XI. The Law of Debt

The Minor Law Books (SBE33), by Julius Jolly, [1889], at sacred-texts.com

XI. THE LAW OF DEBT.

1. ¹ A creditor should never lend money without having first secured a pledge of adequate value, or a

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deposit, or a trustworthy surety; nor without a bond written (by the debtor himself) or attested (by subscribing witnesses).

2. ² That (loan) is termed kusîda (a loan on interest) which is exacted by persons apprehending no sin (from the act), from a mean (kutsita) or wretched (sîdat) man, after having been increased to four or eight times the original amount (through the interest accruing on it).

3. ³ An eightieth part (of the principal) accrues as interest on it (every month); and it is certainly doubled by such interest within a third of a year less than seven years (that is to say, within six years and eight months).

4. ⁴ Interest is declared (by some) to be of four

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sorts; by others, it is stated to be fivefold; and by others again, it is said to be of six kinds. Learn their (various) qualities.

5. Kâyikâ (bodily interest); kâlikâ (periodical interest); kakravriddhi (compound interest); kâritâ (stipulated interest); sikhâvriddhi (hair-interest); and bhogalâbha (interest by enjoyment): such are the six kinds of interest.

6. ⁶ Kâyikâ interest is connected with bodily labour; kâlikâ is due every month; kakravriddhi is interest on interest; kâritâ is interest promised by the borrower.

7, 8. When interest is received every day, it is termed sikhâvriddhi (hair-interest, because it grows every day). Because it grows constantly like hair, and does not cease growing except on the loss of the head, that is to say, on payment of the principal, therefore it is called hair-interest. The use of a (mortgaged) house, or the produce of a field, is termed bhogalâbha (interest by enjoyment).

9. ⁹ That kâritâ (stipulated) interest has to be paid always, which has been stipulated by the debtor himself, over and above (the ordinary rate of interest), and has been promised in times of distress.

10. ¹⁰ When (such special) interest has been stipulated in any other manner, it must not be paid by any means.

11. ¹¹ Hair-interest, bodily interest, and interest by

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enjoyment shall be taken by the creditor so long as the principal remains unpaid.

12. ¹² But the use of a pledge after twice the principal has been realised from it, compound interest, and the exaction of the principal and interest (together as principal) is usury and reprehensible.

13. ¹³ On gold (and other precious metals), the interest may make (the debt) double; on clothes and base metals (such as tin or lead), treble; on grain, it is allowed to rise to four times the original amount, and so on edible plants (or fruit), beasts of burden, and wool.

14. It is allowed to make (the debt) quintuple, on pot-herbs; sextuple, on seeds and sugar-cane; and it may make (the debt) octuple, on salt, oil, and spirituous liquor.

15. Likewise, on sugar and honey, if the loan be of old standing.

16. ¹⁶ On grass, wood, bricks, thread, substances from which spirits may be extracted, leaves, bones, leather, weapons, flowers, and fruits, no interest is ordained.

17. ¹⁷ A pledge is termed bandha, and is declared to

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be of four sorts; movable or immovable; to be kept only or to be used; to be released at any time, or limited as to time; stated in writing, or stipulated (orally) before witnesses.

18. ¹⁸ Should the creditor, actuated by avarice, use a pledge before interest has ceased to accrue on the loan (on becoming equal to the principal), or before the fixed period has expired, such use shall be stopped.

19. The pledge has to be kept carefully, like a deposit; interest is forfeited in case of its being damaged.

20. ²⁰ A pledge having been used and rendered worthless (by such use), the principal (itself) is lost; if a very valuable pledge be spoiled, he must satisfy the pledger.

21. ²¹ If a pledge be destroyed by a fatal accident or by an act of the king, the debtor shall be caused either to deliver another pledge or to pay the debt.

22. ²² When the debtor restores the principal and asks for his pledge, it must be restored to him; otherwise the creditor is liable to punishment.

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23. ²³ When a field or other (immovable property) has been enjoyed, and more than the principal realised by it, then the debtor shall recover his pledge, if the principal and interest has been actually got out of it (by the creditor).

24. (This law applies) when the debtor delivers a field to the creditor, with the following stipulation, 'This (field) shall be enjoyed by you, when interest has ceased (on becoming equal to the principal), that is certain. When the principal has been realised together with the interest, you shall restore (the field) to me.'

