Question: Which verse in the Qur’an asks Muslim to set free their slaves at all costs. I know that there are many verses which appeal to Muslims to liberate them. But appeals do not make something obligatory?
    Answer: Islam inherited the institution of slavery. The pre-Islamic Arab society was replete with slaves. In fact, they played a major role in building the social and economic fabric of the society. Since slavery was deeply rooted in the society, Islam adopted a gradual methodology to root out this inhuman institution. Initially, besides a host of other measures¹, slave emancipation was regarded as a pious deed and Muslims were urged and exhorted to free slaves. This of course was enough to make Muslims realize the abhorrence Islam had for slavery. It gradually trained their temperaments and tendencies against what they had been so very used to. 
    Later, sometime in Madinah, when this interim period ended, the Qur’an gave an explicit directive to Muslims to release their slaves if the slaves requested them to do so. The directive is stated in Surah Nur and is called the law of Mukatabat:

وَالَّذِينَ يَبْتَغُونَ الْكِتَابَ مِمَّا مَلَكَتْ أَيْمَانُكُمْ فَكَاتِبُوهُمْ إِنْ عَلِمْتُمْ فِيهِمْ خَيْرًا وَآتُوهُمْ مِنْ مَالِ اللَّهِ الَّذِي آتَاكُمْ

As for those of your slaves who wish to buy their freedom, free them if you find in them any promise and bestow on them a part of your riches which God has given you. (24:33)

    According to this law, every slave who was capable of supporting himself was allowed by law to free himself, provided that he either gave a certain monetary amount to his master or carried out certain errands for him. This was to ensure that he would not become an economic burden on the society and would spend his life as its healthy member. Once he was able to provide this surety, it was imperative on his master to set him free. 
    A special head in the treasury was fixed for this purpose; also, wealthy people were urged to help the slaves in this regard. The net result of this law was that only handicapped and old slaves were left to be provided for by their masters, which not only went in their own favour but also prevented them from becoming an economic burden on the society. An outright order to free slaves at all costs would have been disastrous since many of the older salves never wanted to be free because they had spent their lives in a household becoming part of the family and had no place to go.