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Pashu means those whose which are tied and thus Pashupati literally means Lord of those which are tied. Pashu also means Cattles/Animals, and Pashupati also means Lord of Animals

The name PashuPati is given 3 times itself in the Veda Samhita in the Sri Rudram. The 2nd Anuvaka states "Pashunam Pataye Namaha", 8th Anuvaka states "Nama Sangaye Cha Pasupataye Cha" and particularly 5th Anuvaka states:

नमो भवाय च रुद्राय च। नमश्शर्वाय च पशुपतये च।
Salutations to him who is Bhava, who is Rudra, who is Sharva and who is PashuPati.

So, the name PashuPati is of significant importance. What exactly is meant by the name PashuPati? Who actually are the Pashus? By what rope does the PashuPati binds the Pashu? What is the Concept of PashuPati?

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Meaning of Pashupati:

Pashupati means Lord of all Pashus. Here Pashu means every creatures and not just animals. It is clarified itself in the YajurVeda. Yajurveda states:

येषामीशे पशुपतिः पशूनां चतुष्पदामुत च द्विपदम् ।। [YajurVeda 3.1.4]
Which Pashus do the Pashupati rules? He rules both the two footed and four footed.

When Vedas say ruler of two footed and four footed (dwipada , chatuspada) then it has special significance because it is the attribute of Brahman described in the Upanishads. Like the Shwetashwatara Upanishad 4.13 states:

यो देवानामधिपो यस्मिन्ल्लोका अधिश्रिताः ।
य ईशे अस्य द्विपदश्चतुष्पदः कस्मै देवाय हविषा विधेम ॥

He who is the sovereign of the gods, in whom the worlds find their support, who rules over all two−footed and four−footed beings− let us serve that God, radiant and blissful, with an oblation.

Lord Shiva as Lord of all two footed and four footed is also stated in 4.28 of AtharvaVeda:

भवाशर्वौ मन्वे वां तस्य वित्तं ययोर्वामिदं प्रदिशि यद्विरोचते।
यावस्येशाथे द्विपदो यौ चतुष्पदस्तौ नो मुञ्चतमंहस ।। (AtharvaVeda 4.28)

Everything that shines is under your control Oh Bhava and Sarva. Oh Isha you are the lord of all two footed and four footed, Deliver us from grief and trouble.

So, it is itself clear from the Vedas that Pashu means Jeeva. And Pashupati is the Lord of all two footed and four footed.

Shiva Purana also states the same. Upamanyu in Vyayavviya Samhita chapter 1 states:

ब्रह्माद्याः स्थावरान्तश्च देवदेवस्य शूलिनः ।
पशवः परिकीर्त्यन्ते संसारवशवर्तिन ।।
तेषां पतित्वाद्देवेशः शिवः पशुपतिः स्मृतः ।

All those from Brahma to all immobiles who are subservient to Shiva are called Pasus. Being their lord, Shiva is called Pashupati.

How Rudra became Pashupati?

Lord Shiva is Pashupati at all times by his own nature as described in Svetasvatara Upanishad 4.13. Rudra is the avatar of Lord Shiva through Brahma. There are various story on how Lord Rudra became Pasupati. Some of them are:

i) Narration in the YajurVeda:

YajurVeda describes how Rudra became Pashupati during Tripura Dahana. Yajurveda 6.2.3 states it as:

तेषामसुराणां तिस्त्रः पुर आसन्नयस्मय्यवमाथ रजताथ हरिणी ता देवा जेतुं नाशक्नुवन्ता उपसदैवाजिगीषन्तस्मादाहुर्यश्चैव वेद यश्च नोपसदा वै महापुरं जयन्तीति त इषु समस्कुर्वताग्निमनीकं सोमं शल्यं विष्णुं तेजनं तेऽब्रुवन्क इमामसिष्यतीति रुद्र इत्यब्रुवन्रुद्रो वै क्रुरः सोऽस्यत्विति सोऽब्रवीद्वरंवृणा अहमेव पशूनामधिपतिरसानीति तस्माद्रुद्र पशूनामधिपतिस्ता रुद्रोऽवासृजत्स तिस्त्रः पुरो भित्वैभ्यो..... [YajurVeda 6.2.3 ]

