P L d 2000 s c 225 (Riba prohibition stayed)

 

20. Banks, which are the present day custodians of (people’s) wealth and, therefore, the most proximate source of capital, are motivated, in this state of things, only to obtain the maximum returns (usually interest), irrespective of the nature of enterprise financed and to incur the least risk in securing the return of the investment and the gain thereon. The first of these priorities renders financial institutions virtual accomplices in the flow of capital to immoral, or at least unacceptable channels, encouraging speculation, gambling, narcotics, hoarding, luxuries simpliciter and pursuits catering to lasciviousness etc., whereas the second becomes instrumental in concentration of wealth in ever fewer hands because risk-free capital outlay can only be assured by matching collaterals of which the poor segment of society has none or little. It is prompted by the latter of such aspects that democratization of capital-that is the extension of the borrowing power to all classes in society-emerged as one of the notable social movements of the 20th Century. As to the first, regrettably, economists and social scientists have yet to focus attention thereon. The earlier they do so, the better. In this overall milieu, the potential, as to the twain of utility and efficiency, of a venture rarely enters the equation.

 

 

 

21. All this apart, interest, inter alia, is also a known factor in inflating of prices at every level of economic activity viz., manufacture, wholesale retail etc., each economic agent adding its profit in the price charged but treating interest as part of the cost structure on which even income-tax is usually exempt. As against this, evincing partiality, if not anything more, profit is fully taxed, much like any other mode of income. So, pervasive has interest become in the world economic order that members of the work force (particularly in the West) rarely cast eyes on their salaries, the bulk going towards purchases and instalments already constructed, of course, with the inevitable interest ingredient covering a substantial portion of the outgoings.

 

 

 

Having said as much, let it not escape mention that the now well-documented cycles of inflation and deflation, may only be an end product of an interest-based world economic scene (e.g., banks and financial institutions generating manifold money supply etc.), much as the frequent movements of short term (hot) money from one geo-economic zone to another, often bringing misery and devastation in their wake, as has been witnessed recently in the case of the East Asian, so-called tiger economies. The main judgment of the Bench, authored by Mr. Justice Khalil-ur-Rehman Khan, is replete with data, depicting the awesome magnitude of short term money movements, so devastating in their impact. Likewise, the proposed judgment of my learned brother, Mr. Justice Muhammad Taqi Usmani, besides being singularly crudite, also contains valuable source material, reflective of the potential dangers and pitfalls in an interest-oriented economy and the manifold advantages that a Riba-free economic order ensures. As to the alternating cycles of inflation and deflation in the present day economic scene Prof. T.H. Watkins of Montana State University and author of “The Hungry Years: A narrative History of the Great Depression in America,” in his article, “Myth of eternal boom”, focusing on the attitudes of the pupils around him, writes:--

 

 

 

“Although the market has been erratic of late, and there are jitters about inflation, many commentators say there seems to be no reason why this saraband of prosperity cannot continue indefinitely, and confidence continues to ring from nearly every quarter of society.

 

 

 

That includes the young men and women who surround me. I look upon them and wonder if my generation is the last to remember that there is no such thing as limitless prosperity. All booms are followed by busts. All of them.

 

 

 

Most of us grew up with the memory of the worst bust of all, the Great Depression, firmly fixed in our family consciousness; even 1, born in 1936, have floating in my mind shadowy images of destitude men, women and children travelling along Route 66, near where my family lived in California, and my mother and father carried the Depression’s scars all their lives. They used their experience as a cautionary tale, and it is as real to me as the nightly news, sometimes moreso.

 

 

 

Yet I find myself reluctant to play Cassandra to a generation that seems not to want to know the reality written in my family bones: that there once was a time very like theirs in which, as Frederick Lewis Allen put it in `Only Yesterday, the prosperity bandwagon ...rolled down Main Street,’ but that the era ended abruptly and catastrophically, particularly for people of precisely their age.

 

 

 

They cannot imagine that at one point 28 per cent. of Americans had no incomes at all-a figure that, if applied to today’s population, would come to nearly 73 million people. Nor can they imagine that grown men and women, people just like themselves, once were driven to begging in the streets and fighting like junkyard dogs over scraps buried in garbage heaps, or that we still do not know precisely how many people were killed in the longest and bloodiest period of class warfare in our history.

