Kathmandu: December 1, 1979

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''From the year 1891 Vikrama, payments due on the Khuwa and Khet lands of the Kampu, as well as the Jhara and Megjin levies shall be collected by Kaji Narsing Thapa, and the proceeds deposited at the headquarters office (defdarkhana) of the Kampu. He shall so hear complaints filed by (the inhabitants) of areas assigned to the Kampu and despense justice. Make the payments stipulated on contractual basis for Khuwa and khet lands, as well as the Jhara and Magjin levies, through Kaji Narsing Thapa as installments fall due, and obtain receipts thereagainst. If you default in payments due to the Kampu, fines will be imposed. If you have any complaints and grievances, represent them to Kaji Narsing Thapa, who will redress them in an equitable manner.
Falgun Sudi 7, 1890.

Regmi Research Collection, vol. 26, p. 497.
5. Functions of Adalat in Doti
Royal order to the Mukhtiyar and Bhardars stationed in Doti issued through Chautariaya Pushkar Shah and Kaji Bhaktabir Kunwar: ''Take stepts to ensure that traditional customs and usages are followed throughout the territory of Doti. If any base custom is followed there, have it replaced by a good custom consistent with practices followed in our kingdom and sanctioned by the scriptures (dharma-sastra). Propagate good customs and usages there according to decisions taken on the basis of the scriptures in cases which may be filed there.
'' If, while any case is dispensed of by the Adalat, the decision is in contravention of practices sanctioned by niti (i.e. the customs and usages of the community) or samriti (i.e. those sanctioned by the scriputure), and any litigant is therefore not satisfied with such decision, and submits a petition accordingly, refer the petition to the Mukhtiyar and the Bhardars, and have it discussed at a meeting of the Bhandari council. Arrive at a decision which is consistent with the practices followed in our kingdom and sanctioned by the scriptures, and thus satifly the petitioner.
''We have deputed Kashinatha Upreti to take steps to ensure that the provisions of the Sastras are applied strictly in that region and that nothing is done contrary to religions tradition (Dharma). We hereby command you to act in consultation with him.
''We have sanctioned a yearly of Rs 200 to Kashinatha Upreti in consideration of these services. Disburse the amount from the allocation made for office (masaland) and religious (mamuli) expenses. The expenditure shall be debited against receipts during audit.''
Chaitra Sudi 4, 1890.

Regmi Research Collection, vol. 26, p. 508.
6. Judicial Administration in Jumla

On Kartik Sudi 3, 1903 (November 1846), Fatte Singh Thapa was appointed Sardar in Jumla, with the Chandan Nath Company under his command. The same day, a royal order was issued authorizing him to appoint one bichari, one tahabildar, and one bahidar to dispose of complaints filed at the headquarters office (dafdarkhana) of the Chandan Nath Company at Chhinasim in Jumla. He was also authorized to use the income collected from this function, as well as from the disposal of cases relating to Panchakhat crimes in different areas of Jumla district, to pay salaries as follows to the employees mentioned above:-

1 Bichari - Rs 175 yearly.

1 Tahabildar - Rs 75 do.

1 Bahidar - Rs 75 do.

Total - Rs 325 yearly.

Sardar Fatte Singh Thapa was ordered to transmit the balance of the income to Kumarichok office in Kathmandu.

Kartik Sudi 3, 1903.

Regmi Research Collection, vol. 26, pp. 118-19.
Preliminary Notes on the System of Commercial

Law in Ninetheenth-Century Nepal
Mahesh C. Regmi
The Gorkhalis conquest of the three principalities of Kathmandu valley, which led to the establishment of the new Kingdom of Nepal, meant the subjugation of essestially trading states by a military-agrarian political sytem. The primary concerns of the new government in the economic field were the extension of state control over the land and collections and orders was created to give effect to the government's powers and prerogatives in these two fields. In contradistinction, tille attention was paid to the rights of the individual in respect to property or contract. In the words of John Hicks:1

The legal institutions of the non-mercantile economy, which are on the whole the institutions that a conquerer might be expected to bring with him, are by no means suitable to the make use of uch unsuitable institutions, his development will be hampered… Even though the King had been willing to make use of the merchants, he would not have understood their wants (nor would his judges and administrators have done so). They would have been driven back… to make their own arrangements. They would, therefore, have been deprived of the advantage of making use of a regular legal system, being shup up within the confines of such arrangements as they could make for themselves.