The Asuras had Tripuras; the lowest was of iron, then there was one of silver, then one of gold. The gods could not conquer them; they sought to conquer them by siege; therefore they say--both those who know thus and those who do not--'By siege they conquer great citadels.' They made ready an arrow, Agni as the point, Soma as the socket, Visnu as the shaft. They said, 'Who shall shoot it?' 'Rudra', they said, 'Rudra is fierce, let him shoot it.' He said, 'Let me choose a boon; let me be overlord of Pashus.' Therefore is Rudra overlord of Pashus. Rudra let it go; it cleft the Tripuras and drove the Asuras away from these worlds.

ii) Narration in the Shiva Purana and Linga Purana:

Shiva Purana and Linga Purana both narrate the same above story YajurVeda. ie. Rudra being Pashupati during Tripura Samhara. Shiva Purana in Rudra Samhita Yuddha Khanda Chapter 9 and Linga Purana in chapter 72 describes it as:

ततोश्चाश्चोदयामास मनोमारुतरंहसः ।
पुराण्युद्दिश्य खस्थानि दानवानां तरस्विनाम् ।।
अथाह भगवान् रुद्रो देवानालोक्य शकंर ।
पशुनामाधिपत्यं मे दत्तं हन्मि ततोऽसुरान् ।।
पृथक्पशुत्वं देवानां तथान्येषा सुरोत्तमाः ।
कल्पयित्यैव वध्यास्थे नान्यथा नैव सत्तमा ।।
इति श्रुत्वा वचः सर्व देवदेवस्य धीमतः ।
विषादगमनम् सर्वे पशुत्वं प्रति शंकिता ।।

Then the horses which moved with the speed of wind and the mind, were driven in the sky towards the Tripura. Then glancing at the gods, lord Rudra said— “Bestow the lordship of the Pashus on me, after which I shall be able to destroy the Asuras. 0 excellent gods, after giving over the souls of the gods as well as the animals to me, it would be possible to kill the Daityas and not otherwise.” Listening to the words of the learned Shiva, the gods developed a doubt. They were upset with this change and felt disgusted.

Then Lord Shiva tells that their Pasuwato can be removed by performing Pashupata Vrata then all Gods agree:

तथेति चाब्रुवन्देवाः शिवे लोकनमस्कृते ।
तस्माद्वै पशवः सर्वे देवासुरनराः प्रभो ।।
रुद्रः पशुपतिश्चैव पशुपाशविमोचकः ।
यः पशुस्तत्पशुत्त्वं च व्रतेनानेन संत्यजेत् ।।

The Devas then said to Siva who is adored the world over— “It will be done,". That is why the devas, asuras and human beings are called Pasus. Rudra is the lord of Pasus and the liberator of the Pasus for the bondages. He who is Pasu shall discard that state through this holy rite. The scriptures declare that even after committing the sins, he does not become a sinner.

Actually Tripura Dahana has great Tatwic significance. The Tri Pura represent 3 types of Sharira and the destruction means destruction of illusion and ignorance. So it is necessary to submit the soul to Lord while destroying the ignorance for liberation. So, the concept of Pashupati comes here itself from the Vedas.

iii) Narration in the Varaha Purana:

Varaha Purana narrates a slightly different story on How Rudra became Pashupati. It narrates it in the event of destruction of Daksha Yajna. Varaha Purana in chapter 21 states:

रुद्र उवाचः

भगस्य नेत्र भवतु पूष्णो दन्तास्तथा मुखे ।
दक्षस्याच्छिद्रतां यातु यज्ञश्चाप्यदितेः सुताः ।।
पशुभावं तथा चापि अपनेष्यामि वः सुराः ।
मद्दर्शनेन यो जातः पशुभावो दिवौकताम् ।।
स मायापहृतः सद्य पतित्त्वं वो भविष्यति ।
अहं च सर्वविद्यानां पतिराद्य सनातन ।।
अहं वै पतिभावेन पशु मध्ये व्यवस्थित ।
अतः पशुपतिर्नाम मम लोके भविष्यति ।।
ये मां यजन्ति तेषा स्याद्दिक्षा पाशुपती भवेत् ।
एवमुक्ते तु रुद्रेण ब्रह्मा लोक पितामह ।।

Rudra spoke:

Let Bhaga get back his eye and Pusa his teeth. Let the sacrifice of Daksa also attain completion. At my sight, O! Deva you have all become Pashus to me and I take you all to me. I thus become your master. I am also the embodiment of all knowledge and also your eternal master. Being thus the master of all you Pashus, I will attain the name Pashupati in the world. Those who sacrifice for me will have the observance called Pashupati. When Rudra spoke thus. Brahma told him affectionately with a smile. Certainly you will be hailed as Pashupati in the world, and the world will gain renown by your name. The entire world will surely worship you.

