Chapter XVI. Contracts

Volume III pp. 411–461

Chapter XVI. Contracts

There are only three titles of law, viz. recovery of debts, the relation of husband and wife ( stripuṁsayoga ) and partition of wealth ( dāyabhāga ) that are of importance to modern Hindus, since to a very large extent they are even now governed in these matters by the ancient Hindu Law as interpreted by the commentatorṣ These three topics therefore have to be described in detail while other titles will not and cannot be allowed to occupy much space. In almost all smṛtis and digests of Hindu Law ṛṇādāna (recovery of debts) is treated of first. Therefore here also that subject will be taken up first. A good deal of the matter falling under the title of the relation of husband and wife has already been dealt with in the 2nd volume of the History of Dharmaśāstra pp. 427-636. The topic of dāyabhāga will be dealt with last of all, the other topics being taken up in the same order as in Manu. Many of the vyavahārapadas are concerned with the law of contracts in various aspects, viz. the contract of debt, of pledge or mortgage, of bailments, of sale, of partnership, of hire and service.

Our writers do not set out with an analysis of the conception of contract in general. They had before them the ancient 18 titles of law, many of which related to various kinds of contracts and therefore they take up one title after another, in the order contained in Manu or in Nārada ( as the Sṃ C II. p. 206 expressly says ). But it is not to be supposed that they did not evolve certain general principles about contractṣ They do say a good deal about the competence of persons to enter into contracts, about fraud vitiating all contracts, about damages for breach of contract &c. Similarly the dharmaśāstras do not lay down a general Code of rules applicable to all transfers of immovable property, nor do they treat of transfers by way of sale, mortgage or gift in separate sections What they have to say on these transfers is tacked on to some vyavahārapada e. g. they speak about sales and exchanges of land under asvāmī-vikraya and sīmāvīvāda, about gifts under dattapradānika and about mortgages under ṛṇādāna. As this work has to represent what the ancient law was like the same arrangement has been followed here. Similarly the law of crimes is not to be found in one place. It is scattered under different titles of law such as vākpāruṣya, daṇḍapāruṣya, sāhasa, strīsaṅgrahana and steya; nor is there a complete analysis of intention or motive or of the right of private defence, although all these subjects are briefly dealt with in the smṛtis in different places

A great deal has been said by ancient writers about what persons are competent to enter into transactions (vyavahāra) The Arthaśāstra ( in III. 1 )¹ has a lengthy disquisition on it. Briefly, it holds that dependent persons, minors, extremely old people, those charged with grave sins, sannyāsins, persons who are devoid of a limb and those who are addicted to vices (like drinking and whoring) are incompetent and agreements made with such people are invaliḍ Among dependent people Kauțilya mentions a son when the father is alive (and manages the affairs), a father when he has a son (who manages the family affairs), a brother who has left the family, a younger brother whose share has not been separated, a woman whose husband or son is alive, a slave or a hired servant. He states that these may enter into binding agreements if those on whom they are dependent authorize them to do so. He further says that contracts made by persons that are at the time of making them intoxicated or are under the influence of wrath or are distressed or are of unsound mind or under duress (imprisoned or confined) are invaliḍ Yāj (II. 31-32) concisely puts down the same propositions by saying that all transactions brought about by force or fraud should be declared ( by the king ) to be unenforceable, so also those entered into by women or the other persons specified above or entered into at night, or in the interior of the house or outside the town or village (in a forest &c.) or with one’s enemy or by persons unconnected with or unauthorized by the persons who are to be bound by them ². Manu (VIII 165 and 168) also declares that all transactions (such as sale, mortgage, gift) brought about by force or fraud are null and voiḍ Nāṛ. IV. 26-42 treat this subject ³ exhaustively. Some of Nārada's dicta are interesting. He says: 'in this world three are independent viz. the king, the Vedic teacher and the head of the house in his own house (32). Wives, sons and slaves are not independent; the head of the house has independent power as to what belongs to him by inheritance (34).' Kāt. (497) also prescribes that one should not give a loan to women, minors or slaveṣ When the texts say that women are incompetent to make contracts, what is meant is that they cannot make contracts binding on their husbands or family or against the family property. Women are not inherently incompetent to deal with their own separate property except that the husband has some control ( these matters will be discussed at length later on under strīdhana ). Another proposition laid down by Yāj II 23, Nāṛ. IV. 97, Kāt. (517) and others ⁴ is that in all transactions relating to a debt or any other title of law the last act is the deciding factor; but in the cases of gift, pledge or purchase each prior transaction ( of gift &c. ) is of superior efficacy to the succeeding one. ⁵

After the establishment of British rule in India during about 150 years numerous publications dealing with Hindu customs and usages and the Hindu law of debts, contracts, adoption, family rights, partition and inheritance have been publisheḍ It is impossible to give an exhaustive list of these nor is it necessary to do so. Most of them have now only an academic or historic interest. But a few of them must be mentioned for their worth, for purposes of study and for a knowledge of the modern Hindu Law as administered by the British Indian courtṣ They are : Bannerjce's 'Hindu Law of Marriage and strīdhan' (5th eḍ of 1923); Colebrooke's Digest of Hindu Law, which is a translation of Jagannātha's Vivādabhangārṇava (3rd eḍ of 1864, Madras); the several volumes of the Bombay Gazetteer and the Gazetteers of the other provinces and the Imperial Gazetteer of India; A. Ghosh's 'Law of endowments' (2nd eḍ, 1938); Dr. Jolly's Tagore Law Lectures on Partition, Inheritance and Adoption and Recht und Sitte translated by Prof. Batakrishna Ghosh (1928)); Mayne's Hindu Law (10th eḍ of 1938), Mulla's Hindu Law (9th eḍ of 1940), K L Sarkar's 'Mimansa rules of interpretation'; G. C. Sarkar's Hindu Law and Hindu Law of Adoption (2nd eḍ 1916); Rajkumar Sarvadhukari's 'Principles of the Hindu Law of Inheritance' (2nd eḍ 1922), Dr. P. N. Sen's 'General Principles of Hindu Jurisprudence' (1913); Steele's Law and custom of Hindu castes' in the Deccan (London, 1868), Stoke's Hindu Law Texts (a work constantly quoted by the Courts and the Privy Council) containing English translations of the Mitākṣarā, the Dāyabhāga, the Vyavahāra-mayūkha, the Dattakamīmāmsā, the Dattakacandrikā, the Dāyakramasangraha; West and Buhler's Digest of Hindu Law.

The idea of the liability to pay off one's debts was developed in India in the most ancient timeṣ In Rg VIII. 47. 17⁶ the poet exclaims 'Let us drive away the evil effects of bad dreams as we pay off debts'. In Rg X 34. 10 (the gambler's lament) it is stated that the gambler, because he owes a (gambling) debt, is afraid and approaches the houses of others at night, desiring wealth'.⁷ This indicates that a debtor was afraid of being detained by his creditor in those days Rg. VIII. 66. 10 indicates that money-lenders made a stipulation to receive double of what they lent, 'Indra strikes by his power all pains who make representations of taking double'.⁸ The Ait Br 33 1 (rṇam-asmiṇ san-nayāti)⁹ employs the very verb 'san-nayāti' which occurs in Rg. VIII. 47. 17. The Atharvaveda VI 117. 3 and Tai Br III 7. 9. 8 contain the same verse about a man being free from the obligations of this world, the next world (of pitṛs) and the third world (the world of gods).¹⁰ The Tai. S. (III. 3. 8. 1–2) uses the very word ‘kusīda’, which occurs¹¹ in the Dharmasūtras and smṛtis (for money-lending) when it says, ‘O Agni! whatever debt has not been paid back by me, the tribute that I owe to Yama, here do I make return of it; may I be freed from that debt!’. The Sat. Br. XIII. 4. 3. 11 associates kusīdin with black magic in the Pariplava. The Nirukta (VI. 32) while commenting on Rg. III. 53. 14 explains the word ‘Pramagaṇḍa’ occurring therein as ‘one who is born of a family that is extremely usurious’.¹² Pāṇini employs the technical word ‘uttamarṇa’ (creditor) in his sūtra ‘dhārer-uttamarṇaḥ’ (L 4. 35), he speaks of ‘ādhamarṇya’ (the position of a debtor) in II. 3. 70 and the word ‘pratibhū’ occurs in Pāṇini II. 3. 39, the word ‘vṛddhi’ (interest) in V. 1. 47. Pāṇini (IV. 4. 31) derives the words ‘kusidika’ and ‘kusidikin’. It is noteworthy that Pāṇini does not derive or mention the word vārdhuṣika, which is employed by even Āp. Dh. S and Bauḍ Dh. S and which is derived by Kātyāyana (the grammarian) in Vārtika 3 on Pāṇini IV. 4. 30, in which Pāṇini refers to such words as ‘dvaiguṇika’ or ‘traiguṇika’ which were applied to people that carried on the condemned methods of money-lending viz. extorting twofold or threefold of the money lent (the sūtra is ‘prayacchati garhyam’). Brahmanaspati is spoken of as ‘one who recovers a debt (ṛṇam-ādaduḥ) in Rg II. 24. 13 and the Ādityas as those ‘who, themselves being the observers of ṛta (the universal Law of Right), collect¹³ debts’ (Rg. II. 27 4) In Rg. VIII 32. 16 it is said that those priests who extract (and offer) Soma juice do not indeed owe a debt (to the gods) Divodāsa is said in Rg VI 61. 1 to have been the gift of Sarasvatī to Vadhyrāśva as a son to pay off debts (ṛṇcyuṭam)¹⁴ These passages certainly establish that in the remote ages of the Ṛgveda it was a firm belief that men were under obligations to gods and pitṛs, which could be fulfilled only by worship (yajña) and by the birth of a soṇ These passages contain the germ of the doctrine of the three religious and spiritual debts that a man owed to gods, Manes (pitṛs) and sages, which he paid off by sacrifices, by the birth of a son and by vedic study (vide Tai. S. VI. 3. 10. 5, Śat. Br. I. 7. 2. 11 and Ait. Br. 33. 1 quoted in H. of Dh. vol. II. pp. 270, 560 notes 621 and 1302 and above ṇ 669). Gradually further universal obligations came to be added to this theory of spiritual debtṣ The Ādiparva (120. 17-20) holds that men owe four debts, viz. the three vedic ones and the fourth to humanity in general (which is paid back by goodness to all) and Anuśāsana 37. 17 raises them to five (adding brāhmaṇas and guests to the well-known three)¹⁵. It appears to me that this theory of spiritual debts being already in the air, the same sanctity came gradually to be transferred to one's promises to repay monetary debts and carry out other secular engagementṣ The word ṛṇa had been applied both to spiritual and secular debtṣ It is on account of this that the son was not only desired for repaying the spiritual debt owed to one's ancestors, but he was also expected to free his father (if the father could not himself repay the monetary debt) from the liability he incurred to his creditor. Nāṛ. IV. 5-9 puts this clearly and most emphatically: 'fathers desire to have sons for their own benefit thinking in their heart 'he will release me from liability to creditors and debtors' (or probably 'from high or low debts' i. e. spiritual and earthly debts). Three deceased (ancestors) must be honoured (by a man) and he must subsist on three (descendants) that come after hiṃ These (the first three) series of ancestors rely (for repayment) of their twofold debts (spiritual and secular) on the fourth in descent. If a man fails to pay on demand a debt or promised gift that sum (by the addition of interest) goes on growing till it amounts to a hundred crores and when a hundred crores are reached he is born again and again in the house of his creditor as a slave in order to repay the debt (by his labour). If an ascetic or a brāhmaṇa perpetually keeping the sacred fire (agnihotrin) dies without discharging his debts, the whole merit due to his austerities and the perpetual tending of fire belongs to his creditorṣ¹⁶ Kat. (551, 591) expresses the same idea but adds that a debtor who has not repaid money borrowed may be born as a slave, a servant, a woman or a beast in the house of his creditor. It was this belief that led to the doctrine of the pious obligation of the son to pay off his father's debts even if he received no property from the father.¹⁷

