From The Mahabharata
Vana Parva, Section XXVII
Addressing King Yudhishthira
Draupadi said: On this subject, the ancient story of the conversation between Prahlad and Vali, the son of Virochana is quoted as an example. One day Vali asked his grandfather Prahlad, the chief of the Asura-s and the Danava-s, possessed of great wisdom and well versed in the mysteries of the science of duty, saying. ‘O sir, is forgiveness meritorious or might (and power) meritorious?
Thus asked by Vali, his wise grandfather, conversant with every conclusion, replied upon the whole subject unto his grandson who had sought at his hands the resolution of his doubts.
Prahlad said: Know O child, these two truths with certainty, viz., that might is not always meritorious and forgiveness also is not always meritorious. He that forgives always, suffers many evils. Servants and strangers and enemies always disregard him. No creature ever bends down unto him. Therefore it is, O child, that the learned do not applaud a constant habit of forgiveness.
The servants of an ever-forgiving person always disregard him and contract numerous faults. These mean-minded men also seek to deprive him of his wealth. Vile souled servants also appropriate to themselves his vehicles and clothes and ornaments and apparel and beds and seats and food and drink and other articles of use. They also do not, at the command of their master, give unto others the things they are directed to give. Nor do they ever worship their master with that respect which is their master’s due. Disregard in this world is worse than death.
O child, sons and servants and attendants and even strangers speak harsh words unto the man who always forgives. Persons, disregarding the man of an ever-forgiving temper, even desire his wife and his wife also becomes ready to act as she wills. And servants also, that are ever fond of pleasure, if they do not receive even slight punishment from their master, contract all sorts of vices and the wicked ever injure such a master. These and many other demerits attach to those that are ever forgiving!
Listen now, O son of Virochana, to the demerits of those that are never forgiving! The man of wrath who, surrounded by darkness, always inflicts, by help of his own power, various kinds of punishment on persons whether they deserve them or not, is necessarily separated from his friends in consequence of that might or power of his. Such a man is hated by both relatives and strangers. Such a man, because he insults others, suffers loss of wealth and reaps disregard and sorrow and hatred and confusion and enemies.
The man of wrath, in consequence of his ire, inflicts punishments on men and obtains (in return) harsh words. He is divested of his prosperity soon and even of life, not to say, of friends and relatives. He that puts forth his might both upon his benefactor and his foe, is an object of alarm to the world, like a snake that has taken shelter in a house, to the inmates thereof. What prosperity can he have who is an object of alarm to the world? People always do him an injury when they find an opportunity.
Therefore, men should never exhibit might in excess nor forgiveness on all occasions. One should put forth his might and show his forgiveness on proper occasions. He who becomes forgiving at the proper time and harsh and mighty also at the proper time, obtains happiness both in this world and the other.
I shall now indicate the occasions in detail, of forgiveness, as laid down by the learned and which should ever be observed by all. Listen to me as I speak! He that renders you a service, even if he is guilty of committing a grave wrong to you, recollecting his former service, you should forgive that offender. Those also that have become offenders from ignorance and folly should be forgiven for learning and wisdom are not always easily attainable by man.
They that having offended you knowingly, plead ignorance should be punished, even if their offences be trivial. Such crooked men should never be pardoned. The first offence of every creature should be forgiven. The second offence, however, should be punished, even if it be trivial. If, however, a person commits an offence unwillingly, it has been said that examining his plea well by a judicious inquiry, he should be pardoned. Humility may vanquish might, humility may vanquish weakness. There is nothing that humility cannot accomplish. Therefore, humility is truly fiercer (than it seems)!
One should act with reference to place and time, taking note of his own might or weakness. Nothing can succeed that has been undertaken without reference to place and time. Therefore, always wait for proper place and time! Sometimes offenders should be forgiven from fear of the people. These have been declared to be times of forgiveness. It has been said that on occasions other than these, might should be used against transgressors.