A Peek into the Legal and Judicial Aspects of Guilds and Corporations in Ancient India

This episode offers broad glimpses into the nature of the legal and judicial facets of guilds and corporations in ancient India.
A Peek into the Legal and Judicial Aspects of Guilds and Corporations in Ancient India

Read the Earlier Episodes in this Series

A Peek into the Legal and Judicial Aspects of Guilds and Corporations in Ancient India
Corporate and Business Life in Ancient India: A Brief Journey
A Peek into the Legal and Judicial Aspects of Guilds and Corporations in Ancient India
The Exciting World of Gāna, śrēṇi, pūga and Corporate Bodies in Ancient India
A Peek into the Legal and Judicial Aspects of Guilds and Corporations in Ancient India
The Daring Saga of the Kshatriya-śrēṇis

Legal and Judicial Aspects of Guilds and Corporations

AS OUR GUILDS AND CORPORATIONS extended the ambit of their operations and swelled in influence, the society and legal system too, kept pace with them. The Dharmasastra literature over time, evolved to meet these changing circumstances. It contains copious rules relating to guilds, corporations, caravans and trading communities.

The prime feature of this politico-legal facet was the right of corporations to have their own rules, regulations and laws, which the Government not only recognized but the King was bound to consult them before taking any decision that impacted corporate bodies. In fact, as early as the fifth century BCE, this system had already been formalized. Here’s a verse from the Gautama Dharma-Sutra:

Cultivators, traders, herdsmen, money-lenders and artisans are authorized to lay down rules for their respective classes, and the king shall give the legal decision after having learned the (state of) affairs from those who have authority to speak on behalf of each class or guild.

Internally, guilds and corporations functioned strictly along democratic principles. The Buddhist period for example, furnishes us with extensive evidence for this fact.

A General Assembly—akin to modern-day board meetings—was vested with supreme authority to decide on all matters. The actual procedure for conducting these meetings was described down to the last detail. All members of the guild had a right to vote unless they were incapacitated in some way. No meeting was legal unless all the members entitled to vote were present. If a member was absent for some reason, he could formally declare his consent to vote, familiar in contemporary terminology as absentee voting. The formal consent of absentee members was known as Chhanda. The Mahavagga for example, contains elaborate rules formulated to constitute a quorum.

While the king did grant extraordinary autonomy to guilds and corporations, it was not a blanket licence. He was the supreme judge invested with juridical and punitive powers in both cases: (1) where disputes could not be internally settled by corporate bodies (2) disputes between different corporate bodies. The unfairly reviled Manusmriti has a stately description about how the king should conduct such judicial proceedings:

He was to enter the court preserving a dignified demeanour, together with the Brahmanas learned in the Vedas, and with experienced councilors. He was to examine the cases either seated or standing but without ostentation in his dress and ornaments. The decision had to be pronounced in a timely fashion… The laws of various Jatis, of districts, of guilds, and of families had to be studied by the king, who was to adjudicate based on the peculiar law of every one of them.

Apart from the King, there were Executive Courts specifically meant for trying cases related to corporate bodies. These were helmed by three Commissioners (Pradēṣṭārāh) or three ministers (Amātyāh). Here is a brief list of the corporate or quasi-corporate entities they dealt with: guilds (Śrēṇi), artisans (Kārukāh), weavers (tantuvāyāha), washermen (rajakāh), goldsmiths (Suvarṇakārāh), sweepers and scavengers (jjhārakapānśudhāvākaḥ), physicians (bhiṣajah), traders (vanik), musicians (kuśīlavā), dancers (cārāṇāvāha), mendicants (bhikṣukaḥ), and cheats (kuhakāha). These courts in turn were divided into two: Dharmastha and kaṇṭakaśōdhana. The former dealt with cases of contract and tort while the latter tried cases involving oppression of the people inflicted by corporate bodies. The ubiquitous corporate villain and capitalist monster is a staple fare in contemporary Tamil and Telugu cinema. Perhaps these creativity-deprived storytellers might find some good material if they care to study the legal and judicial aspects of corporate and business life in ancient and medieval India.

Tradition, custom and usage of each guild or business community played the most decisive role in two major areas:

1. While adjudicating disputes.

2. When the Government allowed the starting or expansion of a new business or commercial project, while levying specific classes of taxes, etc.

The primacy of guild-specific traditions, usages and customs throughout the commercial history of India has to be mandatorily grasped in order to derive a well-rounded and accurate understanding of the subject.

We have an incredible proviso in the Sukraniti related to guilds of thieves, among others.This is how it reads:

The cultivators, the artisans, the artists, the usurers, corporations, the dancers, the ascetics and thieves should decide their disputes according to the usage of their guild, etc. It is impossible to detect them through others’ help. So, they are to be found out with the help of persons born in those guilds.

See how this injunction neatly ties in with Manusmriti’s dictum that the king should be well-versed in the traditions, laws, usages and customs of each guild? The aforementioned guilds of thieves also indicate the same civilizational and social continuity: for example, the much-maligned Kallar tribe had existed in an unbroken manner till the end of the 19th century.

The remarkable endurance of this system can also be seen in the reign of the Hoysala monarch Vira Somesvara (1235 – 1263 CE). His senior minister Rama Deva Nayaka issued a charter to the Acharyas of several merchant guilds of Gommatapura (Shravanabelagola). An Acharya was the titular name given to the head of a guild. This is the text of this rather extraordinary charter:

In case the imposts classed as nyaya, anyaya and mala-braya of the palace come to be levied, the acharya…shall himself pay and settle the matter: it is no concern of the residents. Those who violate the terms of this charter are the destroyers of the Dharma-sthala [i.e., Shravanabelagola renowned as a sacred pilgrimage site]. If among the merchants of this holy place one or two, posing as leaders, teach the acharya deceit, and, causing confusion by taking one thing for another, encourage him to covet a hāga [a quarter of something including a monetary unit] and a bēḷe [half of something including a monetary unit] and still ask for more, they are traitors to the creed, traitors to the king, enemies of the [guild]… If knowing this, merchants are indifferent, they alone are destroyers of this charity and not the acharya. If without the consent of the merchants, one or two leaders enter into the acharya’s house or the palace, they are traitors to the creed. WITH REGARD TO PRIVILEGES, FORMER USAGE SHALL BE FOLLOWED.

We suppose the whole thing is self-explanatory but the concluding sentence reveals the same thing once again: the nearly paranoid care of preserving tradition. It is also rather delightful: “former usage” can range anywhere dating back to a few generations all the way up to the Vedic era. Every such charter, document, inscription and epigraph found in any Hindu historical period throughout Bharatavarsha concludes with a similar injunction. Tradition is the only, the most effective vehicle for preserving continuity, stability and order.

The literate but irredeemably ignorant “reformers” who tried to “create” a “new India” in 1947 tried to do so not only by bypassing but axing the very roots of tradition.

IN PASSING, IT IS PERTINENT to mention another important feature of Corporate India in ancient times. One of the mantras in the contemporary world, especially over the last two decades is something called ease of doing business. As we are all aware, there are elaborate systems for ranking a country based on this parameter. However, our policymakers would be greatly rewarded if they study these aspects of the business and corporate life in ancient India. Much invaluable lessons and learnings are lying in wait. In fact, the story of the gradual and organic evolution of our guilds into massive, transnational corporations is not only rewarding in the worldly sense but is a delightful study of a magnificent, kaleidoscopic universe in itself.

Unfortunately, constraints of space and unavailability of more comprehensive research forbid me from mentioning even the contours of this feature.

To be continued

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