Nārada IV. 98 defines 'kusida' in a rather obscure verse as 'the receiving of money paid in consequence of the original (amount advanced) and the profit (agreed to be paid) thereon and those are called kusidin who maintain themselves by this occupation'. Bṛhaspati (S. B. E 33 p. 320 verse 2) derives¹⁸ kusida as 'that is called kusida, which is taken fourfold or (even) eightfold without any qualm (by a person) from a wretched man who is sinking (or distressed)'. Nāṛ IV. 110 defines vārdhusa as the interest (in kind) on grain,¹⁹ but Āp. Dh S I. 6. 18. 22 and Bauḍ Dh. S. employ the word 'vārdhusika' and Āp. Dh. S. I. 9. 27. 10 has a verse in which the word vrddhu occurṣ Vas (II. 41-42 = Banḍ Dh. S I. 5. 93-94) quotes two verses: ‘ a vārdhuṣika (usurer ) is one who taking cheap grain lends it on condition of receiving a quantity of grain of high price and is condemned among the brahmavādins ( students of the veda ) Brāhmaṇa murder and usury were weighed in a balance; the murderer of a brāhmaṇa rose to the top while the usurer trembled’. Here usury of the type of the one described in Vaṣ II 41 (and not all lending of money at interest) is condemned as a great sin Gaut. XII 26, Vas II 50, Kaut III 11, Manu VIII 140–141 and others declare it righteous (dharmya) moneylending when an 80th part is stipulated as the interest per month.²⁰

Megasthenes (fragment XXVII B p. 72) states ‘The Indians neither put out money at usury nor know how to borrow,’ but he is under some misapprehension, for he again says (p 73) ‘ one who is unable to recover a loan or deposit has no remedy at law. All the creditor can do is to blame himself for trusting a rogue’.

Nār. IV. 1 states that the principal topics under the title of ṛṇādāna are seven · what debts must be paid and what not; by whom, where and in what manner (they are to be paid); and the rules about advancing the loan and receiving it back The first five of these relate to the debtor and the last two to the creditor Bṛhaspati (S. B. E. 33 p. 320 v 4) says that interest (vṛddhi) is described to be · of four kinds by some, of five kinds by others and of six kinds by still others Nār. (IV 103–104) names four kinds and defines them, viz kāntā (interest that is stipulated by the debtor himself), kālikā (interest accruing and payable every month), kāyikā (interest of a pana or quarter. pana to be paid every day without the principal being liable to be reduced, whatever interest may have been recovered), cakravṛddhi (interest on interest called compound interest). Manu VIII 153 mentions these four and commentators thereon give varying interpretations Bṛhaspati (S B E. 33 p 321 verse 6) and Vyāsa (q by Sm C II p 154) define kāyikā as interest received from the body of a milk received from a cow pledged or the work put in by a slave or by a bull pledged Br (S B. E vol 33 p 321 verses 7–8) adds two more varieties viz. śikhāvṛddhi²¹ (hair-like interest i e. interest payable every day and so growing every day, just as the top-knot on one's head grows every day ) and bhogalābha (profit by enjoyment i e. making use of a house or taking the produce of a field in lieu of interest in the case of a mortgage). Gaut. ( XII. 31-32 ) mentions the six, but instead of bhogalābha he uses the word 'ādhibhoga', which is defined by Kāt. ( 501 ) as a transaction in which the complete enjoyment of the thing pledged or mortgaged is to be the interest Kāt. ( 498-500 ) defines kārita, śikhāvṛddhi and bhogalābha

Br. ( S B E 33 p. 319 verse 1 ) states²² that the creditor should always advance a loan after taking an adequate pledge or a deposit (with a mutual friend) or a reliable surety and after committing the transaction to writing or making the loan in the presence of witnesseṣ The interest may be either stipu-lated (kṛta) at the time of the loan or not stipulated (akṛta), as indicated in Viṣṇu VI 4. Yāj. II 38 and Viṣṇu Dh. S. VI. 3 state the general rule that debtors of all castes may pay to creditors of all castes the interest settled by mutual agreement and the rate of interest stipulated may be with reference to an article pledged or with reference to a surety given or with reference to a debt totally unsecureḍ Though this was the general rule, Manu VIII 153 and Br condemn taking even agreed interest if it exceeds the rates (to be specified below)²³ allowed by the smṛtis or taking the agreed heavy interest for more than a year or taking compound interest or more than double the principal or the capitalization of interest. The smṛtis lay down various rates of interest from different points of view. Gaut XII 26, Yaj. II. 37, Bauḍ Dh S I. 5. 90-91, Manu VIII, 140 (=Nār IV. 99), Br (S B E vol 33 p 320 v.3), Vṛddha-Hārita VII 235 and others state the rule first laid down by Vasiṣṭha that it is just and proper to take every month ⁵¹⁄₈₀th part of the principal lent, so that the principal is doubled in six years and eight months,²⁴ and Viddha-Hārita adds that double the interest stated above may be taken when there is nothing pledged to secure the debt. Yāj and Vyāsa provide that this rate is the proper one when something is pledged or mortgaged by way of security. Yāj. II. 37, Manu VIII. 142 (=Nār IV. 100), Viṣṇu Dh S VI. 2 provide an option that two, three, four or five per cent per month may be charged as interest in the order of the varnas²⁵ (i. e. 2 per cent per month for a brāhmaṇa debtor and so on). Yāj. II. 37 allows these rates only if there is nothing pledged by way of security. Vyāsa²⁶ (in Par M. III. p 221) provided that the monthly rate of interest was 8th of the principal lent when a pledge or mortgage was given as against the loan, 5th when only a surety was offered and two per cent per month when money was lent on personal security. The Anuśāsanaparva 117.20 condemns to Hell those who take exorbitant interest. Kaut. prescribed (as stated in ṇ 688) fines for taking heavier interest than that allowed by hiṃ Kat (498) provides that if a debtor himself stipulates a higher rate of interest than is allowed by the śāstra in times of difficulty (in order to induce the creditor to part with his money) that stipulated interest must be paid but a rate of interest imposed by the creditor otherwise (by force &c.) should not be enforced by the Court.²⁷ It is probable that these rates are specified because of the economic conditions of those times which proved too much even for the ancient sages or different mercantile usages about interest prevailed in different countries at different times, as expressly stated by Nār. IV 105-106 that²⁸ these high rates (including eight per cent per month) had to be paid according to the law merchant in different countrieṣ Manu VIII. 141 (=Nār. IV. 100) holds that to take two per cent per month (on unsecured debts) is not improper. In medieval times also the rate of interest was rather high e.g. interest at 25 per cent is said to have been charged on a deposit of six gaḍyāṇas kept with the mahājanas of Śivapura (vide Yewur Inṣ in E. I. XII. p. 273) Yāj. II. 38 provides that those debtors who carry on trade by traversing dense forests and those who are sea-faring traders should respectively pay 10 per cent and 20 per cent and the Mit adds that these exorbitant rates are allowed because of the great danger of the loss of even the principal as the debtors may perish by ship-wreck or from the attacks of robbers and wild beastṣ Manu VIII. 157 leaves the rate of interest in the case of seafaring merchants to those who are clever in these matters and who know the proper time and place. Kaut. (III. 11) states²⁹ that the prescribed ( dharmya ) rate of interest is 1½ pana per cent per month, but in transactions (or in commercial usage) it is five panas per cent per month (as the highest, it appears), that those who traverse forests and those who carry on maritime trade should pay respectively ten and twenty per cent per month, that those who exceed or induce creditors to exceed these rates should be punished with the first amercement, that each of the witnesses to such usurious transactions should be punished with half of the above fine.