Varaha Purana in Chapter 33 states that Rudra became Pashupati to grant Moksha to the Gods:

देवा उचु:
वेदशास्त्राणी विज्ञानं देहि नो भव मा चिरम् ।
यज्ञश्च सरहस्यो भो यदि तुष्टोऽसि नः प्रभो ।।

Devas said: "Give us, 0 god, the knowledge of the Vedas and Shastras and also the sacrifice and its secret, if you are pleased with us.

महादेव उवाचः
भवन्त पशव सर्वे भवन्तु सहिता इति ।
अहं पतिश्च भवतां ततो मोक्षमवाप्स्यथ ।।
तथेति देवास्तं प्राहुस्ततः पशुपतिर्भवान् ।
ब्रह्मा पशुपति प्राह प्रसन्नेनान्तरात्मना ।।
चतुर्दशी ते देवेश तिथिरस्तु न संशय ।।
तस्या तिथो भवन्तं ये यजन्ति श्रद्धयान्विता ।
उपोष्य भोजनीयास्तु गोधूमान्नेन वै द्विजा ।।
तेषां त्वं तुष्टीमापन्नो देही साथानमनुत्तमम् ।
एवमुक्तस्तथा रुद्रो ब्रह्ण्यव्यक्त जन्मना ।।

Mahadeva Said:
May you all be Pashus and I shall be the Lord of Pashus. Then-by you will attain moksha. The gods agreed and Rudra became Pasupati. Brahma then spoke to Pashupati with great pleasure. “O Rudra, let Caturdashi be the tithi for you. On that day those who worship you fasting, and later take in only wheat food, will get your pleasure and this will lead to their liberation. When thus said by Brahma, Rudra restored to Bhaga, Pushan and Kratu the teeth, eye: and testicles respectively. He gave to Devas all knowledge.

In this way Lord Rudra became Pashupati. The slight variation in story of YajurVeda and Varaha Purana could be due to Kalpa Bheda. ie. Gods change in each Manvantaras and Varaha Purana may have narrated story of specific Kalpa/Manvantara.

Concept of PashuPati:

When we have Pashus (ie. Jeevas) and PashuPati (Lord) then there certainly exists a bond in the Jeevas and that bondage is called Pãsha. When we have animals we bind that animal with a Pãsha (rope) and similarly we (Pashus/Jeevas) are also bind with the Pãsha of Pashupati. So there are three things Pashu (which is Jeeva), Pãsha (which binds) and PashuPati (who is Lord and who can put/remove pãsha). Thus the triad Pati Pashu and Pãsha forms the concept of Pashupati. It is explained in various scriptures, some of them are:

i) As told by Lord himself in Ishwara Gita:

Kurma Purana in Part 2 starts with Ishwara Gita and in the seventh chapter Lord himself states as:

आत्मानः पशव प्रोक्ताः सर्वे संसारवर्तिनः ।
तेषां पतिरहं देवः स्मृतः पशुपतिर्बुधैः ।।
मायापाशेन बहनामि पशूनेतान् स्वलीलया ।
मामेव मोचकं प्राहुः पशुनां वेदवादिन ।।
मायापाशेन बद्धानां मोचकोऽन्यो न विद्यते ।
मामृते परमात्मानं भूताधिपतिमव्ययम् ।।
चतुर्विंशतितत्त्वानि माया कर्म गुणा इति ।
एते पाशाः पशुपते क्लेशाश्च पशुबन्धना ।। (Kurma Purana Ishwara Gita Chapter 7)

All the souls in the world have been equated with Pashus. I happen to be the lord of all of them. Because of this I have been known as Pashupati among the people of learning. I bind the animals with my illusory noose. The people well versed in the Vedas, conceive me as the one who releases them from the bondages. There is none else who could get the persons in bondage released except me, the great soul and the unchanging overlord of the bhutas. The twenty four principles, the Maya, Karma (deeds) and the three gunas, are the nooses of Pashupati, and distresses are the bondages of individual souls.