These observations are an accurate description of what seem to have happened in Nepal during the period after political unification. The political, lega and administrative sytem that evolved in subsequent years failed to pay any attention to propect the rights of property and contract. The merchant who wished to enforce a contract or recover a debt had no institutional legal means at his disposal.
Hamilton's observations, made in 1809-10, show how the absence of appropriate commercial legislation caused difficulties to traders. He writes:2
Although the government (of Nepal) itself has, in some cases, had the honor to discharge its debts, and even to assign for the purpose some of its most valuable districts, the collections from which were delievered into the hands of our merchants until they were paid, yet it is totally inconsistent with the nature of their government to attend to complaints for the recovery of money from their subjects. The losses of our merchants by bad debts are therefore heavy.
Consequently, trading communities often had to join together for arbitration by another merchant rather than by judge in disputes concerning contracts.3 This was the reason why ''domestic Panchayats''/in Kathmandu ''especially among merchants, whose wealth attracts the cupidity of the courts, and the community of whom can, on the other hand, always furnish referees or Punchmen''/4 Hodgson has similarly referred to ''some domestice courts, such as the Panchayat or brethren or fellow-craftsmen''.5
Such arrangements, however, presuppose the existence of intra-communal cohesion and harmony of interests to an extent which could seldom be matched by other scattered asnd inarticulate trading communities in different parts of the country. This conclusion would appear to be substantiated by the disabilities whch even the Newar trading community,
/or merchants were paid to have been ''very popular''

so influential and articulate in Kathmandu, suffered elsewhere. Two instances may sufficej: Unitl the early 1830s, the Newar trading communities in Palpa and Pyuthan were denied property rights in commercial sites.6 Consequently, they were unable to build permanent structures for their trading establishments. In the Ankhu-Gandaki area of the western hill region, the Newar community, which depended mostly on trade for its livelihood, was denied inheritance rights. That is to say, sons were not entitled to inherit their deceased father's property, nor was a father entitled to appropriate his deceased sons's property. In both cases, the property accrued to the state.7

It would be incorrect, nevertheless, to arrive at the conclusion that the trading community suffered from anarchic conditions. The evidence of contemporary British officials suggests that such was far from being the case. For example, Kirkpatrict recorded in 1793.8
Notwithstanding the narrow spirit which directs the commercial concerns of this people, the government affords, on the whole, considerable protection to foreign merchants, rendering them in all cases, it would appear, as strict and as prompt justice as the imperfect nature of its general policy will admit.
Nearly four decades later, in 1831, Brian H. Hodgson similarly observed.9
The foundations of commercial law were laid in Nepal with the enactment of the first legal code of the Kingdom in early 1854. The code contained a number of provisions relating to property, inheritance and contract, and insolvency.
In case any one has borrowed money from the government, or from any indivicual, with a without a bond, he shall repay the loan from his wealth, if has any, or else (through the sale of) his houses, lands, cattle, and other property. If he has no such property, he shall sign a bond stipulating repayment of the loan in installments.10


Any amount outstanding in the course of business transactions, for which no bond has been signed shall be settled on the basis of the accounts maintained by the two parties.11
Any dispute between two merchants in the course of business transactions shall be settled on the basis of the documents in the possession of both, if they are still alive. If they are dead, and any person makes claim against their sons, it shall be settled on the basis of the accounts and records maintained by both parties, as well as the evidence of people who had knowledge of their business transactions. If no evidence or witnesses are available, the claim shall be dismissed.12
The legal code of 1854 thus marks the transition from a legal system dominated by considerations of a lord and peasant economy to one which took into account the intricacies of commercial relationships. A single instance may be sufficient to illustrate the nature of the charge. Ever since the time of King Rama Shah (1606-36) the Gorkhali rulers had set 10 percent as the maximum annual interest that a creditor could charge from his debtor on money loans. In cases of default, he was entitled to collect no more than twice the amount of the principal in settlement of his claim.13 Such a regulation was perhaps justified in an agrarian society where the borrower was usually a poor peasant who needed the loan for consumption and the period of repayment was determined by the process of the slow-moving cycle of agricultural production. However, the regulation did not take into account the credit needs of a faster-moving mercantile economy in which both profits and risks operated at a much higher level than in agriculture. The 1854 legal code resolved this conflict of interests between the needs of subsistence agriculture and commerce in an ingenious way through a distinction between interest and profits. Whereas it fixed the maximum rates of interest on all categories of money loans at the traditional figure of 10 percent yearly, it set no limit to the amount of profits that a creditor could claim on commercial loans:14
In case any person engages in trade with capital borrowed from a creditor stipulating in writing the payment of a stipulated share of the profits, he may recover the principal amount and profits as stipulated. But if he has stipulated payment of interest, not of profits, he shall be liable to pay only 10 percent as interest.
It is not possible on the basis of available information to determine how effectively these measures were actually enforced. Nevertheless, there seems little doubt that such legislation at least establishment norms of commercial hehaviors which made possible recources to the courts.