Other rules laid down in the smṛtis relate to the maximum that can be recovered by a creditor from a debtor at one time. All are agreed that the creditor cannot recover at one time from the debtor for principal and interest more than double of the money lent. Vide Kaut. (III. 11), Manu VIII 151, Gaut XII 28, Yāj II 39, Viṣṇu Dh VI 11, Nār IV. 107, Kāt (509). This is called the rule of dvāguṇya³⁰ in the smṛtis and of dāmdūpaṭ in modern timeṣ It will be explained in detail a little below. As regards the interest in kind on articles lent, there is some difference of opinion, which need not be gone into in great detail. Manu VIII 151 and Gaut XII 33 state that on loans of grain, fruits, wool and beasts of burden, and products like ghee and milk had from cattle the total recoverable cannot exceed in any case five times of what is lent. Yāj II 39 states III Differential rates of interest

that in the case of cattle and female slaves when loaned their progeny is the profit, in the case of liquids (like oil and ghee) when loaned the maximum recoverable is eightfold and in the case of clothes and grain it is respectively four and three timeṣ Vaṣ II. 44-47 says the maximum recoverable at one time in the case of grain, flowers, roots, fruits and fluids (like oil) is three-fold and eight-fold in the case of things that can be weigheḍ Vide Viṣṇu Dh. S VI. 12-15 Viṣṇu VI 17 (anulbānām dayumū) provides that where no special rule is laid down the maximum recoverable is to be only double of what is lent. Kāt. (570-572) states³¹ that the maximum recoverable in the case of precious stones, pearls, corals, gold, silver, fruits, silk, wool is double of what is loaned; of oils, liquors, ghee, raw-sugar and salt and land eight-fold, of baser metals five-folḍ Vide Br. (S B E vol. 33 p. 322 verses 13-16) and V Nirnaya p 229 (quoting Bharadvāja) for similar provisionṣ

The rule of what is called dāmdūpul in modern times express-ed laconically by Manu VIII. 151 and Gaut XII. 28 is thus that 'the amount of principal and interest recoverable at one time in a lump sum cannot be more than double of the money lent'. As a debt was recoverable not only from a man himself but also from his three descendants and as therefore there was practi-cally no period of limitation for bringing a suit for money lent, creditors had great temptations to allow interest to go on increasing. Therefore the sages who condemned the profession of usury and particularly waiting long for the increase of interest³² laid down that whatever the length of time during which the principal was at interest and whatever the rate of interest might have been, the creditor could recover by suit in a lump sum only double of the money lent. This acted as a great check on the creditors' rapacity. Several propositions are laid down in the Mit.,³³ the Vyavahāramayūkha and other digests that graft exceptions on the general rule, and that flow from the interpretation of Manu VIII. 151 in both readingṣ The first modification is that if interest is received every day, month or year and is not claimed in a lump sum at one time then the total interest received by a creditor may be even several times more than the principal lent Br. provides (S. B. E. vol 33 p. 321 verse 11 ) that every day interest or bodily interest and bhogalābha may be taken by the creditor (irrespective of the question of dvaigunya) as long as the principal is not paiḍ³⁴ (2) Further, if after the interest has accumulated for some time, there is a fresh agreement with the same debtor whereby the sum lent together with interest due is taken as the principal and interest is agreed to be paid on the amount so arrived at, then the total recoverable after this fresh agreement may exceed double the original sum lent. Manu (VIII 154–155) and Br (S. B. E vol. 33 p 331 verse 60 ) allow such a fresh agreement. But if the debtor does not make a fresh agreement then the rule of dāṁdupat would apply. (3) If after the sum due to the creditor has become double of the principal lent, the creditor accepts another man as the debtor (who takes the liability on himself), then the creditor may recover from the substituted debtor after the lapse of years an amount which may be more than double of the sum originally lent. (4) If the debtor pays a part of the principal or if the creditor makes a concession (called ‘reka’ in the Mit. on Yāj. II 39) and reduces the total recover- able or if the debtor receives an additional amount of money (called ‘seka’ in the Mit.) and it is added to the original amount borrowed and a fresh agreement is made between the parties to put the whole to interest, then the rule of dāṁdupat would not apply The rule of dāṁdupat has been acted upon by the courts in India in modern times³⁵. Though under the Transfer of Property Act before its amendment in 1929 there was a conflict of decisions, since 1929 it is settled that the rule of dāṁdupat does not apply to mortgages governed by the Transfer of Property Act. But the rule is so reasonable and humane that the Deccan Agriculturists' Relief Act (XVIII of 1879) has made (by sec. 13) the rule of dāṁdupat applicable to all agriculturists as defined by the Act, whether Hindus or non-Hindus; and the Bombay Agricultural Debtors Relief Act (of 1939), sec. 42, the Madras Debt Conciliation Act (XI of 1936, sec. 16) do the same.

A loan has to be returned on demand if no time is fixed for repayment or on the expiry of the time (if one has been fixed by the parties) or when interest ceases on account of becoming equal to the principal (Br. in S. B. E. vol. 33 p. 328 verse 47 ). Interest stops when on the debtor offering to pay the loan the creditor refuses to accept it and the debtor deposits the money in the hands of a third person (Gaut. XII. 30, Yaj. II. 44). With Yaj. II. 44 section 84 of the Transfer of Property Act (IV. of 1882 ) may be compareḍ Vaṣ II. 49 states the remarkable rule that interest stops the moment the king dies and begins to run only after the coronation of the successor.³⁶ Nār. II 39 (S. B. E. vol. 33 p. 33) provides that no interest runs on the price of commodities, on wages, on a deposit, on a fine, on what has been idly promised (to bards and the like) and on the stake won in gambling, unless there is a special or express agreement to pay interest.³⁷ Kāt. (508) has a similar verse,³⁸ but adds hides, crops, liquor, bride-price and suretyship debts to some of those mentioned by Nār. Kaut. (III. 11) provides that no interest runs where the debtor is a person engaged in a Vedic sacrifice of long duration, or is suffering from a disease or is staying at his teacher's house (gurukula) for study or is a minor or is a man without any substance. As regards some cases where originally a thing is lent to a person out of friendship or because he asked a loan of it, Nār. (IV. 108) and Kāt. (502-505) lay down certain rules which are quoted in the Mrt. (on Yāj. II 38) and other workṣ Nār. (IV. 108) prescribes³⁹ that no interest ever attaches to things loaned through friendship, unless there is an express stipulation to that effect; but even in the absence of a stipulation interest starts running after the expiry of six monthṣ Nār. IV. 109 and Kāt. (505) both lay down that a loan (of money or an article) made through friend- ship cannot begin to earn interest as long as no demand is made for its returṇ If the debtor refuses to return it after it is demanded interest begins to run at the rate of five per cent. Kāt (502-504)⁴⁰ lays down three propositions about yācātaka (a temporary loan of money or of an article): (1) When a person takes such a loan and goes to another country without III ] returning it, that loan begins to acquire interest after a year from the date of the loan ( though no demand be made); (2) if a person after taking a loan goes to another country without⁴¹ returning it even when pressed by the lender to return it that loan begins to acquire interest three months ( after demand ); (3) when the borrower of a thing does not return it even though he is pressed to return it, the king should make him pay interest from that day (i. e. day of demand ), though it was not agreed upon, though he remained in the country and though he be unwilling to pay interest. The Madanaratna says that in these cases where no interest is settled beforehand and where the texts do not specify the rate (as Kāt. 505–506 do viz. what is lent through friendship, a deposit, balance of interest, unpaid purchase money, if not returned on demand, begin to carry ‘interest at five per cent per month ), the rate of interest would be the one stated by Yaj. II. 37 (viz. 1/80th per month) and Viṣṇu VI 4. (akṛtāmapi vatsarātikrameṇa yathāvṛtām ).