25. ²⁵ When the time (for payment) has passed and interest has ceased (on becoming equal to the principal), the creditor shall be owner of the pledge; but, till ten days have elapsed, the debtor is entitled to redeem it.

26. ²⁶ Notice having been given to the debtor's family, a pledge to be kept (only) may be used, after the principal has been doubled; and so may a pledge for a fixed period, on the expiration of that term.

27. ²⁷ When the principal has been doubled, or the stipulated period expired in the case of a pledge delivered for a certain time only, the creditor

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becomes owner of the pledge, after having waited for a fortnight.

28. If the debtor should pay the debt during that interval, he may recover his pledge (even then).

29. ²⁹ When the amount of the debt has been doubled (by the interest accruing on it), and the debtor is either dead or no longer present, (the creditor) may take his chattel and sell it before witnesses.

30. Or, its value having been estimated in an assembly, he may keep it for ten days; after which, having realised a sufficient sum to cover his demand, he should relinquish the balance.

31. ³¹ When a man neither enjoys a pledge, nor obtains it (from the debtor), nor points it out (to others), his written contract (concerning the pledge) is invalid, (just like) a document when the (subscribing) witnesses and debtor are dead.

32. ³² When a house or field has been mortgaged for use and the period (fixed for such use) has not expired, the debtor cannot recover his property, nor can the creditor (recover) his loan.

33. When the (stipulated) period has elapsed, both

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parties are at liberty to do so. But, even before (the stipulated period) has elapsed, they may make an arrangement by mutual consent.

34. ³⁴ Where one field has been mortgaged to two creditors at the same time, it shall belong to that mortgagee who was the first to obtain possession of it.

35. ³⁵ If both have possessed it for an equal time, it shall be held in common (or shared equally) by them. The same rule is ordained in the case of a gift or a sale.

36. ³⁶ Which course should be adopted in cases of a competition between three different acts, the identical property having been sold, mortgaged, and given away on one and the same day?

37. The three parties should divide that lawful property of theirs among themselves in proportionate shares, the two first in the ratio of their respective claims, whereas the donee ought to obtain a full third.

38. ³⁸ The pledgee can never be compelled to restore the pledge against his will, before the whole amount due to him has been paid, nor must (the pledge be obtained from him) by deceit or by (the mode called) Karita.

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39. ³⁹ For appearance, for confidence, for payment, and for delivering the assets of the debtor: it is for these four different purposes that sureties have been ordained by the sages in the system (of law).

40. ⁴⁰ The first says, 'I will produce (that man);' the second (says), 'He is a respectable man;' the third (says), 'I will pay the debt; the fourth (says), 'I will deliver his assets.'

41. ⁴¹ If the debtors fail in their engagements, the two first (sureties themselves, but not their sons) must pay the sum lent at the appointed time; both the two last (sureties), and in default of them their sons (are liable for the debt), when the debtors break their promise (to pay the debt).

42. ⁴² The creditor should allow time for the surety to search for a debtor who has absconded; a fortnight, a month, a month and a half, according to (the distance of) the place (where he is supposed to be hiding himself).

43. (Sureties) must not be excessively harassed; they should be made to pay the debt by instalments;

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they must not be attacked when the debtor is present: such is the law regarding sureties.

44. ⁴⁴ When (a surety), being harassed, pays a proved debt which he has vouched for, (the debtor) shall pay him twice as much, after the lapse of a month and a half.

45. ⁴⁵ Should foolish (sureties) in good faith pay the debt, though not required to do so, or on being required to pay a different debt, how and from whom can they recover that sum?

46. ⁴⁶ By whom, to whom, and how, should, or should not, be paid a loan which has been received from the hands of another man in the shape of a loan on interest, will now be declared.

47. ⁴⁷ A loan shall be restored on demand, if no time has been fixed (for its restoration); or on the expiration of the time (if a definite period has been fixed); or when interest ceases (on becoming equal to the principal). If the father is no longer alive, (the debt must be paid) by his sons.

48. ⁴⁸ The father's debt must be paid first of all, and after that, a man's own debt; but a debt contracted by the paternal grandfather must always be paid before these two even.

49. ⁴⁹ The father's debt, on being proved, must be paid by the sons as if it were their own; the grandfather's debt must be paid (by his son's sons) without

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interest; but the son of a grandson need not pay it at all.