 

 

 

They cannot conceive that it could happen again---that to one degree or another, it will happen again.”

 

 

 

At best, relatedly and consequently, while individuals in an interest ridden society may, ostensibly but momentarily, prosper and while goods and services may be generated from the capital, so expended, the society, as a whole, is potentially the sufferer. The element of Zu1m, thus, demonstrated as the rule rather than an exception in Ribawi transactions, emerges as one of the many reasons why the Shari’ah ordains prohibition of Riba. Viewed, thus, Zu1m often attracts the hikmat if not the illat behind Ribawi pursuits.

 

 

 

22. Islam, as already seen, postulates a welfare society where people may interact by working upon the available resources in a just and fair manner. Partnership between capital and labour for agricultural, industrial, commercial and other productive purposes is, therefore, not only the choice but the only economic activity sanctioned by Islam. The Islamic culture of Zakat (poor tax or a fixed proportionate deduction for sanctification of property), Ushr (tax on agriculture) Khairat (alms or charity), Sadqat voluntary payment to seek Almighty’s pleasure) and Qarooz-e-Hasna (loans repayable at borrower’s convenience and without any return), crowned by free but fair agricultural, commercial, industrial and similar beneficial activities, is the logical answer to the ills of an uncontrolled and unguided system of present day economic strife. In such a socio-economic order, it is exclusively the spirit of cooperation and mutual, aid or assistance, which pervades the society and man strives not merely for wordly gains but also the hereafter by rendering selfless service (Khidmat) to all at hand, that the Almighty has created. Indeed, gratuitous and selfless service (Khidmat) is the third factor of production, contextual to a socialistic economic order (in addition to land and labour), which Islam introduced fourteen centuries ago, attaining thereby, albeit briefly, the religion’s essential economic objective of distributive justice. The foregoing Maqasid-e-Shariah or Masaleh-eShariah are reflected in the numerous verses of the Qur’an. Thus, spending in the way of Allah and for the benefit of mankind is .exhorted in these words:---

 

 

 

“They ask thee (O Muhammad), what ought they to spend (in the way of Allah): Say: “What is beyond your needs.” (S.II:219)

 

 

 

“The parable of those who spend their wherewithal in the way of God is that of a grain of corn: it groweth seven .ears, and each ear hath a hundred grains. Allah giveth increase manifold to whom He pleaseth: and Allah is All-Embracing, All-Knowing”. (S.II: 261)

 

 

 

“And there are those who bury gold and silver and spend it not in the way of Allah; unto them give tidings (O Muhammad) of a painful doom: On the Day when heat will be produced out of that (wealth) in the fire of Hell, and with it will be branded their foreheads, their flanks, and their backs, (and it will be said unto them): Here is that which ye hoarded for yourselves: taste ye then, the (treasure) ye used to hoard!” (S.IX:34-35)

 

 

 

“That which ye lay out for increase through the property of (other) people, will have no increase with God: but that which ye lay out for charity, seeking the Countenance of God, (will increase): it ‘s these who will get a recompense multiplied.” (S.XXX:39) ;

 

 

 

....and nothing do ye spend in the least (in His Cause) but He replaceth it: for He is the Best of Providers.” (S. XXXIV:39)

 

 

 

“Lo! Those who give in charity, men and women, and lend unto Allah a goodly loan, it shall be increased manifold (to their credit), and they shall have (besides) a liberal reward.” (SLVIL18)

 

 

 

“And they feed, for the love of Allah, the indigent, the orphan, and the captive, --- (saying), “We feed you for the sake of Allah alone: no reward do we desire from you, nor, thanks”. (S.LXXVI:8-9)

 

 

 

“(It is)………….freeing the bondman; or the giving of food in a day of privation to an orphan near of kin, or to the indigent (down) in the dust. Then to be of those who believe, and exhort one another to perservance, (patience, and self-restraint), and for deeds of kindness and compassion.” (S.XC:13---17)

 

 

 

“Did He not find thee an orphan and protect (thee)? Did He not find thee wondering, and direct (thee)? Did He not find thee in need and provide (thee)? Therefore, the orphan neglect not, therefore. the beggar drive not away, And, therefore, the bounties of thy Lord convey!” (S.XCIII: 6--11)

 

 

 

Charity as such is enjoined, encouraged and approbated, inter alia, in the following verses:---

 

 

 

“Those who spend their wherewithal in the cause of Allah and do not mar their generosity with insult or with injury for them awaiteth recompense from their Lord---No fear doth come upon them, no sorrow doth touch them.” 262.