Thus the Maya, Karma and TriGunas are the Pãshas of Pashupati through which a Jeeva gets binded.

ii) As told by Upamanyu in Shiva Purana:

Sage Upamanyu in the 1st Chapter of Vyayaviya Samhita of Shiva Purana explains this concept as:

श्रीकृष्ण उवाचः
कथं पशुपतिर्देवः पशवः के प्रकीर्तिताः ।
कैः पाशैस्ते निबध्यन्ते विमुच्यन्ते च ते कथम् ।।
इति सञ्चोदितः श्रीमानुपमन्युर्महात्मना ।
प्रणम्य देवं देवीं च प्राह पृष्टो यथा तथा ।।
What type of a god is Pasupati? Who is termed as Pasu. Which are the nooses with which they are bound, and how are they freed.” At these words of Krsna, the sage
Upamanyu felt inspired. He also started giving a reply as he had been asked for.

उपमन्युरुवाच:
ब्रह्माद्याः स्थावरान्तश्च देवदेवस्य शूलिनः ।
पशवः परिकीर्त्यन्ते संसारवशवर्तिन ।।
तेषां पतित्वाद्देवेशः शिवः पशुपतिः स्मृतः ।
मलमायादिभिः पाशैः स बध्नाति पशून्पति ।।
स एव मोचकस्तेषां भक्त्या सम्यगुपासितः ।
चतुर्विंशतितत्त्वानि मायाकर्मगुणा अभी ।।
विषया इति कथ्यन्ते पाशा जीवनिबन्धनाः ।
ब्रह्मादिस्तम्बपर्यन्तान् पशून्बध्वा माहेश्वरः ।। (Shiva Purana Vyavayaiya Samhita Chapter 1)

Upamanyu said, “All those from Brahma
to all immobiles who are subservient to Shiva are called Pasus. Being their lord, Siva is called Pashupati. All of them are bound by Shiva by means of dirt or Maya. By adoring the lord with devotion, it is Shiva who gets them freed. The twenty four tatvas are the karmas and the gunas of Maya. They are called Visayas. The Jiva is bound by them. Lord Mahesvara captivates them all, right from Brahma to a pillar.

iii) As told by Shailadi to SanatKumara in Linga Purana:

तैः पाशैर्मोचयत्येकः शिवो जीवैरुपासितः ।
निबध्नाति पशूनेकश्चतुर्विंशतिपाशकैः ।।
स एव भगवान् रुद्रो मोचयत्यपि सेवितः ।
दशेंद्रियमयैः पाशैरंतः करणसंभवै ।।
भूततन्मात्रपाशैश्च पशून्मोचयति प्रभुः ।
आशु भक्ता भवंत्येव परमेश्वरसेवया ।।
भज इत्येष धातुर्वै सेवायां परिकीर्तितः ।
तस्मात्सेवा बुधैः प्रोक्ता भक्तिशब्देन भूयसी ।।
ब्रह्मादिस्तम्बपर्यंत पशून्बध्वा महेश्वर ।। (Linga Purana Uttara Bhaga Chapter 9)

There are twenty four principles which serve as the bonds of Paramesthin. Shiva alone, binds Pashus by means of these bonds. On being worshipped by the Jivas or the individual souls, Shiva alone releases them from the bonds. The same lord on being adored, releases them from the bondages comprising of the ten sense organs, which originate from the inner mind. The lord release the souls from the bonds of tanmatras. The lord binds those who are influenced by the worlds pleasures by means of bonds constituted by the objects of senses. By serving Paramesvara, the souls become devotees, immediately. The root “bhaj’ means service. Thus, the idea of the great service has been brought out by the word Bhakti or devotion. After binding the individual souls from Brahma to the pillat, by means of threefold bonds of the form of gunas, Maheswara himself causes the effect.

Thus the individual Jeeva under ignorance is bound in Pãshas of his one Karmas, Maya of Ishwara, Triguna of Prakirti etc.. Actually Pãshas are of many/ Universal form. The Svetasvatara Upanishad in 1.4 states  "र्विश्वरूपैकपाशं (VishwaikaRupaPãsham)" ie. His Pãsha are of many form.

