THE EXAMPLE OF THE MUDHAARIB AND RABBUL-MAAL
Similarly, on page 81, Mufti Taqi Saheb says:
“The second speciality of the company, viz., its limited liability, is worthy of Shar’i consideration.”
Mufti Sahib presents the Mudhaarib and the Rabbul Maal as an analogy. This is an erroneous presentation. In so far as the company is concerned, the issue of Mudhaarabat is unrelated with the company. In fact, he himself has designated this issue (of the company) ‘Shirkat-e-Musaahamah’ on page 62.
Furthermore, this too is his personal terminology which he has fabricated. For the Sake of Allah Ta’ala, do not fabricate terminologies to ruin the People (of Islam). Inform them unequivocally that the transactions of the stock exchange are improper (i.e. not permissible). They should not become involved in such dealings, for Islam has prohibited this capitalist system. Page 13 You (i.e. Mufti Taqi Sahib) have made the innovation of terminologies the basis in your (capitalist) conception. Both the analogies and the terminologies are your personal inventions. Is this the way of protection? (I.e. protection of the Shariah).The question now is: Who should point out these (erroneous) issues to you?
I should clarify to you that on one occasion you and I had a confrontation on the occasion when you had invited the Muftis of Pakistan. You had then presented interpretations for legalizing bank interest. The discussions proceeded until the evening, and these interpretations were rebuffed (by the Muftis of Pakistan). You thus did not attain the aim for which you had invited the honourable Muftis. Again, I had discussed with you on a second occasion when four Muftis of your institution, Darul Uloom Karachi, had issued the erroneous fatwa on the issue of Waqf on the baseless assumption of it being Wasiyyat. After the discussion with me, you perused my Fatwa and accepted my viewpoint.
You had in fact presented your acceptance in written form. You thus conceded that a Waqf is a Waqf (not Wasiyyat). Even the (Muftis) of (Daarul Uloom Newtown and Jaamiah Faruqiyyah) had accepted my viewpoint. I presented myself on a third occasion to discuss a mas’alah pertaining to Nikah. But your Muftis refused to discuss. I am now, therefore, constrained to present my refutation in writing. I am embarking on this measure solely to close the avenue for the introduction of innovations in the Deen, and to endeavour to drive you and us to follow the Law which has come to us down the corridor of 14 centuries—that Law in which there is no scope for either capitalism or socialism.
In presenting Khaltatush Shuyoo’ as an analogy (for the company entity), you did not even think that it has a shart (imperative condition) which stipulates that the animals of Zakaat should have ten factors in common.
Khaltatush Shuyoo’ as an analogy (for the company entity), you did not even think that it has a shart (imperative condition) which stipulates that the animals of Zakaat should have ten factors in common.
Furthermore, in this regard, Rasulullah (sallallahu alayhi wasallam) said:
“They (the two partners in stock animals of Zakaat) should claim from one another with justice.”
Another stipulation is that in the event of the death/loss of animals, the loss will be borne by each respective owner. Where the owners will refer to one another, the owners will be considered whereas in the mas’alah mentioned by you, the company has merely been cited as a ‘legal person’ while the owners have been separated (and granted immunity—set free from all liability). Despite this glaring difference, how did you present this as an analogy (for the validity of the company)?
On page 82 you say: “Thus the correct analogy is this: The Rabbul Mudhaarib should consent to the Mudhaarib’s acquisition of loans on condition that he, himself, assumes liability for it.”
The stipulation of this condition is improper according to the Shariah since it is in conflict with the muqtadha (demand) of the Mudhaarabat transaction which requires that the Rabbul Maal be liable for the loss which is in excess of the profit. The general principle of the Fuqaha is that a condition which is in conflict with the muqtadha of the transaction is faasid (corrupt and haraam). Why then did you innovate such a condition?
Then, after raising an objection, you also present the solution by averring that the company is a legal person. This in fact is your fabricated terminology which you have invented for the protection of the capitalists. On the basis of this fabrication, you extracted the following consequence: “There remains no way for the creditor to obtain fulfilment of the debt.” (Page 82)
This is your protection (which has been theorized for the benefit of the capitalists). You answer the objections of the Ulama to which you have conceded, by the repeated (and monotonous) presentation of your fabricated terminology that a company is a legal person. On the same page you sought the support of the Hadith of Hadhrat Muaaz Bin Jabal (radhiyallahu anhu). But you overlook the fact that he was a muflis (insolvent) whereas the directors (and the shareholders of the company) are people with capital (i.e. they have money—and huge financial resources). Thus, taking support from this Hadith is baseless.
LIQUIDATION OF THE COMPANY
On page 83 you state: “The liquidation of the company is the death of the legal person”. This is your artificial life, hence your artificial death (all baseless fabrications). There is a well-known example. A robber used to borrow utensils from an avaricious man. When he would return the utensils, he would give more than the number he had borrowed with the comment: ‘Your utensils gave birth to these extra ones.’ Once the greedy man gave all the utensils of the house to the robber hoping that he would receive a large number in return. However, on this occasion the robber said: “All of them died.”
This is the analogy of the life and death of the legal person. Hadhrat Mufti Sahib! There is no scope in Islam for this type of idea, for fabricating theories and swallowing debt, (i.e. defrauding the creditors), then to give Shar’i protection to those who devour the debts.
On page 83 you present Abd-e-Ma’thoon (a slave who is permitted to trade) as an analogy for the validity of the company. But this analogy is also baseless and improper. Abd-e-Ma’thoon is a (real human) slave who can be sold. His liability is limited in view of him being a slave whereas the company directors and shareholders are free persons—persons with money who had acquired loans and incurred debts of their own accord.