 

 

 

“Apology with kind words is better than bestowal with ill-will. Allah is Undependent, Understanding.” 263

 

 

 

“O ye who have believed! Mar ye not your generosity by publicizing it and (thereby) hurting (its recipients). Be not like those who spend for mere show-believing neither in Allah nor in the Final Day. Their likeness is the likeness of a solid rock thinly covered with rich soil: a shower of rain washeth off the soil and lo, it is a barren stone! Naught will they achieve with what they’ve garnered. Allah guideth not pretenders.” 264

 

 

 

“But the likeness of those who spend their wherewithal seeking for the goodwill of Allah and for strengthening themselves (as a group), is the likeness of a garden raised on high-showers of rain and clouds enhance its produce many times, and even` if it raineth not the clouds suffice---Allah, of what they do is quite Aware.” 265 (11: 262--265)

 

 

 

“Those who (in charity) spend of their wealth by night and by day, in secret and in public, verily their reward is with their Lord: on them shall be no fear, nor shall they grieve.” (S.II: 274)

 

 

 

“Those who believe, and do deeds of righteousness, and establish regular prayers and regular charity, will have their reward with their Lord: on them shall be no fear, nor shall they grieve.” (S.II: 277)

 

 

 

“Successful indeed are the believers, who are humble in their prayers, And who shun vain conversation, And who are active in deeds of charity.” (XXUI: 1---4)

 

 

 

“Seest thou one denies the Judgment (to come)? Then such is the man who repulses the orphan (with harshness), and encourages not the feeling of the indigent. So, woe to the worshippers who are neglectful of their Prayers, those who want .(but) to be seen (of men), but refuse (to supply) (even) neighbourly needs”. (S.CVIL 1--7)

 

 

 

Spending in the way of Allah and charitable pursuits have been equated with loans to the Almighty Himself, amongst others, in these verses:---

 

 

 

“Who is he that will loan to God a beautiful loan, which God will double unto his credit and multiply many times?” (S.II: 245)

 

 

 

“If ye loan to God a beautiful loan, He will double it to your (credit), and He will grant you Forgiveness: for God is most Ready to appreciate (service), Most Forbearing,---” (S.LXIV: 17)

 

 

 

In short, the Nizame Zakat, Ushr, Sadaqat, Kairat and Qarooz-e-Hasna preempts and precludes the concentration of wealth in a few hands and what still remains in the way of possessions, after the Islamic law of inheritance further divides it is the subject of such lofty declarations as are reproduced below :-

 

 

 

“It is not righteousness that ye turn your faces to East or the West; but righteous is he who believeth in Allah and the Last Day -and the Angels and the Scriptures and the Prophets: and giveth his wealth, for Him, to kinsfolk and the orphans and the needy and the wayfarer and to those who ask, and to set slaves free; and observeth proper worship and payeth the poor-due. And those who keep their treaty when they make one, and the patient in tribulation and adversity and times of stress. Such are the God-fearing.” (S. II: 177)

 

 

 

“Fair in the eyes of men in the love of things they covet: women and sons; heaped-up hoards of gold and silver; horses branded (for blood and excellence); and (wealth of) cattle and well-tilled land. Such are the possessions of this world’s life; but in nearness to God is the best of the goals (to return to).” (S.III: 14)

 

 

 

“What God has bestowed on His Apostle (and taken away) from the people of the townships, belongs to God, to His Apostle and to Kindred and orphans, the needy and the wayfarer: in order that it may not (merely) make a circuit between the wealthy among you.” (S.LIX:7)

 

 

 

In A1 Nehl (XVI: 95-96) is the following and perhaps the ultimate tiding for those, who hearkened to the call:

 

 

 