50. ⁵⁰ When a debt has been incurred, for the benefit of the household, by an uncle, brother, son, wife, slave, pupil, or dependant, it must be paid by the head of the family.

51. ⁵¹ Sons shall not be made to pay (a debt incurred by their father) for spirituous liquor, for losses at play, for idle gifts, for promises made under the influence of love or wrath, or for suretyship, nor the balance of a fine or toll (liquidated in part by their father).

52. ⁵² The liability for the debts devolves on the successor to the estate, when the son is involved in calamity; or on the taker of the widow, in default of a successor to the estate.

53. ⁵³ Debts contracted by the wives of distillers of spirituous liquor, hunters, washermen, herdsmen, barbers or the like persons, shall be paid by their protector; they were contracted for the affairs of their husbands.

54. ⁵⁴ When (a debtor) has acknowledged a debt, it may be recovered from him by the expedients of friendly expostulation and the rest, by moral suasion,

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by artful management, by compulsion, and by confinement at his house.

55. ⁵⁵ When a debtor is caused to pay by the advice of friends or kinsmen, by friendly remonstrances, by constant following, or by (the creditor) starving himself to death, it is termed moral suasion.

56. ⁵⁶ When a creditor, with a crafty design, borrows anything from his debtor, for his own use, or withholds an Anvâhita deposit or the like, and thus enforces payment of the debt, it is termed artful management.

57. ⁵⁷ When a debtor is fettered and conducted into (the creditor's) own house, where he is compelled to pay the debt by beating or other (forcible) means, it is called compulsion.

58. ⁵⁸ When a debtor is made to pay by confining his wife, son or cattle, and by watching at his door, it is termed Âkarita (the customary mode).

59. ⁵⁹ An indigent debtor may be taken to his own house by the creditor and compelled to do work there, such as distilling spirits and the like; but a Brahman must be made to pay gradually.

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60. ⁶⁰ When the time fixed (for payment) has elapsed, and the interest has ceased (on becoming equal to the principal), the debtor may either recover his loan or cause a new bond to be written in the form of compound interest.

61. ⁶¹ As compound interest is taken on the doubled principal, so does the use of a pledge (become a new principal), the debt together with the interest being considered as the (new) principal.

62. ⁶² This rule concerns an acknowledged (debt); but (a debtor) denying (his liability) shall be compelled to pay, on the debt being proved in a (judicial) assembly by a document or by witnesses.

63. ⁶³ (A debtor) claiming judicial investigation in a doubtful case, shall never be put under restraint (by the creditor). He who puts under restraint one not liable to such treatment, shall be fined according to law.

64. ⁶⁴ A debtor who makes a declaration in this form, 'What may be found to be justly due, that I will pay,' is termed 'one claiming judicial investigation.'

65. ⁶⁵ When there is a difference of opinion between the two parties regarding the nature (of the loan), or the number or the like, or the (amount of) interest,

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or whether the sum be due or not, it is termed a doubtful case.

66. ⁶⁶ Should a man, after recovering his debt by moral suasion or one of the other modes, fail to receipt it on the bond, or to give a deed of acquittance; it shall yield interest (to the debtor).

Footnotes

319:1 XI, 1. May. p. 102; Col. Dig. I, 1, 11. The commentators agree p. 320 in explaining the term âdhi, 'a pledge,' as denoting a pledge to be used, such as e.g. a cow to be used with her milk, or landed property pledged together with its produce. The term bandha, 'a deposit,' is supposed to denote a pledge which must not be used; according to the Mayûkha, however, it means a pledge which is not actually delivered to the creditor, the debtor merely promising not to alienate it. 'A pledge of adequate value' is one corresponding in value to the principal together with the interest. Vîram. p. 293. The term sâkshimat, 'attested,' is referred to a debt contracted orally before witnesses, both by Colebrooke (Dig. I, 1, 11) and Mandlik (May. loc. cit.). This, however, is opposed to the gloss of the Vîramitrodaya.

320:2 May. p. 102; Col. Dig. I; 1, 3. It is hardly necessary to point out that the etymology here proposed of the term kusîda, 'a loan on interest,' is entirely fanciful. It is really derived from ku and sîda, and denotes 'that which adheres closely, and cannot easily be got rid of.' The commentators explain the clause 'apprehending no sin' to imply that it is sinful otherwise to accept a gift from an unworthy person.

