KAUTILYA ON ADMINISTRATION OF JUSTICE DURING THE FOURTH

CENTURY B.C.

BY BALBIR S. SIHAG

Kautilya, also known as Vishnugupta or Chanakya, authored The Arthashastra, a

comprehensive treatise meaning “science of wealth,” which covers economic development,
justice administration, and foreign relations. It comprises 150 chapters across fifteen books,
with Book Three (20 chapters) and Book Four (13 chapters) focused on justice. Kautilya’s
judicial system, known as Dandaniti or “science of law enforcement,” addressed both civil
and criminal law by codifying, modifying, and creating laws on matters such as loans,
inheritance, contracts, theft, defamation, sexual offenses, and more.
His contributions to law and order are grouped under three key themes:
(a) Importance of the Rule of Law: Kautilya emphasized that law and order are essential for
economic development. He argued that in a just legal system, the weak could stand against
the powerful, and corruption hindered economic progress by draining public resources and
disrupting governance.
(b) Codification of Laws: Kautilya insisted laws should be written, clear, and consistent. He
codified laws to address outdated traditions and reduce judicial corruption. Codification
helped create accountability among judges, supported by both moral and material incentives.
(c) Administration of Justice: Effective justice depended on:
1. Honesty of law enforcers, including the king;
2. Judicial fairness, involving prompt trials and reliable evidence to minimize errors;
3. Impartiality, proportionality, and certainty of punishment, with a preference for
monetary fines over corporal punishments and emphasis on their enforcement.

Kautilya’s views reflect a blend of historical, imperative, metaphysical, and sociological

jurisprudence, offering insights that remain relevant in contemporary legal thought.

I. AN INTRODUCTION TO KAUTILYA AND THE CONTENTS OF

ARTHASHASTRA
Vishnugupta Chanakya Kautilya wrote The Arthashastra: The Science of Wealth and Welfare
in the late fourth century BC. Though credited with overthrowing the Nandas and installing
Chandragupta Maurya as ruler, The Arthashastra contains no reference to Chandragupta or
Magadha, as it was intended to be a theoretical work. Kautilya, while serving as
Chandragupta’s adviser, remained an independent and austere thinker, as noted by Jawaharlal
Nehru.
Date and Authorship: Although debates exist regarding the date and authorship of The
Arthashastra, Sihag (2004) concludes there is no direct evidence against Kautilya being its
sole author or that it was written in the fourth century BC. Indirect stylistic evidence is
insufficient to disprove this.
Administration of Justice in Economic Thought: There are two main arguments for
including legal issues like justice administration in the history of economic thought.
First, thinkers such as Adam Smith, in The Wealth of Nations, emphasized that a stable legal
system is essential for economic development. Smith argued that commerce and
manufacturing could not thrive without regular justice, property security, and contract
enforcement. This view is echoed by modern economists like Rodrik, Subramanian, Trebbi,
and Glaeser, who analyze legal systems' economic impacts, even if published outside
traditional economic history journals.
Second, Henry W. Spiegel notes that the broadening of economics began with Wicksteed and
continued with scholars like Stigler and Lazear, who labeled economics an “imperial science”
for integrating fields like sociology, law, and politics. Samuelson highlighted how modern
economics applies to a wide range of human behavior, reinforcing this broad scope.
Warren J. Samuels further argues that moral rules, markets, and law are interdependent and
form the foundation of economic analysis. Hence, administration of justice is a legitimate and
essential part of the history of economic thought—comparable in importance to fields like
eugenics, which has also been studied within economic history.
Kautilya’s Arthashastra, originally written in Sanskrit, is now accessible in English, primarily
through L. N. Rangarajan’s translation, with occasional references to R. P. Kangle’s version.
Besides The Arthashastra, Kautilya also authored Chanakya-Sutras and
Chanakya-Rajanitisastra, further contributing to political and legal theory.

