Stare Decisis And Doctrine In India
Case law, so called, or the decisions of the courts serve as a very important source of law, especially in countries following the common law system of adjudication. In countries that follow the common law system, the judgments of the higher courts are treated as binding on all subordinate courts. This concept of treating judgments of superior courts as binding is called the doctrine of precedent or stare decisis.  Before we go into the details of this doctrine, it is important understand the rationale behind the doctrine.
Certainty and predictability are very important attributes of law, and indeed essential for its success.  If law treats a person in particular way, it is only just that other persons in similar position are treated likewise. Only then will there be greater compliance with law. This first principle of law, so to say, should be applicable to the judiciary in order to ensure consistency in interpretation of various laws. The doctrine of precedent was, therefore, evolved in order to maintain consistency and uniformity in law. These apart, the doctrine of precedent has the advantages of equality, efficiency and avoiding arbitrariness.
A precedent works by way of analogy: we first look at case law dealing with the question before and apply the rule laid down in the precedent. But the process is not a mechanical one, as it may seem. Analogy by precedent involves analysis of the binding principle of law laid down in the case law and justification for its application to the circumstances before us. This process is explained in detail below.
Application of the Doctrine in India
The doctrine of precedent is expressly incorporated in India by Article 141 of the Constitution of India, 1950. Article 141 provides that the decisions of the Supreme Court are binding on all courts within the territory of India. Although there is no express provision, but by convention the decisions of a High Court are binding on all lower courts within the territorial jurisdiction of that High Court. Similarly, a decision of a higher Bench  , is binding on the lower Bench.
Ratio or Rationes Decidendi
The maximum attention of jurists while dealing with the doctrine of precedent is devoted to the enigmatic concept of ratio decidendi.  This is because ratio decidendi is the life of this doctrine. Ratio decidendi is, to borrow the words of Prof. Julius Stone, “the link" between generations.
Ratio decidendi is generally understood as the reasons spelling out the binding principle law in a decision. Although the meaning might be quite simple, the most demanding task is ascertaining the correct ratio decidendi in a case, and maximum space in the discourse on the doctrine of precedent is devoted to this issue. 
Determining the Ratio in a Case
Different approaches have been taken in order to determine the ratio in a case. Professor Goodhart argued that the binding ratio should be determined on the basis of “material" facts since the courts considered the law in the context of those facts which are material.  Another common method used is determining the ratio in reference to the issues dealt with by the previous court. The reasons and the principle declared while deciding the issues are considered the binding ratio. The justification for this approach is that debate or arguments and the application of the judicial mind are over resolving the issues before the court and not merely the facts.
Although there is no universal method of determining the ratio of a case, the indeterminate nature of the concept holds wide scope for judicial choice. The exercise of judicial choice, however paradoxically, is restricted by justice and fairness in the exercise of judicial discretion.
While deciding on the facts of a case observations not relevant to deciding the case may be made by a judge. These observations, although part of the judgment, may not have a bearing on the ultimate outcome of the case. Such observations are called obiter dictum or dicta. Obiter dicta are not considered binding. Nevertheless, resort may be sort to them if they are relevant to the principle of law being ascertained.
Problems and Paradoxes in the Doctrine of Precedent
If the doctrine of precedent is about following the old way, how then do we answer the demands of change and new developments?
There are some more aspects of the doctrine of precedent which are mentioned in brief here.
When a decision is given without considering or in ignorance of the existing principles/ provisions of law, either statutory or case law, it is said to be per incurium. A decision per incurium does not have any binding force.
A decision given without considering a particular aspect of law or issue, or without a debate or argument on questions relevant to the matter, the decision will be termed as sub-silentio. Like judgments per incurium a decision passed sub-silentio is not binding.
Distinguishing a case
Cases with identical facts are rarity. Cases with similar facts are not frequent. A principle of law is held considering the broad circumstance before the court and when such principles are sought to be applied as precedent it should be ascertained whether the circumstance are similar. When the facts are materially different from the previous decision, the precedent can be distinguished, that is to say, a different rule may be applied in order to suit the circumstances. Distinguishing cases also serves a tool to evolve law with the change in society. It allows the courts space to decide matter in a manner to suit the circumstance, without having to overturn the precedent.
Overruling a case
When a higher court is of the opinion that the principle of law enunciated in a decision is not correct it may overrule that judgment and lay down the correct principle of law. A judgment can be overruled only by a higher court. Lowers courts do not have such power. This is very clear from the very nature of the doctrine of precedent.
The doctrine of precedent is not mono-dimensional concept, but a complex phenomenon. Although this cannot be fully described, a deeper and wider understanding of the doctrine is possible by analysing and understanding each facet of it.
Bibliography and material for further reference
Cross and Harris, Precedent in English Law, Oxford University Press (1991)
Arthur L. Goodhart, Determining the Ratio of a Case, 40 Yale Law Journal 161 (1930)
JL Montrose, Ratio Decidendi and the House of Lords, 20 Modern Law Review 124 (1957)
AWB Simpson, The Ratio of a Case, 20 Modern Law Review 413 (1957)
JL Montrose, The Ratio of a Case, 20 Modern Law Review 587 (1957)
AWB Simpson, The Ratio of a Case, 21 Modern Law Review 155 (1958)
AL Goodhart, The Ratio of a Case, 22 Modern Law Review 117 (1959)
AWB Simpson, The Ratio of a Case, 22 Modern Law Review 453 (1959)
Julius Stone, The Ratio of Ratio Decidendi, 22 Modern Law Review 597 (1959)
Earl Maltz, The Nature of Precedent, 66 North Carolina Law Review 367 (1988)