1. John Hicks, A Theory of Economic History, London: Oxford University Press, 1869, p. 68.
2. Francis (Buchanan) Hamilton, An Account of the District of Purnea in 1809-10, Patna: Bihar and Orissa Research Society, 1928, p. 576.
3. Hicks, op. cit. p. 36.
4. Thomas Smith, Narrative of a Five Year's Residence At Nepaul (1841-45), London, Colburn, 1852, p. 139.
5. Brian H. Hodgson, ''On the Law And Legal Practice of Nepal, as regards Familiar Intercourse between a Hindu and an Out-Cast,'' Journal of the Royal Asiatic Society of Great Britain and Ireland, vol. 1, 1834, p. 48.
6. Mahech C. Regmi, A Study in Nepali Economic History, 1768-1846, New Delhi: Manjusri Publishing House, 1971, p. 171.
7. ''Order Regarding Inheritance Rights of Newars in the Ankhu-Gandaki Region,'' Regmi Research Collection, vol. 26, p. 635. For an account of the Newar community of this region, see Garard Toffin, ''The Poeples of the Upper Ankhu Khola Valley,'' Contributions to Nepalese Studies, vol. 3, no. 1, January 1976, pp. 34-36.
8. W. Kirkpatrict, An Account of the Kingdom of Nepaul, (reprint of 1811 ed.), New Delhi: Manjusri Publishing House, 1969, p. 204.
9. Brian H. Hodgson, ''On the Commerce of Nepal,'' In Essays on the Langauges, Literature and Religion of Tibet, reprint of 1874 ed). Varanasi' Bharat-Bharati, 1971, p. 98.
10. ''Sahu Riniko'' (on creditors and borrowers), sec. 6, in Ministry of Law and Justice, Shri 5 Surendra Bikram Shahdevaka Shasanakalama Baneko Muluki Ain (Legal Code enacted during the reign of King Surendra Bikram Shah Dev), Kathmandu the Ministry, 2022 (1965). P. 90.
11. Ibid, sec. 15, p. 92.
12. ''Sahu Asamiko'' (On creditors and debtors), sec. 11, ibid, pp. 98-99.
13. Regmi, op. cit. p. 22.
14. ''Sahu Tirnako'' (On repayment of loans), sec. 5, in Shri 5 Surendra …. Mulukin Ain, pp. 93-94.


Bara, Parsa, Rautahat, Sarlahi and Mahottari Districts

in 1948-49
(Excerpts from a survey report prepared by the Department of Industrial and Commercial Intelligence of te Government of Nepal during 1948-49 A.D.).
The Tarai districts of Bara, Parsa, Rautahat, Sarlahi and Mahottari are situated between latitudes 26'35'' and 27'25'' N and longitudes 84'37'' and 85'10'' E. Statistics of area and population are as follows:-
District Area Population

(Sq. miles)

Bara 428 178,624

Parsa 434 104,820

Rautahat 378 168,226

Sarlahi 563 129,944

Mahottari 843 330,999

Total … 2,646 912,613

Density of population per square mile is thus 344.9.
Although several rivers flow through these districts, agriculture dependes mostly on rainfall. Masonry dams have been built on the Manusmara and the Kakuti rivers.
The number of hospitals, Ayurvedic clinics and private dispensaries is as follows:-
District Hospitals Ayurvedic Private

clinics dispensaries

Bara 1 x 4

Parsa x x x

Rautahat 1 x x

Sarlahi 1 1 5

Mahottari 1 3 x

The government operates one vernacular school (Pathshala) each in Bara, Parsa, and Rautahat, 2 in Sarlahi, and 3 in Mahottari. There is also one basic school in Mahottari. The number of public schools is as follows:-
District High Schools Secondary Schools