II. KAUTILYA ON CORRUPTION OF ENFORCERS AND CRIME DETERRENCE

King as a Role Model

Kautilya stated, “A king endowed with the ideal personal qualities enriches the other
elements when they are less than perfect .” He added, “Whatever character the king has, the
other elements also come to have the same.” Kautilya expected a king to be like a sage. He
explained a sage king: A rajarishi [a king, wise like a sage] is one who: has self-control,
having conquered the [inimical temptations] of the senses, cultivates the intellect by
association with elders, is ever active in promoting the security and welfare of the people,
endears himself to his people by enriching them and doing good to them and avoids
daydream- ing, capriciousness, falsehood and extravagance
Protection of Private Property Rights
According to Kautilya, “The wealth of the state shall be one acquired lawfully either by
inheritance or by the king’s efforts.” He wrote, “Water works such as reservoirs,
embankments and tanks can be privately owned and the owner shall be free to sell or
mortgage them .”
A Justification for Bureaucracy
Kautilya observed, “A king can reign only with the help of others; one wheel alone does not
move a chariot. Therefore, a king should appoint advisers as councilors and ministers and
listen to their advice .” He added, “Because the work of the government is diversified and is
carried on simultaneously in many different places, the king cannot do it all himself; he,
therefore, has to appoint ministers who will implement it at the right time and place .”

Principal-Agent Problem
Adolf Berle and Gardiner Means (1932) highlighted the separation of ownership and control
in corporations, identifying the principal-agent problem, where CEOs (agents) may not align
with shareholders' (principals') interests. Since then, various mechanisms have been explored
to address this issue. Sihag (2007b) notes that Kautilya recognized this problem and proposed
solutions to ensure agents performed optimally and did not engage in misconduct. For
example, he recommended paying judges an efficient wage (8000 panas) to promote honesty
and efficiency.
Frank Knight (1947) also acknowledged the principal-agent issue in governance, asserting
that state enforcers act on behalf of society. While Kautilya shared this understanding, law in
his context was not directly created by the public. However, Drekmeier (1962) noted that
early Indian kingship was seen as a contract based on trust and subject to higher law and
public approval.
Kautilya emphasized the need for honest law enforcers for effective governance. He insisted
on reforming the administration by punishing corrupt officials, enabling fair law
enforcement. He identified thirteen types of harmful individuals, including corrupt judges,
extortionists, perjurers, and counterfeiters, labeling them as "anti-social elements." He
advocated for their exile or compensation according to the severity of their offenses.

Guidelines on Judicial Conduct

Kangle notes that judges in Kautilya’s system were called dharmasthala, indicating their duty
to uphold dharma (law). Kautilya laid out extensive guidelines to ensure fairness and
impartiality in the judicial process. Judges were prohibited from engaging in misconduct such
as intimidating litigants, asking irrelevant questions, ignoring evidence, coaching witnesses,
or causing delays. Violations were punishable, and repeat offenses led to fines and dismissal,
reflecting that judges were not above the law.
Kangle observes that such treatment of judges seems unusual today, as it undermines judicial
dignity and shows their subordination to the executive—there being no legislative body to
oversee judicial removals at the time.
Kautilya also held court clerks accountable, requiring accurate recording of evidence without
distortion. His emphasis on integrity extended to other government officials as well. He
criticized overzealous tax collectors who harmed the populace by extracting excessive
revenue, and advised the king to protect agriculture, punish corrupt officials, and compensate
victims. Officials who lost public trust were to be removed or reassigned to risky regions.

