Concept: In the doctrine of precedent, not every part of a judgment is binding. Only the legal principle on which the decision is based is binding on lower courts.
Step 1: Understand the meaning of Ratio Decidendi.
Ratio decidendi means the reason for the decision. It is the rule of law applied by the court to decide the case.
\[
\text{Ratio Decidendi} = \text{Binding legal principle of the case}
\]
Step 2: Understand the meaning of Obiter Dictum.
Obiter dictum means observations or remarks made by a judge which are not essential for deciding the case.
\[
\text{Obiter Dictum} = \text{Persuasive but not binding}
\]
Step 3: Identify the binding part of precedent.
A precedent is binding only to the extent of its ratio decidendi. Obiter dicta may have persuasive value, but they do not have binding force like ratio decidendi.
Therefore, the correct answer is Ratio Decidendi.