Bara x 1

Parsa 1 1
Rautahat 1 1

Sarlahi x 1

Mahottari 1 4
There are railway lines from Amlekhgunj to Raxaul, from Jayanagar to Janakpur, and from Janakpur to Bijelpura. The Janakpur-Bejelpura line is closed during the monsoon. There are not hard-surface roads.
Birgunj town is developing day by day because it is situated on the main route connecting Kathmandu with India. Other important settlements are Thori in Parsa district, Gaur in Rautahat district, Malangwa in Sarlahi district, and Janakpur in Mahottari district.
Agriculture is the main occupation of the people. Agricultural lands are two categories: dhanahar (irrigated) and bhith (unirrigated). The minimum rates of land tax on in India currency. During 1948-49, a special levy has been imposed in Bara, Parsa and Rautahat districts at the rate of 1½ maunds of paddy on each bigha of land. The levy is payable per maund. In other districts, the levy amounts to Rs 1 and 12 annas per bigha.
Tobacco is cultivated on a large scale in Mahottari district, particularly in the Godar region. The average yield is 10 or 11 maunds on each bigha. Each maund of tobacco fetches a price of Indian Rs 100. Cotton is not generally cultivated, supply seeds to farmers through local revenue offices. However, people are not paying much attention to the cultivation of the crop. Mustard is growing on a large scale in the Chitaun and Thori areas. People from the adjoining hill areas bring ghee and mustard for sale in Thori and take back salt, iron and spices. At present, exports of mustard have been banned. The current market price is Rs 21 in Indian currency per maund. Linseed is cultivated on a large scale in Bara and Parsa, as well as in Rautahat and Sarlahi. Sesame and castor are also grown to some extent.
The cultivation of ganja has become very popular these days. The local price is Indian Rs 10 or Rs 15 per seer, where in Indian the commodity can be sold easily at Indian Rs 40 or Rs 50, although there is a strict ban on its sale in that country. There is a ban also on the sale of opium, but its cultivation is very profitable. The local price ranges between Indian Rs 80 and 160, whereas in India it can be sold easily at between Indian Rs 200 and Rs 250 per seer. Opium is cultivated extensively in Bara and Rautahat districts.

Average prices of agricultural commodities, compiled on the bais of 10 principal markets in the region, were as follows in 1940 and 1948:-

Indian rupees and annas

Commodity Unit 1940 1948

Paddy Maund Rs 2-12 Rs 10-8

Rice do Rs 4-6 Rs 18

Gram do Rs 2-12½ Rs 12-8

Rahar pulse do Rs 4-8 Rs 16-8

Khesari pulse do Rs 3-8 Rs 10-8

Mas pulse do Rs 3-8 Rs 17-8

Maize do Rs 4-8 Rs 14-8

Millet (Kodo) do Rs 3-4 Rs 10-8

Mustard do Rs 5 Rs 21

Linseed do Rs 4-8 Rs 19

Tobacco do Rs 15-8 Rs 99-8

Ganja seer RS 10 Rs 20
Prices of selected goods imported from India were as follows:-
Indian rupees and annas

Description Unit 1940 1948

Sugar Maund Rs 9-8 Rs 15

Matches Gross Rs 2 Rs 6-12

Soap Maund Rs 16 Rs 44-4

Kerosene oil Tin Rs 4 Rs 18-8

Dhoti Pair Rs 2-8 Rs 8-8

Sari Pair Rs 2-8 Rs 9-
Per capita availability of paddy is as follows:-
District Population Cultivated Total Paddy Per

area (bigha) production capita

(maunds) (maunds)