Ādhi⁴² means pledge of a movable or mortgage of im- movable property. Nār. IV. 117 remarks⁴³ that in lending money an ādhi and surety are the two sources that inspire confidence (in the creditor that his money will be safe) and a document and witnesses are the two modes of proof that will establish (the existence of a debt). An ādhu is so called because the creditor is authorised to wield power over it or it is placed within his power (Nār. IV. 124 and Mit. on Yaj. II. 58)⁴⁴. The word ādhi occurs in Āp. Dh. S. I. 6. 18. 20⁴⁵ (which includes among those who are unfit to be invited at a śrāddha ‘one who subsists on ādhi '). Gaut. XII. 29 also refers to ādhi. Kaut (III. 12) briefly deals with ādhi and after stating some rules extends the principles of upanidhi (deposit) and debt to it. Manu VIII. 165 employs the word ‘ādhamana' in the sense of ‘mortgage' According to Br.⁴⁶ (S. B. E. vol. 33 p. 323 verse 17) an ādhi is of four kinds viz. of movable property, of immovable property, gopya (to be kept in custody of the pledgee only), bhogya (to be enjoyed). Nār. IV. 124 first divides ādhi into two sorts, viz. one that is to be redeemed within a certain time fixed (by agreement at the time of contracting the debt) or to be retained till the debt is paid off and Nār. IV. 125 again subdivides each of these two into gopya and bhogya. This latter division was known to Gaut. XII. 32 Manu VIII. 143, Yaj. II. 59, Kāt. (576). The subdivisions of ādhi are made from several points of view viz. the nature of the property, the form of the pledge, the men- tion or non-mention of a period and the evidence to establish it. The Mit. on Yaj. II. 58 explains⁴⁷ that the first kind of ādhi mentioned in Nār. IV. 124 contains the conditions that the money will be repaid at a fixed time and that if the money be not so paid at the time fixed the thing pledged or mortgaged will belong to the creditor. Yaj. II. 58 sets out three provisions viz. (1) when a time is fixed for payment, the thing pledged or mortgaged is lost to the debtor if the time fixed is allowed to pass without there being any repayment (whether it be an ādhi that is to be merely kept or whether it is one to be enjoyed); (2) but if no time be fixed the thing given as security is not lost. to the debtor at all, when it is an ādhi that is to be enjoyed; (3) if no time is fixed and the ādhi is only to be kept (gopya) then it is lost to the debtor only if it is not redeemed even when the debt has grown to double of the principal by non-payment of the interest agreed upoṇ There is a period of fourteen days’ grace after this, as stated by Br. (S. B. E. ⁴⁸ vol. 33 p 324, verses 27–28) that when the principal has been doubled or the stipulated period in the case of a pledge delivered for a certain time only has expired, the creditor becomes the owner of the pledge, after waiting for a fortnight during which the debtor may repay the debt and redeem his property. Gaut. XII 29, Manu VIII. 143, Yaj. II 58, Viṣṇu Dh S. VI. 5 provide that an ādhi which is mortgaged with the condition that the fruit or profits are to be enjoyed bears no interest nor can the creditor, even after keeping such an ādhi for a long time, make a gift of it or sell it Medhātithi on Manu VII 143 holds that a mortgagee with possession who is to enjoy the produce cannot, by virtue of the last quarter of Manu VIII. 143, make a sub-mortgage ( called anvādhi ). Kullūka on ⁴⁹ the other hand says that it is common practice in all countries for a mortgagee to execute a sub-mortgage of land and the like and that Manu VIII. 143 does not forbid it. Prajāpati ⁵⁰ (q. by Par. M. III. p. 242 ) defines a deed of sub-mortgage: ‘if the creditor pledges to another the thing already pledged to him for the same amount ( for which it was pledged to him ) he should pass a fresh deed of pledge ( or mortgage ) and should hand over the former deed to his own creditor.’ It appears that sub-mortgages came to be recognized rather late. Bhāradvāja states that if a sub-mortgage be effected without the mortgagor’s consent, the mortgagee would lose his money. The general rule was that an ādhi (whether of movable or immovable property) that was bhogya carried no interest but the profits were to be taken in lieu of interest (vide Kāt 516 )⁷¹⁰ and the debtor would in this case get back his property on paying the principal Kaut (III 12) states⁷¹¹ that immovable property mortgaged may be such that it can be enjoyed only by expending labour or without expending one's own labour the creditor may enjoy the fruits or income thereof But as noted by Vyāsa and Bharadvāja⁷¹² the stipulation about a bhogya ādhi may be that the income from the property is to be taken as in payment of the whole interest and part of the principal This latter is called sapratyaya-bhogyādhi and the other variety where the income is taken in lieu of interest only is called apratyaya-bhogyādhi The Mit. on Yāj. II. 64 after citing a text of Bṛhaspati refers to these two varieties ( though it does not use these terms ) and adds that if the income is not sufficient to meet the interest wholly then the debtor may have to pay the principal and the unpaid part of the debt before redeeming his property. The Mit. ( on Yāj. II. 64) states that the appropriate name 'kṣayādhi' is given by the people to what is called (above) as sapratyaya-bhogyādhi Bharadvāja states that on taking an account (where there is an agreement to apply the income towards interest and reduction of the principal ) if the creditor has been overpaid he is to restore the overpaid amount to the debtor and that if a portion of the principal remains unpaid the debtor has to repay it.

If a man first mortgaged his property and then sold it, the purchaser took it subject to the rights of the mortgagee (Vasiṣṭha quoted by Sṃ C II. p 145) If a person executed a mortgage, a sale and a gift of the same thing on the same day, then the donee would take one-third of the thing and the mortgagee and purchaser would share the remaining two-thirds in proportion to the money paid by each⁵⁴. If a person was liable to pay several debts, some secured by a pledge or mortgage and some taken on personal security, the latter were to be paid first and redemption of the mortgage was to be ordered afterwards, according to Bharadvāja (q. by Vy. Nir p. 245).

The restriction that more money should not be taken from the sub-mortgagee than what was advanced to the mortgagor was for the benefit of the latter. The Par. M. (III p. 242) provides that a sub-mortgage can be made only when the amount due has risen to double the principal, but that if the owner consents a sub-mortgage may be made even before that contingency ariseṣ

Kāt. (522) requires that an ādhi becomes valid when such particulars as the boundaries of the field or house and the village (in which it is situated) are specified⁵⁵. Kāt. (518) further provides that a writing of pledge or sale or gift is superior to a similar transaction made in the presence of witnesses only. If the same field or other thing is mortgaged or pledged to two persons separately, Viṣṇu Dh. S. V. 185⁵⁶ and Br. (S. B. E. 33 p 326 verse 34) prescribe⁵⁷ that the one who got possession first (without force) is entitled to preference. This shows that under ancient Hindu Law possession was nine points of law and that hypothecation without delivery of possession was known to Kāt. and other smṛti writers, even if earlier smṛtis did not recognise an hypothecation without possessioṇ Yaj. II. 60 and Nār. IV. 139 emphatically assert that a pledge or mortgage becomes perfect or effective only if there is enjoyment and not otherwise. This is to be taken along with Yāj. II. 23 and so the first in time shall prevail only if the first is accompanied with possession If a sale or mortgage be made before witnesses to one man and in writing to another, the latter prevails over the former⁵⁸. If a debtor were to pledge or mortgage the same thing to another after pledging it to one and without redeeming the first debt, Viṣṇu Dh. S. (V. 181–182) prescribed⁵⁹ the drastic measure of corporal punishment (whipping or imprisonment) if the land mortgaged was a gocarma or more in extent or a fine of 16 suvarnas if it was lesṣ Kāt. (517) in similar circumstances made the debtor liable to the fine imposed on a thief Kāt. (519–521 q. in Sṃ C. II pp 144– 145 and V. P. pp. 240–241) states that in a competition between a document of pledge which does not give particulars of the thing pledged or which refers to a thing not existing at the time and a document in which the thing pledged is described with particulars or in which the thing existed at the time the deed was executed, the latter is entitled to preference; similarly the pledge of a thing specifically described is superior to a prior pledge of all the debtor's property mentioned in general terms

If an ādhi deteriorates⁶⁰ in value (i e., becomes inadequate to meet principal and interest) or if it be lost or destroyed though proper care be taken thereof by the creditor, then the debtor must either pledge another adequate thing (in substitu- tion) or the debtor should return the amount due (Yāj II. 60, Kāt 524) The Mit on Yāj. II. 60 remarks that it follows from this that it is the duty of the pledgee to take proper care of the thing pledgeḍ Br. (S B E 33 p. 323 verse 19) expressly says that the pledge has to be kept carefully like a deposit, as otherwise interest is forfeited in case of its being damageḍ If a pledge which is to be kept only is enjoyed by the creditor, then the interest stops and if it deteriorates or is lost the creditor has to restore it to its former condition or substitute another of equal value; if a pledge to be enjoyed is lost or deteriorates by use then also the interest stops; and the creditor has to restore it, otherwise he will lose his principal (Yāj. II. 59 and the Mit thereon, Nār. IV. 125, 127) If a pledge is lost without any fault or negligence of the creditor, but through fate (i. e. accidents like fire or flood) or the action of the king, the debtor has to furnish another pledge or to pay the amount due (Kāt. 523, Yāj. II. 59, Viṣṇu Dh S VI 6, Gaut. XII. 39, Br., S. B E 33 p 323 verse 21). From the time of Gautama⁶¹ (about 500 B. C) onwards the rule about the care required of a pledgee, bailee, depositee was the same viz that he is to take of another's property kept with him as much care as he would take of his own Nār. (nihsepa 14) and Yāj. II. 67 lay down the same rule for all kinds of bailments Manu VIII. 189 (=Nār., niḥśepa, verse 12) illustrates what is meant by accidental losṣ

The debtor cannot redeem the pledge or mortgage before the time fixed by mutual agreement, but by mutual agreement he can redeem even before (Br. S. B. E. p 325 verses 32-33). If the creditor does not allow redemption when the debtor has a right to redeem and is ready to do so, the creditor may be liable to be fined as a thief (Yāj. II. 62). Acc. to Kaut (III. 12) the fine is 12 panas⁶².

It has already been stated above (p 429) that in certain cases (i.e. when it is a gopya ādhu) the ownership is lost to the mortgagor (i. e. in the language of modern law there is a foreclosure), if the amount has risen to double of the money lent without payment (even after the period of grace) or if the period fixed has passed without there being repayment (whether the amount has risen to double of that lent or not, acc. to Mit on Yāj. II. 58) But if at the time of contracting the debt the stipulation is to repay the sum lent with interest and there is no stipulation about loss of the ownership of the thing mortgaged (i. e it is like a simple mortgage of modern times), then there is no loss of ownership There is then only a power of sale in the mortgage So also in the case of a bhogyādhi the mortgagor or his heirs can redeem the property at any time by paying the principal and there is no loss of ownership to the mortgagor According to Yāj. II. 63 and Br.⁶³ (S B E vol 33 p 325 verse 29) the creditor can sell in the presence of (the debtor's relatives) and witnesses the ādhi, when the amount has grown to double of that lent or when the period fixed has passed, if the debtor has not redeemed and is absent or dead After meeting his own dues the creditor has, as said by Kāt. 529, to hand over the balance of the sale price to the king (i e probably to the court of the locality) Kaut.⁶⁴ (III. 12) provides that if the debtor is present and the creditor is afraid of the loss of his money because it may exceed the market value of the ādhi he may sell it with the permission of the judges (dharmastha) or he may demand a surety for assurance It appears from these passages that a sale through court and a right of private sale were both recognised in the case of mortgages in ancient India (as in modern times under sections 65 and 69 of the Transfer of Property Act).

There were two other special kinds of ādhi described in Yāj. II. 61 viz. cantrabandhaka⁶⁵ and satyankāra. The first occurs either when the creditor being known to be very honest the debtor gives as security a property of very great value for a small debt or where a debtor being known to be very honest a property of very small value is accepted as security for a large debt. In such a case there is no forfeiture or foreclosure of the property in any case but the king (or judge) should award only double the principal lent Another meaning is that in a caritrabandhaka it is the merit (apūrva or punya) arising from bathing in the Ganges or from performance of agnihotra that is given as security (i. e. he will forfeit merit on non-payment). In this case the creditor will receive double and there is no loss or forfeiture of ādhi. A pledge made with satyankāra occurs when at the time of making a pledge the stipulation is ‘I am liable to pay only double but there will be no loss of the thing pledged’ or (a second meaning of) satyan- kāra is that ‘when an earnest (a ring or the like) is given at the time of a sale and the vendor breaks the promise he has to pay double of the earnest'.