“And purchase not a small gain at the price of Allah’s covenant. Lo! That which Allah hath is better for you, if ye did not know.” 95

 

 

 

“That which ye have, wasteth away, and that which Allah hath, remaineth. And verily We shall pay those who are steadfast a recompense in proportion to the best of what they used to do.” 96

 

 

 

No better practical translation of the preceding verses from Al-Nehl is possible than in the ensuing report: The Prophet (s.a.a.w.s.), on one occasion, when he, after the day’s work, returned home. asked whether any thing in the way of edibles was available. Hazrat Aisha (r.a.a.), the Prophet’s spouse, replied that, as customary with the first household amongst Muslims, all that there was had been given to the needy but that a small portion was saved. Replied the last amongst the Prophets (s.a.a.w.s.). Saved is not that, O’Aisha, which you surmise to have retained; in truth, saved is such that you have disbursed, as succour, for the needy and the indigent. So great .was the identity in the Prophet’s (s.a.a.w.s.) word and deed that, after his passing away, when one, who had not seen the Holy Prophet, asked of Hazrat Aisha (r.a.a.) as to what was the Prophet like, the latter, instead of making reply, posed a counter-question viz., whether the questioner had not read the Qur’an whereupon, reply having been received that indeed he had, the Ummul Momineen (mother of the believers) stated that he, the Prophet (s.a.a.w.s:), was the Qur’an personified.

 

 

 

            In so far as the Prophet (s.a.a.w.s.) himself or his family was concerned, he denied either of most of the foregoing offerings. As correctly pointed out by Prof. Hiti, he is the only Prophet, who lived during the period of recorded history, and withstood the test thereof. He (s.a.a.w.s.) first practised on himself and his own, what he preached. As would be seen shortly he, during his celebrated sermon on the occasion of Hajjat-ul-Wida, before abolishing the blood claims of others, began by abolishing that of minor Ibne Harith of Banu Hashim, his own tribe much as, before, finally, remitting interest dues of the rest, first remitted those of his own uncle, Abbas, who had only lately entered the fold of Islam. It was this volubly transparent conduct, which provided such momentum to his message that, in spite of all possible corrupting influences from adversaries, within and without, it is only lately that the march of Islam has momentarily been thwarted. See the quote appearing below:

 

 

 

“He even went to the extent of prohibiting the acceptance of Zakat to the entire clan of Bani Hashim, to which he himself belonged, by proclaiming in an unequivocal manner that ‘Sadqa’ is not allowed to us. On his own part he strictly abstained from accepting charity in any form. It is related by Abu Huraira `that when anyone brought to the Prophet something to eat he used to enquire whether it was by way of gift or Sadqa and partook of it only when he was assured that it was a gift and if it turned out to be Sadqa he declined to eat it and offered it to the Companions’. He also forbade his kinsmen from accepting charity so that they did not become accustomed to it and the Muslims did not choose his family for making such offerings to the exclusion of others. It is related by Abu Huraira that once Hasan bin Ali (one of he Prophet’s grandsons) put a date of Sadqa in his mouth. The Prophet admonished him and told him to spit it out. `Do you know’ he said, `that we do not eat charity’?”

 

 

 

“This injunction held good during the lifetime of the Prophet as well as after his death. It is related that the Prophet once remarked. Sadqa is the grime of the people and it is not permitted to Muhammad and his descendants to accept it. The Islamic Corpus Juris (Fiqh) has consistently upheld this principle and it has been acted upon all the way in Muslim Society. The doors of Zakat and alms-giving have always remained open for the general body of Muslims, to the poor, the needy and the destitute, and their rights have never been ignored.

 

 

 

“The attitude of the sacred Prophet towards his kinsmen was the same in 911 such matter’s. They were kept at the head of others when it came to giving or incurring a loss, but where economic benefit was concerned they received the smallest portion of it. “

 

 

 

23. In other words, the economic order in Islam -is one, which guarantees constant pursuit, optimun employment, fair gains, no poor or destitute, no shelterless, no untended sick or infirm and no sufferer from avoidable human want. Once this system was- introduced and fully worked upon, speaking historically, there were left no men of need qualifying for Zakat and the Baitul Mal (the State treasury) literally overflowed. The system, when practised honestly and sincerely, proved to be the true but effective precursor of the socialistic dogma, reflected in the precept: from each according to his (productive) work to each according to his need. This, however, was achieved without abolishing private property and without holding all things in common. It was the second Caliph in Islam, Hazrat Umar (r.a.a.), who, having fulfilled all human needs of the society completely, was able to declare that even if there be a single hungry dog on a bank of the Tigris he (Umar, in far off Madina) would be held responsible for failing to provide/cater to its hunger.