Bara 178,624 122,365 2,447,300 8

Parsa 104,820 65,651 1,313,020 10

Rautahat 168,226 94,174 2,883,480 10

Sarlahi 129,944 139,193 2,783,860 15

Mahottari 330,999 53,115 1,062,300 10

The following factories are being operated in this region:-
1. Birgunj Match Factory: The factory was started on November 14, 1938 with a capital of Indian Rs 175,000 subscribed entirely by 15 Nepali shareholders. There are 72 workers. The factory produces 100 to 200 gross match-boxes in a 9-hour shift everyday. All but four of the workers and employees are Nepalis. Wood is procured locally, while paper and chemicals were imported from India. The manager complains that the machinery has become worn-out.
2. Birgunj Cotton Mill: The mill was started in 1943 with a capital of Rs 700,000. it has 250 workers and employees, of whom 14 are aliens. The mill requires 1,250 bales of cotton and 1,620 tons of coal every year, which are imported from India. About 2 bales of yarn are produced daily in a 10-hour shift. The yarn is consumed inside Nepal.
3. Birgunj Electric Supply Corporation: This concern has just been opened and has not yet started supplying power. It plans to generate 225 K.W. of power through diesel engines.
4. Birgunj Cigatette Factory: Machinery is still being installed in this factory for the production of low-grade cigarettes.
5. Birgunj Ceramics Factory: The factory had been started in 1942 with a capital of Rs 100,000, but is now closed. Efforts had been made to float additional shares worth Rs 75,000, but the response was poor.
6. Kailas Rice and Flour Mills in Birgunj: Capital: Rs 250,00. Capacity: 400 maunds of paddy daily. Employment: 132.
7. Jagadamba Rice and Flour Mills in Birgunj: Capital: Rs 70,000. Capacity: 100 maunds of paddy daily. Employment: 21.
8. Gorakhnath Rice and Oil Mills Ltd in Malangwa, Sarlahi district: Capital: Rs 190,000. Capacity: 500 maunds of paddy daily. Employment: 50.
9. Mahalaxmi Rice, Oil and Flour Mills Ltd in Bishnupur, Sarlahi district: Capital: Rs 300,000.
10. Sitaram Rice and Oil Mills in Kalaiya: Capital: Rs 350,000. Capacity: 300 maunds of paddy daily. Employment: 300.
11. Sitaram Rice and Oil Mills in Mahinathpur, Mahottari district. Capital: Rs 250,000. Capacity: 500 maunds of paddy daily.
12. Janaki Rice and Oil Mills in Janakpur: No particulars are available.
The Nepali currency is not in circulation anywhere in these five districts.

Revenue Settlement in Tinthapaula, 1825, A.D.

The Tinthapaula area of Chharkabhot comprised nine villages, each of whom had a headman known as Tolpa. These headmen collected revenue from the local inhabitants and transmitted the proceeds to the district administrator (amali) through a functionary called Jimmawal.
On Poush Badi 2, 1882 (December 1825), a royal order was issued revising the revenue settlements in these nine villages under the thek-thiti syste. The 56 households comprising the nine villages were made liable to the following payments on a non-remissible basis:-
Sirto … Rs 1,684½

AsmaniRs 111½

Total … Rs 1,796.

From this amount, the Tolpas were allowed a commission of Rs 7½, thereby reducing the tax liability to Rs 1,788½.
In consideration of that payment, the Tolpas were allowed to retain the proceeds of the following taxes and duties:-
(1) Sirto, a tax collected from each household.

(2) Jiya-dastur, literally, a tax collected from each individual.

(3) Duties on the calves of yaks and stud horses.

(4) Saunefagu, a tax collected on each ''roof''.

(5) Banaulo tax on forests.

(6) Chudo. The meaning of this term is not known.

(7) Danda Kunda, or fines and penalties collected in the course of the administration of justice.

(8) Maryo-aputali, intestate property.

(9) Chek-Chakui, i.e. fines collected from the persons of non-sacred-thread-wearing communities guilty of adultery.

(10) Amilan-Rakam, or payments due to local administrators.

(11) Mal-Pota, tax on agricultural lands.
The following sources of revenue were reserved for the government under the thek-thiti arrangements:-

(1) Raja-Anka, or royal levies.

(2) Kalyan-Dham, or treasure troves.

(3) Fines and penalties collected from persons guilty of the following crimes:-

(a) Homicide.

(b) Cow slaughter.

(c) Armed assault.

(d) Incest with hadnata, relatives, and with those belonging to the same gotra.

(e) Incest with relatives within five generations among Brahman, Hutau, and sacrd-thread-wearing Khas castes.

(f) Sexual intercourse with women belonging to the castes mentioned in (e) by slaves.

(g) Sexual intercourse between members of dum (untouchable) and chokha (pure) castes.

(h) Sexual intercourse with Brahman woman by persons belonging to other castes.

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