If the mortgagee is dead or absent abroad, and the debtor wants to redeem he may take back the ādhi after paying the amount due to the family i. e. to his sons and other agnatic relations or to his cognates and in the absence of these (if the creditor be a brāhmaṇa) to other brāhmaṇas (and if no brāh- maṇas be available) he may cast the money into water (Yāj. II. 62 and Nār. IV. 112–113) The Kaúsika-sūtra⁶⁶ (46. 36–40) contains provisions about casting the debt in the cemetery or where four roads meet if the creditor is dead and there are no heirṣ The Sangraha says that it may be thrown into water with a palāśa leaf to the accompaniment of Tai S. III. 3 4 1-2 quoted above (n 671) Another alternative is that the debtor may have a valuation of the ādhi made at the time when he wants to redeem (and the creditor is absent), and allow it to remain with the creditor but without interest (and redeem it at the valuation when the creditor comes or secure the price from the creditor if the ādhi be afterwards lost or destroyed, acc. to Mit. on Yāj II. 63)

Pratibhū A pratibhū or lagnaka (Br. quoted in ṇ 681 and Kāt. 530) means ‘surety’. Prātibhāvya (being a surety) was known to Gautama (XII 38) and pratibhū was known to Pāṇini (II. 3. 39). Suretyship requires the concurrence of three persons viz. the creditor, the borrower (called the principal debtor) and the person who agrees, for inspiring confidence in the creditor⁶⁷, to pay or indemnify if the principal debtor commits default. Manu VIII. 160 speaks of surety for appearance and for repayment of debt. According to the purpose of the transaction a surety is of three kinds (Yāj. II. 53 =Viṣṇu Dh. S VI 41 and Nār. IV. 118) viz for appearance, for payment and for honesty. The first undertakes to produce a person before a court and assures the court that the person concerned will not abscond from the country; the surety for payment agrees that in case the debtor does not pay the principal and interest, he will himself pay both; the surety for honesty assures the employer or other person with whom another man deals that the latter is an honest and good man, that he would not deceive and that reliance may be placed on him (vide Mit. on Yāj. II 53 and Sṃ C II. p 148 for these explanations). Br (S. B. E⁶⁸ vol. 33 p. 327 verses 39-40) speaks of four (including the three of Yāj. II. 53), his fourth being one who promises to deliver or restore the assets that are with the debtor (such as household furniture or ornaments). Yāj. and Nār. must be deemed to include this last under the surety for payment. Kāt. (530)⁶⁹ says that a surety (lagnaκa) may be caused to be given for repayment (of a debt), for appearance (upasthāna), in lawsuits, for honesty and for taking oaths (or ordeals). Acc. to Harita a surety is taken for five purposes viz. for keeping the peace (abhaya), for honesty, for repayment of debt, for delivering the debtor's property to the creditor, for appearance V. P. p 248 quotes Vyāsa (who mentions seven kinds of sureties) and remarks that all can ultimately be reduced to three varietieṣ

If the surety for appearance cannot produce the person at the time and place agreed upon, he should in that case pay to the creditor what he has bound himself to pay except where the debtor is prevented from appearing by act of God or of the king. But a period of a fortnight, a month or three fortnights at the most should be allowed to the surety to find out the absconding person⁷⁰. If he can produce him within that time the surety would be free from liability (Kāt 531, 532, Br. in S. B E vol 33 p. 327 verse 42). If the surety for appearance cannot (even after time is given) produce the debtor or the debtor dies then the surety has to pay from his own pocket the money due from the debtor (Manu VIII 158 and Kāt. 532–33). All this is subject to the proviso of the act of God or of the king.

Sureties of all kinds are personally liable to make good the loss arising from the non-appearance of the debtor, or from his dishonesty or non-payment (Yāj. II 53, Viṣṇu VI 41, Br. in S. B. E 33 p. 327 v. 41); but the sons of the surety for appearance or honesty were not liable, if the surety died⁷¹. Yet if the surety for appearance or honesty stood surety only after taking some security from the debtor for so doing, then even the son would be liable to reimburse from such security the person losing. The liability of sons and grandsons for the suretyship debt of the father or grandfather will be discussed a little later oṇ If there are several sureties, then each will have to pay a proportionate part of the debt; but if each of the sureties has undertaken the whole liability of the debtor (i e. if the liability of all is joint and several) then the creditor may at his will recover the whole debt from any one of the several suretieṣ (Yāj II 55, Nār. IV. 120) Kāt 538 states⁷² a special rule that whichever out of several sureties that have incurred joint and several liability is found present at the place (of the agreement) should be made to pay the debt, if such a surety has gone abroad his son may be made to pay the whole, but if the surety be dead the son should be made to pay the share of his father (there being several sureties). If a surety being pressed or harassed by a creditor pays openly (before all people) the debt (wholly or in part)⁷³ then the debtor will be made to pay after three fortnights double of what the surety has to pay (Yāj II 56, Nār. IV. 121, Viṣṇu Dh S. VI 44, Kāt 539). But if the surety pays without being pressed he would get only what he paid and if the debtor reimburses the surety without loss of time then he has not to pay double. These rules apply to money lent, but in the case of grain, clothes and liquids the debtor must pay to the surety three, four or eight times respectively (Yāj II 57). Who could not be accepted as sureties has already been stated (on pp. 291-292).

Several were the modes of the recovery of debtṣ Manu (VIII. 47-48) requires the king to make the debtor repay his debt to the creditor in whatever way he can do it. There is a difference in the modes of recovery according as the liability is admitted by the debtor or not. If liability is denied then the only method is to file a suit for the recovery of the debt. But if the liability is admitted by the debtor, then Manu VIII 49 (=Nār IV 122), and Br (S B E vol 33 p 329 v. 54) mention five means of recovery viz. dharma (persuasion), vyavahāra (legal proceed-ing), chala or upādhi (trick), carita (sitting down at his door) or bala (compulsion to do work or confinement). It appears from Āp Dh S (I. 6 19 1-) that the method of sitting at the door for recovery of debts was known to Āp (the creditor so doing is designated pratyupavṛṣṭa). In a Marwad Inscription III ] dated samvat 1198 (1141–42 A. D.) this practice is called kāya-vrata (yadī brāhmaṇah kāyāvī alam krtvā mriyate). Vide E. I. vol. XI p. 37 at p 40 These modes of recovery except vyavahāra are explained by Bṛhaspati as follows :⁷⁴ The method of dharma consists in sending messages ( to the debtor ) from his friends and relatives, in persuading him to pay with sweet words, by following persistent dunning) and by frequent requestṣ Trick consists in the creditor borrowing from the debtor some ornament or other article under the pretext of its being required in a festival and not returning it or in retaining what the debtor has handed over to the creditor for being delivered to another, that is compulsion when the debtor is brought to the creditor’s house, is then confined or beaten and thus induced to repay the debt; that is ācānta where the creditor keeps tied his own wife or son or cattle at the debtor’s house or sits down at his door (fasting) All these methods could not be employed in the case of all debtors Kat. (477–480) has already been cited (on p. 383) to show how the king is to employ the various methods in the case of brāhmaṇas, traders &c. If the creditor employs any one of the methods ( other than vyavahāra ) and harasses a debtor when the latter claims judicial investigation and there is a doubt or dispute between the two as to the amount, the rate of interest, the liability to pay, the creditor would lose his claim and would have to pay a fine equal ( to the claim )⁷⁵ Kat 589 and Br ⁷⁶ ( S. B. E vol 33, p. 331 verses 63–65) lay this down But when the debtor admits his liability and yet does not pay and when the creditor therefore employs one of the means (other than a suit) appropriate to the caste and position of the debtor, then, if the debtor complains to the king against the creditor, the debtor would be compelled by the king to pay the debt and a fine for unnecessary complaint (Yāj II 40, Manu VIII 176, Viṣṇu Dh S VI 19) Kat (580-584) provides that where⁷⁷ it is the custom of the country, the creditor may hold the debtor in restraint openly before an assembly of people until he pays what is due, that when a man so restrained has an inclination to answer calls of nature, he should be followed behind by the creditor or he should be allowed to go alone but fettered, that he should be allowed to go home for his meals and at night if he furnishes a surety, and that the surety will have to remain in restraint ( while the debtor is absent ), that if the debtor cannot secure a surety or does not accept the proposal of furnishing one he should be confined in jail or should be kept guarded by men, but that a respectable man who is trust-worthy and pure in conduct should not be put in jail, that he should be allowed to go without fetters or after being bound by an oath. Manu VIII 177, Yāj II 43, Nar. IV 131 lay down that if a debtor is unable to pay a debt then he should be made to do work suitable to his caste in the house of his creditor of the same or higher caste in order to gradually liquidate the debt ( but without detriment to his own family) and a brāhmaṇa debtor should be made to pay by easy instalments⁷⁸. Kaut. III. 11 provides⁷⁹ that agriculturists and king’s servants should not be seized ( for debts) at the time when it is the season for them to work, nor a woman for her husband’s debt unless she has promised to repay her husband's debt, but wives of cowherds and those who take a lease of lands for half produce may be arrested for non-payment by the husbanḍ As compared with the harsh legislation against debtors in most ancient and medieval systems of jurisprudence the rules laid down by the smṛtis are very mild and humane⁸⁰. If there were several creditors there was priority among them i. e. the earlier debt prevailed over the later one; a brāhmaṇa creditor (whatever the date of his advance) was preferred to a kṣatriya or other creditor (Yāj. II. 41, Kāt. 514). Kaut⁸¹ states that the debts owed to the Crown and a śrotriya take precedence over other debts and that unless the debtor is going to abscond several creditors should not simultaneously proceed against one debtor. Section 56 of the Bombay Land Revenue Code makes Government assessment a paramount charge on the lanḍ But acc. to Kāt. (513) if several debts were contracted in writing on the same date, they should all be treated as equal and paid off pro rata from the debtor's assets if insufficient; but, if a creditor established that a particular article belonging to a debtor was manufactured by the debtor with his money only, that creditor alone got the money recovered by sale of the article (Kāt. 515). Bhāradvāja states⁸² that if a debtor has no cash then the creditor should be paid by sale of the debtor's other property in order viz. grain, gold, iron, cattle, clothes, land, slaves, and conveyances, (in the absence of fields) his garden and lastly his house and in the absence of even a house time should be granted to debtors of the three higher casteṣ When a debtor was not able to return the entire debt in a lump, he should write on the back of the document of debt the sums paid by him from time to time or the creditor may pass a receipt (upagata or praveśapatra, as the Mit designates it) to the debtor signed by himself (Yāj II 93, Nār IV. 114, Viṣṇu Dh S VI 26). If the creditor, though requested by the debtor, would not pass a receipt he was to lose the balance of his debt (Nār. IV. 114) Nār. IV 115 and Br (S B E vol 33 p 332 verse 66) further provide that if the creditor does not write down (either on the bond itself or in a separate document) the money recovered by dharma or some other method then the debtor himself will be entitled to interest on the amount paid by him ⁸³. When the whole debt is paid off, the creditor should tear off the bond of debt or he may execute another document in order to show that the debtor is freed from the debt (if the original is lost or is not within easy reach) and when a debt is borrowed in the presence of witnesses, it should be returned in the presence of the same or other witnesses (Yāj II. 94, Viṣṇu Dh S, VI. 24-25) Nār IV 116 requires the creditor to return the document when the whole debt is paid off or to announce openly to others that it has been paid ⁸⁴.