III. KAUTILYA ON JUDICIAL FAIRNESS AND MINIMIZATION OF LEGAL

ERRORS
Current discussion on issues related to judicial fairness is focused primarily on the standard
of proof and minimization of legal errors. Kautilya’s judicial system incor- porated all the
essential ingredients of fairness in resolving disputes. These are explained below.
Expedient Trials
The judicial trials were initiated very promptly, perhaps not to adhere to the dictum that
“justice delayed is justice denied” but due to the belief of an increasing unrelia- bility of
evidence as time passed. Kautilya argued, “Because interrogation after some days is
inadmissible [unreliable?], no one shall be arrested on suspicion of having committed theft or
burglary if three nights have elapsed since the crime, unless he is caught with the tools of the
crime ” However, he did state, “An offender shall not go scot-free [just because of passage of
time] .” He suggested, “The maximum time allowed for a defendant to file his defense shall
be three fortnights ”
Standard of Proof
Kautilya emphasized the importance of truth and reliable evidence in judicial proceedings.
He held that a defendant's admission was the strongest proof; otherwise, judgments should
rely on trustworthy witnesses—ideally at least three—known for their honesty. Factors that
supported a party’s case included clear eyewitness testimony, voluntary admissions, and
consistency, while contradictions and unreliable witnesses weakened a claim.
Kautilya aimed to ensure justice and prevent crime in a system without juries or legal teams,
relying instead on the judge’s subjective assessment of evidence—an approach still relevant
today. He insisted that evidence must be both ample and credible, opposing the modern
reliance on biased or paid witnesses.
In criminal cases, he required suspects to be interrogated in the presence of the accuser and
independent witnesses, and warned against false confessions under torture, citing the need for
conclusive proof before conviction. While he did permit torture in limited, regulated
circumstances where guilt was strongly suspected, he exempted vulnerable individuals and
forbade fatal outcomes, mandating punishment for any deaths resulting from torture. Notably,
he advocated for transparency in interrogation, implying opposition to modern practices
where the accused may remain silent during trial.
Punishment for Perjury
Perjury was a punishable offense. Kautilya (p. 388) stated, “Witnesses are obliged to tell the
truth. For not doing so, the fine shall be 24 panas and half for refusal to testify .”
Futility of Witness Tampering
Kautilya added that if a party to a suit “conspires with witnesses by talking to them in secret
when such conversation is prohibited ” would be an adequate ground against the party.

Cost of Type I Error

Kautilya wrote, “An innocent man who does not deserve to be penalized shall not be
punished, for the sin of inflicting unjust punishment is visited on the king. He shall be freed
of the sin only if he offers thirty times the unjust fine .” According to Kautilya, convicting an
innocent person was a “sin,” that is, an ethical lapse and also a huge monetary loss (“thirty
times”) for the State.
Cost of Type II Error
Kautilya suggested, “If a King is unable to apprehend a thief or recover stolen property, the
victim of the theft shall be reimbursed from the Treasury (i.e. the king’s own resources).
Property [unjustly] appropriated shall be recovered [and returned to the owner]; otherwise,
the victim shall be paid its value .” Two remarks are in order. First, a much broader and more
relevant definition of Type II error is discernible from Kautilya’s statement. He did not make
a distinction between the guilty who were arrested but not convicted and those guilty
defendants who had evaded arrest (this is explained below), whereas the commonly advanced
definition of Type II error is confined only to the guilty defendants who are arrested but not
convicted due to lack of sufficient evidence against them. Second, at that time, no private
insur- ance policies (a case of missing markets) were available against the possibility of loss.