Removing of Pãsha:

Pãsha means bonds through which Jeevas are bind. When the Jeevas remove the fetter/ Pãsha from them then the soul is Liberated. Thus the rebirth stops when the Jeeva removes the Pãsha. There are various methods through which Jeeva can remove the Pãsha and thus become liberated like:

i) Through the Knowledge of Lord:

By the knowledge of Lord/Brahman all the Pãshas are broken itself and thus the Jeeva is liberated. Shwetashwatara Upanishad 1.8 states:

अनीशश्चात्मा बध्यते भोक्तृ- भावाज् ज्ञात्वा देवं मुच्यते सर्वपाशैः ॥ ८॥
The Jiva again realizes the Supreme Self and is freed from all Pãshas.

Shwetashwatara Upanishad in 1.11 states:

ज्ञात्वा देवं सर्वपाशापहानिः
क्षीणैः वलेशेर्जन्ममृत्युप्रहाणिः ।
When the Lord is known all Pãshas fall off; with the cessation of miseries, birth and death come to an end.

Shwetashwatara Upanishad in 4.15 states:

यस्मिन् युक्ता ब्रह्मर्षयो देवताश्च
           तमेवं ज्ञात्वा मृत्युपाशांश्छिनत्ति ॥ १५॥
In whom the sages and the deities are united. Verily, by knowing Him one cuts asunder the Pãshas of death.

Shwetashwatara Upanishad in 6.13 states:

तत्कारणं सांख्ययोगाधिगम्यं
               ज्ञात्वा देवं मुच्यते सर्वपाशैः ॥ १३॥
He who has known Him, the luminous Lord, the Great Cause, to be realised by Knowledge (Samkhya) and yoga, is freed from all Pãshas.

Shwetashwatara Upanishad in 4.16 states:

घृतात् परं मण्डमिवातिसूक्ष्मं
           ज्ञात्वा शिवं सर्वभूतेषु गूढम् ।
विश्वस्यैकं परिवेष्टितारं
           ज्ञात्वा देवं मुच्यते सर्वपाशैः ॥ १६॥

He who knows Brahman, who is Shiva, extremely subtle, like the film that rises to the surface of clarified butter and is hidden in all beings−he who knows the radiant Deity, the sole Pervader of the universe, is released from all his Pãshas.

Thus the Vedas itself repeat again and again that knowing the Lord one is freed from all Pãshas.

ii) Through the worship of Lord:

Vedas also recommend to worship the three eyed lord (Trayambaka) so that Bandhan (which are actually Pãshas) are removed and one gets Immortality/Liberation. RigVeda 7.59.12, Taittariya Samhita of YajurVeda in 1.8.6.i, Vajasena Samhita of YajurVeda in 3.60 state the same thing as:

त्र्यम्बकं यजामहे सुगन्धिं पुष्टिवर्धनम्
उर्वारुकमिव बन्धनान्मृत्योर्मुक्षीय माऽमृतात् ।।

We worship the Three-eyed Lord who is fragrant and who nourishes and nurtures all beings. As is the ripened cucumber freed from its bondage (to the creeper), may He liberate us from death for the sake of immortality.

Here it is stating "Trayambakam Yajamahe" which means "We worship Trayambaka", and it is stating to remove bondage "Bandhanan" which is actually Paasha and it is for Immortality/Moksha. Svetasvatara Upanishad in 6.5 states;

आदिः स संयोगनिमित्तहेतुः
             परस्त्रिकालादकलोऽपि दृष्टः ।
तं विश्वरूपं भवभूतमीड्यं
             देवं स्वचित्तस्थमुपास्य पूर्वम् ॥ ५॥

The Great Lord is the beginning, the cause which unites the soul with the body; He is above the three kinds of time and is seen to be without parts. After having worshipped that adorable God dwelling in the heart, who is of many forms and is the true source of all things, man attains final Liberation.