It has now to be seen who (other the man himself) are liable to pay a man's debt. The liability to pay another's debt may arise on three grounds, (1) religious, (2) equitable and moral, (3) legal, such as agency (express or implied) or authority. That the sons and grandsons of the original debtor are liable to pay on religious grounds the debt of the father is expressly stated by numerous writers such as Kaut ⁸⁵ III. 11, Yāj. II 50, Nār. IV. 4, Br. (S. B. E vol 33 p. 328 verse 49), Kat (560), Vṛddha-Hārita VII. 250-51, Viṣṇu Dh. S VI 27. The important question is whether the smṛtis declare the liabi- lity of the great-grandsoṇ It is clear that smṛtis like that of Bṛ. expressly say that the great-grandson is not liable to pay his great-grandfather’s debt. The Viṣṇu Dh. S. VI. 28 says that the descendants beyond the grandson need not pay if they are unwilling to pay Others like Nār IV. 4 and Kāt. say that the obligation to return a debt ceases from the fourth. The question is what is meant by the fourth i. e. is it meant to exclude, in calculating, the original debtor or to include him ? It is possible to hold (particularly because the great-grandson is not expressly mentioned in most smṛtis) that the fourth means ‘inclusive of the original debtor’. But this appears to be in conflict with the rule in Manu IX. 137 (which is the same as Baud Dh. S. II 9. 6, Vaṣ 17. 5, Viṣṇu Dh. S. 15. 46) that the son, grandson, and great-grandson confer the greatest spiritual benefit on the ancestor, the rule (Manu IX. 186, Nār. IV. 6) that piṇḍas (in śrāddha) are to be offered by three persons in descent and the general rule that whoever takes the inheritance must offer the piṇḍa and pay the debts of the ancestor (Gaut. XII 37, Yaj. II. 51, Nār. IV. 23, Viṣṇu Dh. S XV. 40 and VI 29). Therefore, following the canons, viz. the rights to property are co-extensive with the liability to perform śrāddha and to pay off debts (which is quite logical and reasonable), that the texts relating to the same subject matter must be harmonized and reconciled as far as it is reasonably possible ⁸⁶ to do (ekavākyatā-nyāya), that apparently conflicting texts are to be assigned their appropriate spheres (viṣayavyavasthā), and that a direct conflict (and so an option) is to be presumed only if no other recourse is open, the Mitākṣarā and other commentators put forward the interpretation that the texts stating that the great-grandson is not liable to pay the great-grandfather’s debt apply only to cases where the great-grandson inherits no ances- tral property, but that he is liable if he takes ancestral property. Dr. Jolly in his note on Nār. IV. 6 (in S. B. E. vol. 33 p 44) remarks: “the doctrine, viz. the liability to pay debts contracted by an ancestor extends to the great-grandson, is opposed to the teaching of such an eminent authority as Vijñāneśvara, who maintains in the Mitākṣarā that the great-grandson⁸⁷ is not liable for debts contracted by his great-grandfather, and conversely that he does not inherit his property'. He makes similar remarks in his Tagore Law Lectures for 1885 (on 'adoption, partition' &c. p. 171). Dr. Jolly is under some misapprehension since the Mit. in two places deals with this matter and expressly states that the great-grandson is liable to pay debts contracted by his great-grandfather if he has taken ancestral estate but not other-wise. The following propositions are deducible from the smṛti texts and authoritative commentaries like the Mit and the Viramitrodaya (Vyavahāraprakāśa). The⁸⁸ first proposition is that the debts of a man must be paid by his three descendants (son, grandson and great-grandson) if they have ancestral estate in their hands (Mit on Yāj. II 51 quoted in note 745, Sṃ C. II p 171, V. P. p. 264). The 2nd proposition is that even when no ancestral estate was taken by the descendants the son was liable to pay his father's debts with interest, the grandson was liable to pay his grandfather's debt but without interest and the great-grandson was not liable to pay even the principal, if he was unwilling to pay. This proposition is enunciated by Viṣṇu Dh S VI. 27–28, Br. (S. B. E. vol. 33 p. 328 III] v. 49 referred to on p. 443) and Kat. 556⁸⁹. In Narasimharav v. Antaji 2 Boṃ H. C R. 61 it was held (probably following Bṛhaspati, though not quoted in the judgment) that the grandson was liable to pay the debt of his grandfather without interest even if there was no ancestral estate. This was felt to be a great hardship on heirs (taking no ancestral estate) and in order to remove it Bombay Act VII of 1866 (the Hindu Heirs' Relief Act) was passed whereby it is provided that a son or grandson is not liable to be sued for the debts of his deceased ancestor merely by reason of his being such a son or grandson and that the son, grandson or other heir shall be liable only to the extent of the assets that come to his handṣ The same is the law laid down in other parts of India by judicial decisionṣ Br. (S. B. E. vol. 33 p. 328 verse 48) recommends that the father's debt must be paid first of all and after that one's own debt; but a debt of the grandfather must always be paid even before the preceding⁹⁰ two kinds of debt. These two propositions of Hindu jurists are very lucidly, but succinctly, set forth by the Viramitrodaya quoted below⁹¹. The third proposition (which is an exception to the above two) is that even a son is not liable to pay certain illegal and immoral debts of his father This proposition will be discussed a little further on A fourth proposition is that even when the father is not dead, the son, grandson or great-grandson may be liable to pay the father's or other ancestor's debt under certain circumstanceṣ Yāj. II. 50 provides that sons (and grandsons) must pay the debt of the father when he is dead or has gone to a distant country or is afflicted with an incurable disease. Nār.⁹² IV. 14, Viṣṇu VI. 27, Kat. 548-550 state that when the father, though living and near, becomes an ascetic (acc. to Viṣṇu), is afflicted with such diseases or calamities as blindness from birth or loss of caste (due to grave sins), lunacy, tuberculosis, leprosy and other (incurable) diseases or when he has left his country or has gone on a long journey or is very old (above 80) the son will have to pay the debt of the father after the twentieth year (from his going abroad). Acc. to V. R. (p 50) if the father's disease was incurable or if it was certain that he would not return from his journey then the son was bound to pay at once and was not entitled to wait for 20 yearṣ Kātyāyana (552-553) introduces ⁹³ a further restriction that even when the father is dead, if the son has not attained years of discretion (i e. if he is a minor) he need not pay the debt of his father during his minority; but when the proper time to pay arrives he must pay the debt, otherwise the (ancestors) may remain in hell. Thus the son's liability during the father's lifetime or absence was not absolute but limited according to the smṛtis and digests; judicial decisions, however, have brushed all this aside and the son's liability to pay his father's debts during the latter's lifetime is now as absolute as after his death. This will be discussed further oṇ

According to all smṛti writers even the son, though he may have taken the ancestral estate, is not liable to pay certain debts of the father which are compendiously described as 'illegal or immoral' in the decisions of courtṣ Gaut. ⁹⁴ XII. 38, Kaut. III. 16, Manu VIII 159-160, Vas 16. 31, Yaj. II 47 and 54, Nār. IV. 10, Br. (S. B. E. vol. 33 p 329 verse 51), Kāt. (564-565), Uśanas and Vyāsa provide that the son is not bound to pay the following debts of his father viz. those incurred as a surety (for honesty or appearance), for drinking or in gambling, those arising from idle promises (to bards, wrestlers and the like), debts for promises made under the influence of wrath or illicit love to women, the balance of a fine or toll and those that are not vyāvahārika. A debt arising from wrath is explai- ned by Kāt as one where the father causes physical injury to another or destroys another's property through anger and then promises something to pacify the person wrongeḍ As regards the suretyship debts of the father, Yaj. II. 54, Vyāsa and Kāt. (561) provide that when the father was a surety for payment, then the son was bound to pay the principal of the debt for which the father stood surety, but the son of the son was not liable at all to pay the suretyship debt of his grandfather even when the latter was a surety for payment⁹⁵. These verses which the son was not bound to pay have been quoted and explained in numerous decisions of the courtṣ But as this work does not profess to be a treatise on modern Hindu Law those cases are passed over here. What is meant by 'debts that are not vyāvahārika' has presented the greatest difficulty to the medieval commentaries and digests and also to modern courts as noted below⁹⁶. Kāt. 534 further notes that where the father became a surety for appearance (or honesty) after receiving a pledge from the person whose surety he became, then the son of the surety may be made to pay the money due from that pledge in case the father is dead or has gone abroad⁹⁷.