320:3 Smritik.; Col. Dig. I, 2, 26. asîtibhâgo vardheta lâbhe dvigunatâm iyât | prayuktam saptabhir varshais tribhâgonair na samsayah ||

320:4 4-8. Vîram. pp. 294, 295; Col. Dig. I, 2, 35.

321:6 'Bodily labour,' when the milk of a pledged cow or the strength of a pledged animal for draught or burden is used by the creditor, being, as it were, the interest on his loan. Vîram.

321:9 9, 10. Vîram. p. 295; Col. Dig. I, 2, 37 ('Kâtyâyana').

321:10 'In any other manner,' i.e. by the creditor. Vîram.

321:11 Vîram. p. 301; Col. Dig. I, 2, 35.

322:12 Viv. p. 12; Col. Dig. loc. cit.

322:13 13-16. Vîram. pp. 298, 300; Viv. pp. 17, 18; May. p. 104; Col. Dig. I, 2, 63, 67, 69.

13. The Vîramitrodaya reads karmâsthivarmanâm, 'leather, bones, and armour.'

322:16 The commentators observe that no interest should be exacted, unless there be a special agreement to the purpose. There is, however, another reading (vriddhis tu na nivartate), under which the purport of this rule becomes quite different, viz. that there is absolutely no limit regarding the interest on the articles mentioned in it. This version is in harmony with the corresponding regulations of other legislators.

322:17 Col. Dig. I, 3, 80; May. p. 105; Vîram. p. 305.

323:18 18, 19. Col. Dig. I, 3, 92; Vîram. p. 306.

323:20 Col. Dig. I, 3, 86; Vîram. p. 309; May. p. 105.

323:21 Col. Dig. I, 3, 93; May. p. 105; Vîram. p. 309. This text has been translated according to the Vîramitrodaya. Under the reading of the other compilations, payment of the debt together with interest is enjoined. 'A king,' i.e. a ruler who offends against the dictates of religion. Vîram.

323:22 Col. Dig. I, 3, 103; Vîram. p. 319. The rule that the principal only needs to be restored concerns a pledge for use. In the case of a pledge for custody, interest has to be paid besides the principal. Vîram.

324:23 Col. Dig. I, 3, 108; May. p. 107.

23, 24. Vîram. p. 320. Under a stipulation of this sort, the mortgagee shall recover his pledge, as soon as the creditor has fully realised his demand out of the mortgage, no matter whether he has contributed little or much himself towards its realisation. Vîram. The Ratnâkara (p. 29) inserts the following text after 24, 'This lawful rule has been proclaimed with regard to loans on interest and so forth.'

324:25 Col. Dig. I, 3, 115; Vîram. p. 316.

324:26 Vîram. p. 316; Col. Dig. I, 3, 119 ('Smriti').

324:27 27, 28. Vîram. p. 315. 'During that interval,' i.e. before the ten days have elapsed. Vîram. These two texts are elsewhere p. 325 attributed to Vyâsa. This is probably the correct view, as it is difficult to reconcile these texts either with the preceding or with the following ones.

325:29 May. p. 106.

29, 30. Vîram. p. 316; Col. Dig. I, 3, 1 2 1. 'The chattel,' i.e. the pledged commodity. 'A sufficient sum to cover his demand,' i.e. twice as much as the principal. Vîram. The balance should be handed over to the relatives of the debtor or to the king. Colebrooke's Digest has another text after these two, in which it is stated that the precise amount of the debt should be ascertained by persons skilled in computation.

325:31 Col. Dig. I, 3, 126; Smritik.; Ratn. p. 35.

325:32 32, 33. Viv. p. 25; Col. Dig. I, 3, 105, 118. In ordinary cases, p. 326 the recovery of the loan, attended by the restoration of the pledge to the pledger, takes place after the lapse of the stipulated period. By mutual consent, however, it may take place before that time.

326:34 The term 'a field' includes by implication any pledge for use. Vîram. p. 312. Other commentators add that possession must have been obtained without forcible means. Col. Dig. I, 3, 132.

326:35 Smritik.; Col. Dig. I, 3, 133; Ratn. p. 37.

326:36 36, 37. Vîram. p. 314 ('Vasishtha'); V. T.

