Incorporating a Guild or Corporation in Ancient India - Sandeep Balakrishna

Features and Functions of Corporations in Ancient India

NEXT, WE CAN EXAMINE just the barest contours of the main features and functions of guilds and corporations in ancient India.

• Guilds and corporations could own land and property in the corporate’s name.

• They could formulate rules and regulations and draw up charters like memorandum and articles of association in modern parlance. Any member who violated it invited penal action.

• Corporate representatives transacted business with the court of law where they commanded respect.

• The office named Kārya-cintaka resembled today’s board of directors. It consisted of people who were, above all, “pure and virtuous” over and beyond their professional qualifications and competence. The Yajnavalkya Samhita has a beautiful line describing such men: Kartavyam vacanaṁ tēṣāṁ samūhahitavādinām. The compound word, samūhahitavādinām is truly poignant. What it really means is that the corporate heads had to be advocates not only of their own guild but also advocates of public welfare in the most expansive sense of the word. The Sanskrit word hita has a range of meanings which can’t be easily translated into English. Does this remind us of what is today known as corporate social responsibility?

• Although each guild or corporation had a chief or Śrēṣṭhi, real power was vested in the board of directors or executive council.

• A mandatory clause included in the charter of each guild or corporation was a list of measures to prevent corruption. At the outset, it was compulsory for any member engaged in the business of the guild who received anything of monetary value—clothes, money, gifts, etc. – to deposit it in the guild’s treasury. If he did not, he had to pay eleven times that amount as fine.

• Any member who violated his agreement with the guild or corporation immediately invited various punishments including but not limited to penalties and expulsion. An expelled member would no longer be able to conduct business with anyone, almost for life.

• No member could enter into contracts with third parties using a clause that did not exist in his guild’s charter.

• Rules and regulations of a corporation had to be consistent with the sacred texts and the laws laid down by the King.

And now, we can briefly examine a rather interesting element. This is the ubiquitous commercial term Nigama, which even today means what it originally meant in ancient India: Corporation.

Interestingly, Nigama also means the following: Veda, city, marketplace, street, merchant, caravan, oath, an act of logical reasoning or deduction, a kind of tax… In fact, a study of the morphology of just this term undams a vast river of India’s commercial and cultural history.

We’ll look at just one example here. A number of clay seals discovered in the ancient Buddhist city of Vaishali between 1902-15 mentions the following terms:

1. Shreshti-Sarthavaha-Kulika-Nigama

2. Shreshti-Kulika-Nigama

3. Shreshti-Nigama

4. Kulika-Nigama

Illustrious scholars like Sri D.R. Bhandarkar, R.C. Majumdar etc., have deciphered it with great effort. Purely going by what these seals contain, they deduce that Nigamas were cities administered either jointly or severally by Shreshtis, Kulikas and Sarthavahas.

Kulikas were generally artisans such as sculptors, heads of specific guilds, and so on. In early medieval India, a Kulika also meant the member of a Panchayat Board. It might be interesting to learn that an inscription mentions Kulikas as warriors who protected the Kullu valley in Himachal Pradesh.

Sarthavahas ­were the heads of merchant caravans.

Evidence for the unbroken commercial and cultural continuity as well as the societal preeminence of these guilds is also available in a Gwalior inscription dated 877 CE. In that period, the city of Gwalior was administered by a board of Shreshtis and Sarthavahas. The inscription explicitly mentions their names as follows: “the merchant Vayyuka, the trader Ichchhuvaka, and the other members of the board of the Savviyakas were administering the city.”

Much later, in south India, these mercantile corporations played a substantial role as we’ve already seen in the earlier episodes. In other words, the unbroken continuity of these institutions was retained, pan India.

But the golden age of our guilds and corporations was truly the Gupta Era, like in all other realms of Indian history. But that is a story for another day.

Incorporation of a New Guild

And now, we can consider a few highlights regarding the incorporation of a new guild or corporation. To begin with, here’s a beautiful verse from the Brihaspati Sutra:

Koṣēṇa lēkhakriyayā madhyasthairvā parasparaṁ |
viśvāsaṁ prathamaṁ kr̥tvā kuryaḥ kāryāṇi anantaraṁ ||

We can break this verse down for the sake of convenience and to understand its practical aspects.