The case law on the subject of the father's debts and the son's liability to pay them has assumed enormous proportionṣ This is not the place to discuss the case-law. But as the courts in India profess to follow the Hindu Law of the sages and medieval digests, it is necessary to examine some of the principles laid down by the latest decision of the Privy Council. In Brij Narain v. Mangla Prasad 51 I. A. 129 (=46 All. 95) the following five propositions are laid down by the Privy Council (at p 139): (1) the managing member of a joint undivided estate cannot alienate or burden the estate qua manager except for purposes of necessity; (2) if he is the father and the other members are the sons, he may, by incurring debt, so long as it is not for an immoral purpose, lay the estate open to be taken in execution proceeding upon a decree for payment of that debt; (3) if he purports to burden the estate by mortgage then, unless that mortgage is to discharge an antecedent debt, it would not bind the estate; (4) antecedent debt means antecedent in fact as well as in time, that is to say, that the debt must be truly independent and not part of the transaction impeached; (5) there is no rule that this result is affected by the question whether the father, who contracted the debt or burdened the estate, is alive or deaḍ It is necessary to see how far these principles agree with or deviate from the law of the smṛtis and the digestṣ The first proposition is in consonance with the law of the smṛtis and of the commentaries like the Mit. Yāj. II. 45 provides⁹⁸ that whatever debt is contracted by the head of the joint-family for the necessities of the family has to be paid by the members who take the ancestral estate when the head is dead or goes to a foreign country. The Mit. on Yāj II. 114 quotes and explains a smṛti text; "Even one (the head or manager of a joint family) can make a mortgage, sale or gift of immovable property in a time of distress, for the necessities of the family and particular- ly for religious and charitable purposeṣ" What is meant by ' debts in times of distress ' and ‘kutumbārthe ' is explained by Kāt (542-43) quoted in ṇ 756. This has been the foundation of numerous cases, the first and the most important of which is that of Humoomanpersaud v. Mussumat Babooree⁹⁹ 6 Moore's Indian Appeals p. 393 (P. C.). The 2nd proposition laid down above also follows from several smṛtis (such as Yaj. II. 50 Viṣṇu Dh S. VI. 35, Nār. IV. 2, 4, 6) and the rules about immoral debts cited above. But it is difficult to understand why the Privy Council make a distinction between a simple personal money debt of the father and a debt secured by mortgage (as in propositions 2 and 3). The ancient texts and commentaries make no such distinctioṇ Vide 42 Mad 711 at p. 731, 26 Boṃ 206 at pp. 217-219 (F. B.) and 60 Boṃ 311 (F. B., where this is pointed out. With the greatest respect it must be said that the distinction is not only without dharmaśāstra authority but is also anomalouṣ The distinction between 'antecedent debt' and a debt contracted at the time of executing a mortgage is unknown to the smṛtis or digestṣ The Privy Council had used for the first time in a very early case (viz. Suraj Bunsi v. Sheo Proshad 6 I. A. 88 at p. 106 = 5 Cal. 148, 171) the words 'antecedent debt'¹⁰⁰ for which there is nothing corresponding in the Sanskrit authorities and round which elaborate arguments came to be centred in numerous later cases According to the Privy Council (proposition 5) the son's pious duty to pay his father's debt is as absolute during the father's lifetime as after his death. It has been shown above that the duty was not absolute but qualified and limited during the father's life according to the smṛtis

Yaj. II 52, Kaut. (III. 11) provide¹⁰¹ that husband and wife, father and son and brothers cannot, as long as they are undivided, stand sureties for each other or be debtors and creditors of each other or be witnesses for each other. The Mit. has a long note on Yaj. II. 52. It shows that a wife may be divided as to estate from the husband if the latter desires (as laid down in Yaj. II. 114) and that in that case there may be the relation of debtor and creditor between theṃ The Mit, further explains the sūtras of Āpastamba¹⁰² (Āp. Dh. S. II. 6. 14. 16-19) which lay down ' there can be no division between husband and wife, for since the day of marriage they have to perform religious rites together, they also participate together in the rewards of merit arising from religious rites and also in the wealth acquired; for this reason when the husband has gone abroad if the wife spends on necessary occasions ( out of the family wealth ) it is not declared to be theft '. The Mit. explains that the absence of division between husband and wife is restricted to religious rites performed with śrauta fires or smārta fire and in the rewards of meritorious acts and not in all actions or as to all property. Therefore in other charities where no sacred fire is required ( pūrta acts such as constructing a well or a public park ) they have separate rightṣ Vide S. V. pp. 353 for various explanations of Bhāruchi and others on Āp. Dh. S. and V. P. pp. 255-56.

The father is not bound to pay his son's personal debt; the husband is not liable to pay the wife's debt, nor the wife her husband's or son's But in all these cases if the debt is incurred for the benefit or purposes of the family by the son, the wife or the husband then the father, husband or wife respectively would be liable (Yāj II. 47, Nār. IV. 10-11, Kāt. 545, 579)¹⁰³. If the father promised to pay his son's individual debt or if he appro ved or acquiesced in it he was liable to pay it. Manu VIII. 167, Yāj II. 45, Nār. IV. 12, Br. (S. B. E. 33 p. 329 v. 50), Kāt. (545) provide that a debt incurred for the purposes of the family by any one such as the son, brother, uncle, the wife, the mother, the pupil or a servant or a slave even without the consent of the head of the family when he has gone abroad, should be paid by the head of the family. This liability and the liability when the manager of a family contracts a debt for the benefit or neces sities of the family arise from agency (implied) or authority. Kaut. (III. 11) holds that the husband may be seized (for work) if he starts to go abroad without providing for the return of the debt contracted by his wife¹⁰⁴.

The general rule that the husband was not liable to pay the wife's debt had an exception viz the husband was liable for the debts of the wife in the case of cowherds, vintners, actors, washermen and hunters ( and the like ) whose income depends on their wives and whose household expenses are defrayed by their wives ( Yāj. II. 48, Viṣṇu Dh S VI. 37, Nāṛ IV. 19 ). Similarly the rule that the wife was not liable for the husband's debt had certain exceptions, viz a debt of the husband which she promised to pay because he was dying or going abroad or which was contracted jointly with her husband¹⁰⁵ ( Yāj II 49, Nāṛ IV 16-17 ). The Mit. on Yāj. II. 49 answers the objection raised by some that, as according to Manu VIII. 416 ( =Udyogaparva 33, 64 ) the wife, son and slave are without property and whatever they earn is acquired for him to whom they belong, the wife would not be able to pay anything at all. The reply is that this verse of Manu does not mean that a wife or son can own no property at all, but all that it declares is that they have no independent power to dispose of their property.

The order in which persons are liable to pay a man's debts after his death is declared by Yāj II. 51, Nāṛ IV. 23, Br. ( SBE vol. 33 p. 329 verse 52 ), Kat. ( 562, 577 ), Viṣṇu¹⁰⁶ VL 29-30. Whoever takes the wealth of the deceased (whether a son or a collateral heir) is primarily responsible to pay the debts of the deceased; but if the deceased died without leaving any property, then he who takes' his wife has to pay the deceased's debts; if there be 'no wealth or taker of the deceased's widow, then the son even if he succeeds to no wealth has to pay. This liability may be said to be based on the equitable and moral principle that whoever takes the wealth of the deceased or his widow (over whom the deceased had a sort of dominion) was bound to 'pay his debtṣ There appears to be some conflict between' the texts; but it is more apparent than real. Verses (like Kat 577) where the son is placed after the taker of wealth and before the taker of the widow refer to a son who has separate and independent wealth of his own and is more wealthy than the taker of the widow (though he himself being disqualified did not succeed to ancestral wealth). When there is no wealth and there are several sons one of whom is congenitally blind or 'otherwise incompetent to succeed then the other sons are liable. From the fact that the taker of the widow is made liable for the debts of the first husband it should not be supposed that the ancient sages approved of widow-remarriage. On the contrary they condemned it (vide Manu V. 162), but, as the Mit. (on Yāj. II 51) remarks, remarriages took place by custom among certain castes and nothing could prevent persons from taking widows as kept mistresseṣ Therefore as the wife was half of the husband (acc. to Vedic and other passages q. in H. of Dh. vol. II. pp. 428, 584 ṇ ) she was practically the husband's wealth (Nār. IV. 22 expressly says so)¹⁰⁷ and so the taker of the widow was saddled with the obligation to pay the debts of the deceaseḍ This sentiment continued to modern times and in the Bombay Presidency the Legislature had to declare (by Bombay Act VII of 1866, sec 4) that 'no person who has married a widow shall merely by reason of such marriage, be liable for any of the debts of any prior husband of such widow'. The Vaijayanti on Viṣṇu Dh. S. VI 30 quotes Yāj. II. 51 and Nār. IV. 23 and explains them differently. According to it the word ‘putra’ (in Yāj. II. 51) is qualified by all the three adjectives viz. ‘rikthagrāha’, ‘yoṣidgrāha’ (one who is married) and ‘ananyā- śrīradravya’ (one who has no wife nor child and one who has taken no ancestral wealth, either because he does not desire it or because none exists). Therefore according to it among sons, the son that takes ancestral wealth has to pay the debts of the father, on failure of such a son when some of the sons are married and some are not, the married ones have to repay ancestral debts and lastly when there are no married sons the one that is wifeless, childless and also without wealth has to pay theṃ

