Question

Fill in the blank with the suitable option given below.
In 1859, the British passed the _________ that stated that the loan bonds signed between moneylenders and ryots would have a validity period of three years.

• A. Ilbert Bill
• B. Rowlatt Act
• C. Limitation Law
• D. Arms Act

Hint:

The Limitation Law of $1859$ is a classic example of a colonial reform law that was meant to protect peasants but ended up worsening their economic exploitation by the sahukars.

Answer 1

The Correct Option is C

Step 1: Historical Context of the Deccan Ryots:
In the $19^{\text{th}}$ century, peasant cultivators (ryots) in the Deccan became heavily dependent on local moneylenders (sahukars). Moneylenders manipulated account books, charged exorbitant compound interest, and kept peasants in a state of permanent indebtedness.

Step 2: Introduction of the Limitation Law of 1859:
To check this ruway accumulation of interest and establish a transparent system, the British passed the Limitation Law in $1859$. The core clause of this law stated that any loan bond signed between a moneylender and a ryot would remain valid for a maximum period of only three years.

Step 3: Unintended Consequences:
The law had severe negative consequences for the peasants. To bypass the three-year limit, moneylenders began forcing the ryots to sign a new bond every three years. During this renewal process, the moneylender would combine the unpaid interest of the previous three years with the origil principal to create a new, vastly inflated principal amount. Thus, the correct option is (C).