 

 

 

Anticipating the foregoing analysis and indeed an essential argument of other Juris consults etc. who have appeared before us, the learned counsel for the Federation, Mr. Riaz-ul-Hasan Gillani, has urged that the term Riba, as it occurs in the Qur’an and the Ahadith, is none other than Riba al-Jahiliyyah or Riba al-Nasi’ah, and the Prophet (s.a.a.w.s.) has himself said:

 

 

 

 

 

“Riba is in the nasiah:” (Muslim))

 

 

 

 

 

“There is no Riba except in nasiy’ah:” (Bukhari)

 

 

 

Without questioning the authenticity of the quoted Ahadees, which is usually cited as from Usama bin Zaid (r.a.a.) but also, through Usama (r.a.a.), from Ibn Said al Khudri (r.a.a.) the fact remains that the Holy Prophet (s.a.a.w.s.) also spoke of and, according to some, even introduced Riba alFadl. The significance of the Hadees under reference can, therefore, only be contextual rather than absolute. Ulema (Muslim Jurists) have explained the Hadees in various ways. Some opine that, in the presence of Riba al-Fadl, which may encompass. specified increases even in spot transactions, the only meaning, which can be ascribed to the Ahadees is that such has a nexus merely with non-Ribawi commodities, in exchanges whereof increase is permissible but credit is prohibited. As seen, a number of Ulema of different persuasions, in elaboration, have rendered that where the commodities are different e.g., wheat and barley or wheat and gold/silver, excess in exchange, is allowed and loan alone is prohibited. The same significance is attached by Fuqaha (jurists) to another Ahadees descended from Amirul Momineen (Leader of the faithful), Ali ibn Abi Talib (r.a.a.) namely:

 

 

 

“Every loan from which a profit accrues is Riba. “

 

 

 

Another interpretation, that handed down by Ibn Rushd is:

 

 

 

“It is probable that he intends by his statement, `there is no Riba except in nasiah’, that this is what is the usual case. If this is what is probable, when the first is explicit about it, it is necessary to interpret in a manner that reconciles the two.”

 

 

 

(Bidayat al-Mujtahid, Vo1.2, 163)

 

 

 

Nothing, therefore, turns on the argument, thus, premised.

 

 

 

In further elaboration and indeed support of the foregoing argument viz., that the Qur’an only proscribes Riba al Jahilyyah or Riba al-Nasi’ah the following narration of Imam Malik from Muwatta is also quoted:

 

 

 

“Zaid bin Aslam reported that interest in Pagan times was of this nature: when a person owed money to another for a certain period and the period expired, the creditor would say you pay me the amount or pay interest. If he paid the amount it was well; otherwise the creditor increased the loan amount and extended the period for payment again. “

 

 

 

The passage quoted from Imam Malik is, in turn, occasionally reproduced verbatim by later day Jurists, when recording the essential features, occurring in Riba al-Jahiliyyah. Now, it must straightaway be stated that the contours and paradigms of Riba, which was not mere Riba al-Jahilyyah nor only Riba al-Nasi’ah, are fully set out in the Qur’an and Sunnah and from there it emerges, as clearly as can be, that all fixed or predetermined returns on money or other things of value lent as also in all exchanges of chattel of the kind and subject to the restrictions imposed in the Ahadith, is naught but Riba. As stated above, definitions only constrict the meanings and confine words or expressions to the defining clauses. Islam being the final shape ascribed to religion and descended through the ultimate amongst Prophets, it is in the intendment of the Qur’an and Sunnah that the meanings and implications of Riba have to be discovered. In context, much as the claimed illat for the prohibition is irrelevant not dissimilar is the position of what, allegedly, passed as Riba or otherwise in the days of ignorance (Jahiliyyah).