Nikṣepa (deposit). The words nikṣepa, upanidhi and nyāsa are sometimes said to be synonyms (as done by Amara)¹⁰⁸, though several ancient works define them separately. According to Yāj. II. 65 upanidhi is the deposit of an article enclosed in a box or the like made with another without telling him of the contents of the box. Yāj. II. 67 holds nyāsa and nikṣepa to be different from upanidhi. Nārada¹⁰⁹ as quoted in the Mit. on Yāj. II. 65 defines upanidhi as the deposit of an article in a sealed receptacle without counting it in the presence of the person to whom it is entrusted and without telling him what the receptacle contains, while a nikṣepa is a deposit entrusted to a man after counting the articles in his presence. Manu VIII 149 (=Vasiṣ. 16. 18), Kaut. III. 12 hold nikṣepa and upa- nidhi to be distinct. A verse quoted by Kṣīrasvāmin on Amara defines nyāsa as an open deposit and nikṣepa as the delivery of some goods to an artist or craftsman for being worked up or manufactureḍ Nār. (V. 1 and 5) defines nikṣepa as ‘the deposit of one’s articles with another through confidence, while upanidhi is defined in the same way as Yāj. II. 65. Viśvarūpa¹¹⁰ defines nyāsa as an open deposit for safe custody and nikṣepa as delivery of one’s article to another for handing over to a thirḍ Kat. (592) makes ¹¹¹ upanidhi a generic term for all bailments such as a sold article remaining in the hands of the vendor; a deposit, a pledge, bailment to one for delivery to another; loan of article for temporary use, goods handed over for sale to an agent. The Mit. on Yaj. II 67 defines nyāsa as handing over to some member in the house an article in the absence of the head of the house for delivery to the head of the house and nikṣepa as a deposit in the presence of the depositee himself. The V. P. p 280 briefly distinguishes the three as noted below.¹¹²

Nikṣepa or upanidhi was a bailment made in trust and differed from an ādhi in this that the former was not given by way of security for a debt or for collecting interest but in confidence for safe custody.¹¹³ Br. (SBE vol. 33 p. 332 verse 2) says that such a deposit is made with another when one is leaving one's home, or through fear of the king or for depriving one's kinsmeṇ¹¹⁴ Manu VIII 179 (=Nār. V. 2) says that one should entrust a deposit to a person who is born of a good family, is well-conducted, knows dharma, speaks the truth, has a large family, is wealthy and straightforwarḍ The person with whom a deposit is made generally receives no personal benefit from it; hence the smṛtis (such as Br. in SBE 33 p. 333 verses 6-8) extol the holder ¹¹⁵ of a deposit made in trust to be as meritorious as one who makes gifts of gold or other inferior metals or clothes and condemn the misappropriation of a deposit or the losing of it through negligence as very sinful. The idea is that no one is bound to accept a deposit, but when a person accepts it, his primary duty is to preserve it with care and the next duty is to return it at the time agreed or on demanḍ The obligation arises from the trust reposed in a persoṇ The rights of the bailee are limited as compared to those of the mortgagee or pledgee, but the very fact of his custody in trust clothes him with certain rightṣ The amount of care required of the depositee is the same as in the case of an ādhi, viz. he is to take the same care of it as he takes of his own goods and is not liable if the deposit is lost (along with his own property) through act of God or the king or is stolen by thieves (Manu VIII. 189, Yaj. II. 66, Nār. V. 9 and 12, Br. in S.B.E 33 p. 333, verse 10, Kāt. 593).¹¹⁶ In the Mṛcchakaṭika Cārudatta accepts liability for the loss of the ornaments deposited with him by Vasantasenā, though they were stolen, because of his high sense of chivalry and of his idea that proper care was not taken by him or his frienḍ But Nār. V. 9 is careful to add that the loss through vis major or through theft must be real and not fraudulently brought about.¹¹⁷ Nār. V. 6 and Br. (in SBE 33 p. 334 verse 14) state that a deposit may be made in the presence of witnesses or without them, that it should be returned in the same way and condition in which it was made and that if there is a dispute, it may be settled by ordeal (when there are no witnesses).¹¹⁸ The article deposited must be returned in the same condition (as regards seal &c.) in which it was handed over (Yaj. II. 65). It must also be returned to the man himself who made the deposit and not to his co-owners (Manu VIII 185, Br. in SBE 33 p. 333 verse 9).¹¹⁹ He is estopped from recognising the title of any one except the depositor, as in section 116 of the Indian Evidence Act. But if the bailor be dead the bailee can return it of his own accord without demand to the co-owners (Manu VIII. 186 = Nāṛ. V. 10). In doing so however he must not return it to one of several heirs, but to all or in the presence of all. The loss of a deposit may be due to the fact that the bailee consumes it by using it, or to the bailee's negligence or to his ignorance. In these cases the bailee was made to reimburse the bailor for the losṣ But Kāṭ. (597)¹²⁰ makes a difference, viz. when a bailee consumes the deposit by use he should be made to pay the price with interest, when he loses it through negligence he is to pay only the price (but without interest) and if he loses through ignorance, then he is to pay a little less (i. e. less by one-fourth) than the price. Vide Br. (S B E vol. 33 p. 333 verse 11) and Nāṛ. V. 8. If a bailor knowing the proposed bailee to be a careless man deposits his goods with him, the bailee is not liable even if the goods are lost from any cause whatever (Kāṭ. 599).¹²¹ If immediately on demand by the depositor the bailee does not return the thing deposited or it is lost after demand from any cause whatever (including act of God or king), the bailee has to return the thing or the price of the thing (when lost) and also is liable to be fined by the king in the same amount (Yāj. II. 66, Nāṛ. V. 7). If the bailee makes use of the article bailed without the permission of the bailor, he should be fined by the king and should be made to return the thing bailed with interest (Yāj. II. 67, Nāṛ V. 8). In the Rāj.T. (VIII 124–157) occurs the story of a person who had deposited one lakh of dināras with a merchant and had withdrawn some money from time to time. It further states that, when the balance was demanded, the merchant furnished a statement of accounts giving a list of fictitious items of withdrawals for many years with interest and showing that very little of the deposit was lost. The king brought home the fraud to the merchant and ordered that the original deposit being used by the merchant should bear interest.

Kat. (506) provides that when a deposit, a balance of interest, purchase price (not paid though the article be delivered to vendee ), or sale price ( articulo sold being retained by vendor though price is paid) is not returned or paid when demand is made, it carries interest at 5 per cent (from the date of demand ).¹²² Manu VIII. 191 (which is almost the same as Nār. V. 13) provides that where a bailee does not return the deposit though demand-ed or where a person without making a deposit claims it from a person, both are to be punished as a thief by the king and to be made to pay a fine equal in amount to the price of the bailed article (claimed). The deposit has to be taken back at the proper time by the depositor and the bailee has to avoid returning it at an improper time; if the latter returns at an improper time he should be made to pay a fine double of the value of the thing¹²³ ( Kat. 601 ).

Yāj. II. 67, Nār. V. 14, Br.¹²⁴ (S. B. E. vol. 33 p. 334 verse 15) extend these rules about nikṣepa to other kinds of bail-ments viz. to yācitaka (an article such as an ornament borrowed from a man on a festive occasion), anvāhita (what is handed over to a third man and is the property of another and has been pledged with a man), nyāsa, upanidhi, śilpinyāsa (giving an article such as gold to an artisan like a goldsmith for preparing an ear-ring or the like), pratinyāsa (mutual deposit). Some of the rules about yācitaka are stated above (pp. 426-427). Kaut.¹²⁵ III. 12 states that a yācitaka or avakṛta (lent on hire) article should be returned in the same condition in which it was receiveḍ If lost through act of God or king or through theft (after taking proper care) the depositee would not be liable. Kāt. (610) provides¹²⁶ that he who having taken the loan of an article for use does not deliver it even on demand should be restrained (by the owner) and forcibly made to return it and fined by the king if he does not return it; he should be made to pay the price with interest (if the thing be lost after demand). If the loan of an article was taken for a specified period or for a particular occasion or purpose and a demand for return be made in the middle and the article is not returned when demanded, the person taking the loan would not be made to pay the price: but if a person who has taken on loan an article does not return it after the period fixed has expired or the purpose is served, the borrower must offer to the owner the price if the article be destroyed or lost and if he does not return even after demand (when the period has ended) the borrower would have to pay the price with interest.

Kāt. (609) states a reasonable counter-exception to the rule in 606 viz. 'when the owner of an article borrowed by another is likely to sustain loss if the article borrowed were not returned on demand, then the borrower should be made to deliver it even though the time fixed has not ended or the purpose of the loan was only half fulfilled'.

There are some special rules about śilpanyāsa also. Kāt. (603-604) provides that if an artisan or craftsman retains an article delivered to him beyond the time that was settled (or agreed ) for finishing the work he should be made to pay ( its price ) even if the article was lost through act of God, but the artisan shall not be liable to pay the price if the article were to be lost through defects in the article itself; if ( however ) what is delivered for being worked or polished is destroyed through the fault of the artisan he should be made to pay the price¹²⁷.

From the fact that Kat. 596 ( quoted above in ṇ 778 ) employs the expression `dāpyaḥ sa eva tat` ( he alone who misappropriates or causes loss of a deposit by negligence ), the words of Gaut. XII 39 ( quoted above under ādhi ) and the fact that nikṣepa is a title distinct from rṇādāna ( under which alone the liability of sons, grandsons, and great-grandsons is expressly declared ) it follows that sons are not liable for the misappropriation or loss of a deposit or article bailed to their father or other ancestor provided they have not themselves joined or helped in the embezzlement or loss This is made clear by Haradatta on Gaut. XII 39, the Vivādacintāmaṇi and the Vivādacandra quoted below¹²⁸.

It is interesting to note that Nār.¹²⁹ V. 15 places on the same level ( as to liability for loss ) with the depositee and the like the man who takes in his charge a minor that has a good deal of wealth, i. e. the person undertaking the position of the guardian of a minor's property has to take as much care of it as of his own and is liable in the same circumstances as a depositee would be for loss of the minor's property. Vide section 27 of the Guardian and Wards Act (VIII of 1890) for the care required of a guardian¹³⁰.