendi of the case.
 Stare decisis

State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat, (2005) 8 SCC 534

111.Stare decisis is a Latin phrase which means “to stand by decided cases; to uphold
precedents; to maintain former adjudication”. This principle is expressed in the maxim
“stare decisis et non quieta movere” which means to stand by decisions and not to disturb
what is settled. This was aptly put by Lord Coke in his classic English version as “Those
things which have been so often adjudged ought to rest in peace”. However, according to
Justice Frankfurter, the doctrine of stare decisis is not “an imprisonment of reason” (Advanced
Law Lexicon, P. Ramanatha Aiyer, 3rd Edn. 2005, Vol. 4, p. 4456). The underlying logic of
the doctrine is to maintain consistency and avoid uncertainty. The guiding philosophy is that
a view which has held the field for a long time should not be disturbed only because another
view is possible.

112. The trend of judicial opinion, in our view, is that stare decisis is not a dogmatic rule
allergic to logic and reason; it is a flexible principle of law operating in the province of
precedents providing room to collaborate with the demands of changing times dictated by
social needs, State policy and judicial conscience.

113. According to Professor Lloyd concepts are good servants but bad masters. Rules, which
are originally designed to fit social needs, develop into concepts, which then proceed to take
on a life of their own to the detriment of legal development. The resulting “jurisprudence of
concepts” produces a slot-machine approach to law whereby new points posing questions of
social policy are decided, not by reference to the underlying social situation, but by reference
to the meaning and definition of the legal concepts involved. This formalistic a priori approach
confines the law in a straitjacket instead of permitting it to expand to meet the new needs and
requirements of changing society (Salmond on Jurisprudence, 12th Edn., at p. 187). In such
cases the courts should examine not only the existing laws and legal concepts, but also the
broader underlying issues of policy. In fact, presently, judges are seen to be paying increasing
attention to the possible effects of their decisions one way or the other. Such an approach is to
be welcomed, but it also warrants two comments. First, judicial inquiry into the general effects
of a proposed decision tends itself to be of a fairly speculative nature. Secondly, too much
regard for policy and too little for legal consistency may result in a confusing and illogical
complex of contrary decisions. In such a situation it would be difficult to identify and respond
to generalised and determinable social needs. While it is true that “the life of the law has not
been logic, it has been experience” and that we should not wish it otherwise, nevertheless we
should remember that “no system of law can be workable if it has not got logic at the root of
it”. (Salmond, ibid., pp. 187-88).

114. Consequently, cases involving novel points of law, have to be decided by reference to
several factors. The judge must look at existing laws, the practical social results of any decision
he makes, and the requirements of fairness and justice. Sometimes these will all point to the
same conclusion. At other times each will pull in a different direction; and here the judge is
required to weigh one factor against another and decide between them. The rationality of the
judicial process in such cases consists of explicitly and consciously weighing the pros and cons
in order to arrive at a conclusion. (Salmond, ibid., p. 188.)

115. In case of modern economic issues which are posed for resolution in advancing society or
developing a country, the court cannot afford to be static by simplistically taking shelter behind
principles such as stare decisis, and refuse to examine the issues in the light of the present facts
and circumstances and thereby adopt the course of judicial “hands off”. Novelty unsettles
existing attitudes and arrangements leading to conflict situations which require judicial
resolution. If necessary adjustments in social controls are not put in place then it could result
in the collapse of social systems. Such novelty and consequent conflict-resolution and
“patterning” is necessary for full human development. (See The Province and Function of Law,
Julius Stone, at pp. 588, 761 and 762.)

116.Stare decisis is not an inexorable command of the Constitution or jurisprudence. A

careful study of our legal system will discern that any deviation from the straight path of
stare decisis in our past history has occurred for articulable reasons, and only when the
Supreme Court has felt obliged to bring its opinions in line with new ascertained facts,
circumstances and experiences. (Precedent in Indian Law, A. Laxminath, 2nd Edn. 2005, p.
8.)

117. Given the progressive orientation of the Supreme Court, its creative role under Article
141 and the creative elements implicit in the very process of determining ratio decidendi, it
is not surprising that the judicial process has not been crippled in the discharge of its duty
to keep the law abreast of the times, by the traditionalist theory of stare decisis (ibid., p. 32).
Times and conditions change with changing society, and, “every age should be mistress of
its own law” and the era should not be hampered by outdated law. “It is revolting”, wrote
Mr Justice Holmes in characteristically forthright language, “to have no better reason for
a rule of law than it was so laid down in the time of Henry IV. It is still more revolting if the
grounds upon which it was laid down have vanished long since, and the rule simply persists
from blind imitation of the past”. It is the readiness of the judges to discard that which does
not serve the public, which has contributed to the growth and development of law. (ibid., p.
68)

118. The doctrine of stare decisis is generally to be adhered to, because well-settled principles
of law founded on a series of authoritative pronouncements ought to be followed. Yet, the
demands of the changed facts and circumstances, dictated by forceful factors supported by
logic, amply justify the need for a fresh look.

119. Sir John Salmond, while dealing with precedents and illustrating instances of departure
by the House of Lords from its own previous decisions, states it to be desirable as “it would
permit the House [of Lords] to abrogate previous decisions which were arrived at in different
social conditions and which are no longer adequate in present circumstances”. (See Salmond,
ibid., at p. 165.) This view has been succinctly advocated by Dr. Goodhart who said: “There is
an obvious antithesis between rigidity and growth, and if all the emphasis is placed on
absolutely binding cases then the law loses the capacity to adapt itself to the changing spirit of
the times which has been described as the life of the law.” (ibid., p. 161) This very principle
has been well stated by William O'Douglas in the context of constitutional jurisprudence. He
says: “So far as constitutional law is concerned, stare decisis must give way before the dynamic
component of history. Once it does, the cycle starts again.” (See Essays on Jurisprudence from
the Columbia Law Review, 1964, at p. 20.)