IV. KAUTILYA ON THE OPTIMUM LEVEL OF PUNISHMENT

Role of the Judge
In the absence of a jury, a defense lawyer, and a prosecutor, there was a very heavy burden on
the judges and magistrates to keep legal errors to the minimum. Kautilya expected, “Judges
shall discharge their duties objectively and impartially so that they may earn the trust and
affection of the people.” And in return, as mentioned above, Kautilya recommended a decent
salary of 8,000 panas for a judge (magistrate).
Guidelines on Sentencing
Kautilya stressed that judicial fairness should be based on truthful admissions and credible,
independent witnesses. He required at least three trustworthy witnesses and valued clear,
consistent testimony over contradictions or unreliable evidence.
He emphasized that justice should rely on both the quantity and reliability of evidence, a
concept still relevant today. He rejected biased or coerced testimony and insisted on
interrogating suspects in the presence of the accuser and witnesses.
Although he allowed torture in limited cases of strong suspicion, he strictly regulated it,
excluding vulnerable individuals and prohibiting fatal outcomes—punishing those
responsible if death occurred.
Kautilya believed that solid, conclusive proof was essential before conviction, demonstrating
a commitment to fairness and caution in criminal justice.
Kautilya on Balance between Rules and Discretion
Kautilya recommended that punishments should match the severity of crimes but allowed
judicial discretion based on special circumstances. He advised judges to consider mitigating
factors—such as illness, poverty, fatigue, or being a foreigner—when determining penalties,
and to align fines with local customs and the nature of the offense.
His approach balanced rules and discretion: rules served as guidelines, while discretion
allowed flexibility to adapt to individual cases. He warned that too many rigid rules could
prevent justice in unique situations, while excessive discretion could lead to abuse and loss of
public trust.
V. KAUTILYA ON OTHER RELATED ISSUES
Kautilya’s Preference for a Monetary Punishment
Kautilya recommended monetary punishment over non-monetary ones as well as the “penal
slavery.” In fact, at that time imprisonment as a punishment did not exist. Prisons were used
simply to hold the defendants temporarily for the duration of the trial. Kautilya proposed long
lists of different kinds of physical punishments or monetary fines. However, if the convicted
person wished, he could substitute monetary fines for the physical punishments prescribed for
non-serious crimes. For example, according to Kautilya, a convicted person could pay 54
panas to spare the mutilation of his thumb and forefinger or the tip of his nose. Kautilya
suggested that convicted persons were released from prison only “if they had paid off, by
their work,19 the amount owed by them” or “after receiving a payment for redemption” or
redeemed by charitable persons
Crime Deterrence through Parading the Thieves
Kautilya recommended:
Kautilya advocated public shaming as a deterrent to crime. He instructed that thieves and
robbers be paraded publicly to boost the perceived likelihood of being caught and reinforce
the king's vigilance. For government officials who stole from private citizens, instead of
monetary fines, he prescribed humiliating punishments like being smeared with cow dung,
paraded with broken pots, or exiled—penalties that escalated with the severity of the theft.
This reflects Kautilya’s strategic use of social deterrence and public disgrace to uphold law
and order.
The Four Strikes and You are Out Rule
Kautilya recommended, “In all cases, the punishment prescribed shall be imposed for the
first offense; it shall be doubled for the second and trebled for the third. If the offense is
repeated a fourth time, any punishment, as the king pleases, may be awarded.”
Protection of WhistleBlowers
Kautilya suggested, “Any informant, to whom an assurance against punish- ment has been
given [even if he had participated in the fraud], shall, if the case is proved, receive [as
reward] one-sixth of the amount involved; if the informant is a state servant, one-twelfth. If
the case is proved, the informant [shall be permitted to escape the wrath of the guilty and]
may either remain in hiding or attribute the information to someone else .”
State Representation of the Helpless
Kautilya did show compassion for the helpless. He stated, “The judges them- selves shall take
charge of the affairs of gods, Brahmins, ascetics, women, minors, old people, the sick and
those that are helpless [e.g, orphans], [even] when they do not approach the court. No suit of
theirs shall be dismissed for want of jurisdiction, passage of time or adverse possession” Thus
we find that he proposed a very comprehensive and balanced approach to handle crime and
punishment. Kangle (Part III) concludes it quite aptly, “This very brief review of the law
found in Kautilya will, it is hoped, show how it has been treated by him in the most systema-
tic manner. The treatment is also as full as possible.”
VI. CONCLUSION
Kautilya’s goal was to attain a crime-free society but the “the removal of thorns” was to be
achieved only by resorting to legal means. He proposed a judicial system, which had
built-in-fairness and crime deterrence. If a crime was not solved, the king had to compensate
the victim. So there was an incentive to prevent a crime from happening and to solve it if it
was committed. Similarly, there was an incentive not to commit a Type I error in solving the
crime since the king had to pay thirty times the amount of fine imposed on the innocent. Thus
there was a built-in incentive to minimize the costly errors of omission and commission.
According to Kautilya, monetary punishments imposed in lieu of physical punishments must
be collected. Kautilya pointed out that excessive punishment due to “anger, greed or
ignorance” was counterproductive since people lost respect for the law. He believed that
fairness was essential for political stability, which was a prerequisite for prosperity. Recently,
A. Mitchell Polinsky, and Steven Shavell (2000) assert, “The earliest economically oriented
writing on the subject of law enforcement dates from the eighteenth century contributions of
Montesquieu (1748), Cesare Becceria (1767) and especially, Jeremy Bentham (1789), whose
analysis of deterrence was sophisticated and expansive.” In light of the above presentation of
Kautilya’s ideas on crime and punishment, their conclusion needs modification, because, as
described above, Kautilya’s judicial system was quite advanced and comprehensive—and by
two thousand years.