326:38 Ratn. p. 27; Col. Dig. I, 3, 102. Regarding the mode called Karita or Âkarita, see below, XI, 58.

327:39 Col. Dig. I, 4, 142; Vîram. p. 321; Viv. p. 27. The author of the last-mentioned work reads rine dravyârpane for rinidravyârpane, which reading he refers to as the traditional one, and defines the fourth kind of surety to be one who vouches for the return of articles lent for use, such as ornaments for a festivity.

327:40 May. p. 107. The first surety promises to produce a debtor, who is likely to abscond; the second vouches for the debtor's honesty, declaring that he is a virtuous man, who will not deceive the creditor; the third promises to pay the debt himself together with the interest, if the debtor should fail to pay it; the fourth promises to deliver his movable property, such as household furniture, in the same case.

327:41 May. p. 107.

327:42 42, 43. Vîram. pp. 323, 328; Col. Dig. I, 4, 148; Ratn. p. 45.

328:44 Vîram. p. 328.

328:45 Ratn. p. 46; Col. Dig. I, 4, 163.

328:46 Ratn. p. 47; Col. Dig. I, 5, 166.

328:47 Ratn. p. 47; Col. Dig. I, 5, 166; Viv. p. 32.

328:48 Ratn. p. 47; Col. Dig. I, 5, 167; May. p. 112.

328:49 May. p. 112; Col. Dig. I, 5, 167. 'As if it were their own,' i.e. with interest. Ratn.

329:50 Ratn. p. 54; Col. Dig. I, 5, 189; Viv. p. 39.

329:51 Ratn. p. 57; Col. Dig. I, 5, 201; May. p. 113. Regarding promises made under the influence of love or wrath, see Kâtyâyana X, 53, 54.

329:52 Ratn. p. 64; Col. Dig. I, 5, 174; May. p. 114; Viv. p. 37.

329:53 Vîram. p. 354 ('Kâtyâyana'); Col. Dig. I, 5, 217; Ratn. p. 60. 'Protector' means husband. Ratn. 'Barbers,' nâpita, are referred to according to the reading of the Ratnâkara. The Vîramitrodaya reads nâvika, 'sailors,' which reading is mentioned as a varia lectio in the Ratnâkara. Colebrooke has 'shepherds.'

329:54 Col. Dig. I, 6, 244; May. p. 109.

330:55 Col. Dig. I, 6, 236; May. p. 109; Ratn. p. 67; Viv. p. 43. The term prâya or prâyopavesana corresponds without doubt to the modern custom of Dharna, or 'fasting upon' a debtor, when the creditor places himself before the debtor's house and threatens to starve himself to death, unless the debt be paid. It is true that some commentators interpret prâya by 'importunate demands' (prârthanâbâhulya or prârthanâ).

330:56 Col. Dig. I, 6, 238; May. p. 109, &c. 'With a crafty design,' as e.g. when valuable ornaments are borrowed from the debtor, on the pretence of using them at a festivity. 'An Anvâhita deposit' is an article deposited for delivery to another person. Vîram. p. 333.

330:57 Col. Dig. I, 6, 240.

330:58 Col. Dig. I, 6, 239.

330:59 Ratn. p. 71; Col. Dig. I, 6, 246.

331:60 May. p. 110; Col. Dig. I, 6, 255. The new bond is to be one in which the interest is calculated on the interest added to the principal, i.e. on the doubled principal.

331:61 Ratn. p. 72; Col. Dig. I, 6, 259. The comparison here proposed relates to the case when a pledge for use has been accidentally destroyed, and a new bond is executed, in which the interest is calculated on the principal together with the lost usufruct.

331:62 Ratn. p. 75; May. p. 110; Col. Dig. I, 6, 160.

331:63 May. p. 110; Col. Dig. I, 6, 161.

63-65. Ratn. p. 25.

331:64 May. p. 110; Col. Dig. I, 6, 162.

331:65 Col. Dig. I, 6, 163. 'The nature of the loan,' whether it be gold or silver, &c.; 'or the like,' such as the pledge given, &c. Ratn.

332:66 Ratn. p. 80; Col. Dig. I, 6, 288. The term vriddhi, 'interest,' is interpreted 'forfeiture' by a certain number of commentators. This erroneous interpretation has been adopted by Colebrooke. Sir W. Jones has the correct translation.