1. Here, the first step before incorporation was to perform an ordeal named Koṣa. Accordingly, each prospective guild member had to drink three mouthfuls of water in which the Vigraha of his Ishta Devata or Kula Devata was washed. If he met with disease or calamity within a fortnight, he was considered untrustworthy and therefore denied admission into the guild. In Hindu jurisprudence, this is known as Kosha-Divya, part of the famous nine or ten Divyas or ordeals meant to prove the guilt or innocence of an accused. In this case, the term “guilt” is synonymous with “unfitness for membership.”

2. After passing this test of trustworthiness, a convention or agreement was drawn up detailing the rules and regulations binding on all members.

3. This agreement was then attested by the Madhyastha, or guarantor. He was a man of high standing vouching for the pure and faithful conduct of the guild itself.

4. The completion of this threefold step was what inspired both mutual trust among guild members as well as in the public eye. Indeed, the phrase viśvāsaṁ prathamaṁ kr̥tvā, is actually quite profound and is a representative reflection of the defining trait of the people, society and culture of ancient India.

The procedure was rather elaborate covering minute details in both writing and practical action and a tad time-consuming. But once the guild was duly incorporated, it set to work. An elaborate memorandum and/or articles of association was drawn up which included the various items of the guild’s business. Various annexures listed out non-business activities that the guild would carry out: these chiefly included community projects, charitable works, donations to temples, participation in festivals, etc.

A soulful verse in the Brihaspati Sutra says that a corporation should also perform works of public utility such as: (1) building a house of public assembly like a town hall (2) a rest house providing free accommodation and meals for travelers and pilgrims (3) pools for supplying water to animals such as cows, bulls, buffaloes, horses and elephants (3) constructing temples and gardens (4) funding the poor people (Daridrāṇām) for performing sacred Samskaras such as Chaula, Namakarana, Upanayana, Antyeshti, or various Yajnas.

To reiterate, all these were formally written down in the corporation’s charter and was legally binding. The profounder element in all this is the fact that guild members were liable for judicial punishment if they transgressed or failed to perform these Dharmic duties!

And so, wherever any guild was located in Bharatavarsha and wherever a guild travelled to, it invariably carried out one or more or all of the aforementioned acts of Dharma. We literally have hundreds of inscriptions spread over at least two millennia to prove this but I will cite just three here:

1. A third century CE inscription at Nasik tells us that in the regime of King Isvarasena, (i) the guilds of potters and makers of water-clocks were given an endowment of 1000 Karshapanas (ii) the guild of oil-millers was endowed with 500 Karshapanas. From the interest on this money, both guilds had to provide medicines for the Sangha of monks dwelling in the caves atop the mount of Trirasmi.

2. Several inscriptions found at the Junnar caves dating back to the Indo-Greek period mention the following endowments: (i) donation of the the income of two fields with the Konachika guild for planting Karanja trees and banyan trees (ii) endowment of money with the guild of bamboo workers and the guild of braziers for pious activities (iii) the gift of a cave and a cistern to monks by the guild of corn-dealers.

3. The aforementioned Gwalior inscription dated 877 CE records the endowment given by the guild of oil-millers and the guild of gardeners to the Vishnu and Nava Durga Temples. This is how it reads: “ a perpetual endowment to provide oil for the lamps, the chiefs of the guilds of oil-millers should give one palika of oil per oil-mill on the ninth day of the Shukla-Paksha of every month. The chiefs of the guilds of gardeners should daily give for the requirements of worship, fifty garlands of the flowers available in the given season.”

The Government machinery which accorded a special status to guilds and corporations also responded in kind by enabling them to perform these Dharmic activities in a flawless manner. The department in charge of guilds and corporations comprised the following officials:

1. A President or chief

2. Two – Five executive officers

Here’s a sample of their qualifications as decreed by Brihaspati: deep learning in the Vedas and Dharmasastras, professional competence, impeccable honesty, firm control over the Self, non-temptable, and skilled in the secret of every business operating in the kingdom.

Courtesy: https://www.dharmadispatch.in/history/incorporating-a-guild-or-corporation-in-ancient-india-their-profoundly-dharmic-charter