And Lord Shiva graces on all those who worship him and as he is PashuPati he removes the Pãshas of Jeevas. Similar there are also some special places when Lord is worshipped or realized in certain places like Varanasi one is liberated.

iii) Through the refugee on Lord:

Vedas also recommend to take refugee on Lord Rudra so that the Pãshas of Jeeva are broken and Jeeva attains liberation. Actually  Shwetashwatara Upanishad states there are very rare souls which take refugee in the Lord:

अजात इत्येवं कश्चिद्भीरुः प्रपद्यते ।
रुद्र यत्ते दक्षिणं मुखं तेन मां पाहि नित्यम् ॥ २१॥

It is because Thou, O Lord, art birthless, that some rare souls, frightened by birth and death, take refuge in Thee. O Rudra, may Thy south facing face protect me for ever!

Similarly there are Veda mantras which invoke Lord Shiva as refugee so that they can pass cycles of birth and death. For eg. In YajurVeda

सद्योजातं प्रपद्यामि सद्योजाताय वै नमो नमः ।
भवे भवे नातिभवे भवस्व माम् । भवोद्भवाय नमः ॥  (YajurVeda Taittariya Aranyaka 10.17.1)

I take refuge in Sadyojata. Verily I salute Sadyojata again and again. O Sadyojata, do not consign me to repeated birth; lead me beyond birth, into the state of bliss and liberation. I bow down to Him who is the source of transmigratory existence.

Similarly as I discuss in my answer here Lord Shiva himself also suggests to abandon all Dharmas and take refugee on him:

सर्वधर्मान्परित्यज्य मामेकं शरणं व्रज ॥ ४३॥
अहं त्वा सर्वपापेभ्यो मोक्षयिष्यामि मा शुचः ।

Abandon all varieties of dharmas and simply surrender unto me alone. I shall liberate you from all sinful reactions; do not fear.

iv) Through the special rite of Pashupata Vrata:

Vedas also again hint of a special rite of Pashupat Vratam which is capable of removing Pãshas of Pashu. The Atharvasiras states:

अग्निरिति भस्म वायुरिति भस्म जलमिति भस्म स्थलमिति भस्म व्योमेति भस्म सर्वंह वा इदं भस्म मन एतानि
चक्षूंषि यस्माद्व्रतमिदं पाशुपतं यद्भस्म नाङ्गानि
संस्पृशेत्तस्माद्ब्रह्म तदेतत्पाशुपतं पशुपाश
विमोक्षणाय ॥ ५॥

He converts fire, air, water, earth, ether and everything that eexists here in to ash. He who sees this and mentally realizes it and observes the “penance to Pashupati ” and who coats ash all over his body with this ash attains the state of Brahman. By worshipping “Pasupathi” like this, the ties of bondage of all beings get cut and they attain salvation.

Here, the penance to Pashupati means a special rite called Pashupata Vratam which is capable of removing the Pãsha of the Jeeva. Actually this method ie. Performing Pashupat Vrata is very highly emphasized in Linga Purana and Shiva Purana. For eg. In the Tripura Dahana event also Shiva tells that they can remove their Pashutwo (Pãsha) by performing Pashupat Vratam:

तेषां भावं ततो ज्ञात्वा देवस्तानिदमब्रवीत् ।
मा वोस्तु पशुभावेस्मिन् भयं विबुधसत्तमा ।।
श्रूयतां पशुभावस्य विमोक्षः क्रियतां च सः ।
यो वै पाशुपतं दिव्यं चरिष्यति स मोक्षतिः ।।
पशुत्वादिति सत्यं च प्रतिज्ञातं समाहिता ।
ये चाप्यन्ते चरिष्यंति व्रतं पाशुपतं मम ।।
मोक्ष्यंति ते न संदेहः पशुत्वात्सुरसत्तमा ।
नैष्ठिकं द्वादशाब्दं वा तदर्धं वर्षकत्रयम् ।।
शुश्रूषां कारयेद्यस्तु स पशुत्वाद्विमुच्यते ।
तस्मात्परामिदं दिव्यं चरिष्यथ सुरोत्तमा ।। [Linga Purana chapter 72]

Realising about the state of their minds, Shiva spoke— “O excellent gods, you should not be afraid of becoming Pashu. You listen to the redemption of the Pashubhava and act accordingly. A person who will perform the Pashupatvrata, he would be relieved of the position of Pasu, He would achieve the greatest goal. O pure ones, I solemnly promise this to  you. O excellent Devas, there is no doubt in this and those others too who perform the Pasupata rite will be liberated from the state of being a Pasu. He who renders service steadily for twelve years or even half of the period or even for three years, can be liberated from that state. Hence, 0 excellent Devas, perform this great and divine Vrata.

