1. You took a loan of R10 from someone and in order for him to trust you, you kept one of your possessions with him informing him that if you do not trust me, keep this item with you. Once I repay you the R10, I will take my item back. This is permissible. This is known as mortgaging or pawning. However, under no circumstances is it permissible to pay any interest as is in vogue among the merchants and bankers whereby they charge an interest for mortgaging. It is harâm to pay or to accept interest.
After Hadhrat Shuayb (alayhis salaam) had cautioned Hadhrat Musa (alayhis salaam) regarding the significance of the Staff of Nabi Aadam (alayhis salaam) which had now come into Hadhrat Musa’s possession, he (Hadhrat Musa) commenced his duty of tending to the goats of Nabi Shuayb (alayhis salaam). When Hadhrat Musa (alayhis salaam) was about to leave with the goats on the first day of his duty, Hadhrat Shuayb (alayhis salaam) warned him: “O Musa! You may take the goats anywhere to graze, but stay away from a certain location (which he explained). Never go near to that place nor ever turn your face in that direction. It is the abode of an extremely dangerous serpent which will harm the goats.
1. It is a major sin to take an item which belongs to a person forcefully or in his absence. Some women take items that belong to their husbands or other relatives without permission. This is also not permissible. If you take an item without permission and you still have it in your possession, you will have to return that very item. However, if you have already used that item then the rule is that if the same item could be purchased from the bazaar, it will be wâjib on you to purchase it and replace it. Such items are: grain, ghee, oil, money, etc. If the item is such that its exact replica cannot be obtained, then you will have to give money equal to the value of that item. Such items are: fowls, goats, guavas, oranges, pears, etc.
1. Once you have taken a house on rent on a monthly basis and took possession of it, you will have to pay the rent on the expiry of the month. This is irrespective of whether you lived in it or whether it remained empty. In both cases it is wâjib on you to pay the rent.
2. A tailor sewed a garment for you, a dyer dyed it for you or the washerman washed it for you. After carrying out this work, he brought it to you. He has the right of refusing to hand over the garment to you until you pay him for the job that he has carried out. It is not permissible for you to take it forcefully without having paid him.
1. It is wâjib on the man to provide a shelter for his wife. This place must be such that no other relative of the husband lives there. It must be free from any relative of the husband whereby the husband and wife can live without any formalities. However, if the wife does not mind living with others, it will be permissible for him to keep her in the same house with other relatives of his.
Q. “The Fiqh Academy has also allowed installment sales. Does this mean that I can now buy a house in UK or USA on installments bearing in mind that each installment includes repayment of “principal” and “interest”.
A. Sale on installment should never be confused with a transaction of interest bearing loan. In a sale transaction subject matter of contract is a commodity which should necessarily be owned by the seller at the time of sale and should be in his possession. But in the case of loan the subject matter of the transaction is money which is advanced to the borrower. The house financing schemes generally practiced in the western countries are based purely on interest. The banks advance money for the purchase of the house and charge interest on it. The house is mortgaged as a security for the repayment of the loan. This transaction has nothing to do with a transaction of sale on installments.
Q. 1. “The finance Company is asked by clients for Machinery, Cars, Equipment, etc on credit. Can it purchase these and other items by cash or credit and then sell them at either 20%, 30% or 40% profit in conformity to payments period and mutual agreement. Is the above form of contracts permissible or not? The above stated percentage of profit are to be paid in cash by the client while the balance is paid over agreed terms.
A. The proposed transaction is called Murabaha and it can be permissible in Shari’ah subject to the following conditions:
1. We will now explain the rules with regard to items sold by weight, such as dry groceries, meat, steel, copper, vegetables, salt, etc. If a person wishes to exchange or purchase any of the above-mentioned items (or items that fall under this category) in exchange for the same item, e.g. he wishes to exchange wheat in return for wheat, rice in exchange for rice, flour in exchange for flour or any other similar item which is the same, then the rule in this regard is that it is wâjib to take the following two factors into consideration : (i) the weight of the item will have to be equal on both sides. Even the slightest difference in weight will not be permitted. If not, it will be regarded as interest. (ii) If the two parties do not take possession of the respective items, the minimum requirement is that the wheat of both should be kept separately.
1. There are several ways of purchasing gold and silver. One is that gold could be purchased in exchange for gold or silver in exchange for silver, e.g. a person purchases gold with a gold coin which he has in his possession or silver with a silver coin which he has in his possession. In other words, the item that is being purchased is of the same category as that with which it is being purchased. In such a case, two factors are wajib : (i) the gold or the silver on both sides will have to be equal, (ii) the transaction must be complete before the buyer and the seller can separate, there must be no outstanding amount. If they conduct this transaction contrary to any of these two factors, it will be interest. For example, if you purchase silver with a R1 coin (which is made of silver), you will have to purchase the silver that is equal in weight as that of the R1 coin. If it is more or less than the R1 coin, it will be interest.
1. A transaction which is not considered in the Sharî‘ah , which is regarded as useless, and regarding which one will say that it is as if the person did not even purchase the item and the seller did not even sell it, is referred to as bâtil or invalid. The rule with regard to such a transaction is that the person who purchased the item does not become its owner and that it is still considered to be under the ownership of the seller. Therefore, it is not permissible for the buyer to consume it or to give it to anyone. It is not permissible for him to utilise it in any way.