Similarly in the Linga Purana chapter 108 "Glory of the Pasupat Vrata" ; it is stated;

अध्रुवेण शरिरेण ध्रुवं साध्यं प्रयत्नतः ।
भव्यं पाशुपतं नित्यं संसारार्णवतारकम्  ।।

One should make all the earnest efforts to achieve the fixed goal through his physical body that is uncertain and unfixed. The excellent, eternal Pashupat Vrata is the cause of redemption from the worldly existence.

Thus the auspicious Pashupatvrata is capable of removing the Pãsha of Pashu and thus enabling liberation. For methods how to perform Pashupatvrat one can refer to Linga Purana Uttara Bhaga Chapter 18 "The Auspicious Pasupat Vrata".

Origin of Pashu:

Now, here comes an interesting concept, who actually are the Pashus? Actually PashuPati himself is in the form of Pashu. Shwetashwatara Upanishad in 1.8 states:

संयुक्तमेतत् क्षरमक्षरं च
      व्यक्ताव्यक्तं भरते विश्वमीशः ।
अनीशश्चात्मा बध्यते भोक्तृ-
      भावाज् ज्ञात्वा देवं मुच्यते सर्वपाशैः ॥ ८॥

The Lord, Isa, supports all this which has been joined together−the perishable and the imperishable, the manifest, the effect and the unmanifest, the cause. The same Lord, the Supreme Self, devoid of Lordship, becomes bound because of assuming the attitude of the enjoyer. The Jiva again realizes the Supreme Self and is freed from all Pashas.

So, the Supreme Lord binds himself (in the Pãshas) and becomes Pashu/Jeeva because of assuming the attitude of enjoyer. That Jeeva/Pashu again is freed from Pashas on realizing the Supreme Self. It is the Leela of the Lord.

  • That's a super-detailed answer. I have a question regarding chronology of this awarding of title to lord Shiva or dating of the Tripurasura battle. Do you know which divya yuga in this manvantara did Lord Rudra destroyed the three cities of the danavas? hinduism.stackexchange.com/questions/30037/… I have tried to put some bounds in this question – sidharth chhabra Mar 4 at 5:17
8

Tezz's answer already explains a lot.

But still, here is what i want to add.

The Kularnava Tantra says:

The body itself is the temple. The jiva itself is God Sadashiva Do away with the faded petals of Ignorance and worship with the Consciousness of 'He am I ' . Jiva is Shiva; Shiva is jiva; the jiva pure is Shiva. When in bonds it is jiva; freed from bonds it is Sadashiva. Enclosed in husk it is paddy; freed from husk it is rice. Enclosed in karma it is jiva; freed from karma it is Sadashiva.

So,the import of the above passage is that, all bonded Jivas are Pashus but when they are free from the bondage(Pasha), then they are none other than the supreme Sadashiva himself.

On what is a Pashu ,which are the Pashas and who removes the Pasha from the Pashu?

According to Mahanirvana Tantra & other Tantra texts:

The term pashu comes from the root pash, "to bind." The pashu is, in fact, the man who is bound by the bonds (pasha), of which the Kularnava Tantra enurnerates eight – namely, pity (daya), ignorance and delusion (moha), fear (bhaya), shame (lajja), disgust (ghrina), family (kula), custom (shila), and caste (varna).... The pashu is also the worldly man, in ignorance and bondage, as opposed to the yogi and the tattva-jnani. Three divisions of pashsu are also spoken of – namely, sakala, who are bound by the three pasha, called anu (want of knowledge or erroneous knowledge of the self), bheda (the division also induced by maya of the one self into many), and karmma (action and its product. These are the three impurities (mala) called anava-mala, maya-mala, and Karmma-mala. Pratayakala are those bound by the first and last, and Vijnana-kevala are those bound by anava-mala only. He who frees himself of the remaining impurity of anu becomes Shiva Himself. The Devi bears the pasha, and is the cause of them, but She, too, is pashupashavimochini, Liberatrix of the pashu from his bondage.

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