EVERY TA’WEEL OF MUFTI TAQI SAHIB IS UNPRINCIPLED
On the same page you aver that despite them being alive, the debt cannot be claimed from them. How could you have made this averment thereby ruining and disadvantaging the creditors (so terribly, unjustly and recklessly)? Maulana Mufti Abdus Sattaar of Multan has correctly said that your every interpretation is beyond comprehension. What is the need for presenting such (baseless) interpretations?
(There is no difficulty in unravelling the mystery of all the weird and baatil interpretations of Mufti Taqi Sahib. The sole aim is to legalize capitalism and its baatil products for the Riba banks of the western world. After all, Hadhrat Mufti Sahib is a member of the so-called Shariah boards of almost all the top kuffaar riba banks of the western world. Mufti Abdus Sattaar Multaani Sahib should therefore not be wonderstruck by the stark weirdness of Mufti Taqi’s unprincipled ta’weelaat—Mujlisul Ulama of S.A.)
On page 83 you proceed to narrate the Shar’i dimension of some important issues of the company. LIABILITY: In this matter too, you have employed several maneuvers. You say: “This liability (of the company) in terms of the Shariah is neither Dhimaan (liability) nor Kifaalat (Securityship).”—Page 84. If this is not liability (in terms of the Shariah) then why did you designate it as liability? You further say: “Kifaalat or Dhimaanat pertains to such debt which is Waajib (incumbent). Purchasing shares is not waajib.”
This means that while accepting it being liability it is not waajib. Mufti Sahib! Shares are not debt. Then you say: “This is commission without anything in exchange which according to Fiqh is bribery.”
Mufti Sahib! Truly this is the reality. But with your interpretations you remove it from the confines of bribery. This is improper for you. You further say: “However, there are some acts for which remuneration may be taken, e.g. inspecting the company and what will be the business of the company, etc.” (From the sublime to the ridiculous—Mujlisul Ulama)
But, remuneration and commission are not acquired for these activities. Those who accept such commission state with clarity that it is by way of dhimaanat (liability). Why do you present interpretations (to negate their explicit claim)? You have shown those who have made clear admissions, the way of legalizing bribery. Secondly, the inspection and assessment are effected for one’s own purchase of shares. What is the meaning of taking commission and remuneration for an activity executed for oneself? What is the commission being paid for?
You have also presented another interpretation, viz., the remuneration is in lieu of the activity of agency of procuring buyers. Thereafter you somersaulted and say: “In practice this is what the banks do. They do not retain the shares. On the contrary, they sell the shares to others.”
This purchase is for oneself. The selling is effected afterwards. How does the bank then become the agent? If there is profit or loss, it is for the account of the bank. In reality the bank, etc. verbally say: “We are liable for the procurement of shares.” You, yourself had finally conceded this. You had also branded this as bribery. But you simply have no valid interpretation.
Towards the end of the same page, you mention an interpretation which you relate to the Ulama. But, you, yourself refuted it. This then is your mas’alah of dhimaanat
THE SHAR’I STATUS OF SHARES
On page 85 you discuss the Shar’i status of shares, their buying and selling. You firstly cite Ulama who had maintained that this trade is not permissible on a certain basis. But, refuting this, you legalize this trade by means of your fabricated baseless interpretations. You have conceded that basically shares are nothing, and that the assets which shares represent are the real things. But then you change your stance.
You concede and also reject. If the assets are the real things, then Zakaat too should be paid on these real (and tangible) entities. However, when you are confronted with the question of Zakaat, you (irrationally) say that Zakaat has to be paid on the market value of shares (i.e. the paper share certificates). You have been constrained to make this ruling because of the inability of awareness of the assets. Why did you venture this (baseless) fatwa?
Similarly, you have presented several interpretations in the matter of Zakaat. But when not a single one of the interpretations could be validly applied, you summarily accepted the aforementioned fatwa. You abandoned the tangible assets and clung to the paper share certificates.
Mufti Saheb! The truth is that irrespective of all the manoeuvring, the ultimate conclusion is that trading (in the stock exchange) is the trade of papers—these share certificates. It is absolutely not the trade of tangible assets. You have conceded that there is in fact no knowledge of the assets.
On page 93 you say: “For the masses of shareholders it is exceedingly difficult (to ascertain the value of the tangible assets), hence there is consensus of all the contemporary Ulama that the market value (of the share certificates) will be considered (for Zakaat purposes).” Mufti Sahib! Is Zakaat paid on merchandise, tangible assets and cash or on paper certificates which are sold in the market? Why do you opt for the market value (of these paper certificates)?
On page 94 you say: “If a share has been purchased with the intention of trade and acquiring profit, then this (share certificate) will be regarded as merchandise (i.e. stock-in-trade subject to Zakaat).”
This is your personal opinion. In it you profess that it is merchandise. It is an admission as well as a rejection. In addition it is also a somersault. In a small pamphlet on the question of trading in shares, you have stated with clarity: “On the contrary, the share (certificate) itself is regarded as merchandise and traded with.”
You then responded:” Just as the buying and selling of shares are permissible, so too is it permissible to sell the shares (which one has procured).”
The effect of this reconciliation between the question and the answer is that you have professed that the share certificates are in fact merchandise. However, to this day there is no one who asserted that these certificates are stock-in-trade. It is thus clear that this is a fabricated artificial trade which you have rendered lawful. These certificates in the market pass from hand to hand. This is a continuous process of transference of certificates. There is no transference of tangible assets. No one has the power to physically hand over assets (which are artificially sold in the imagination), nor does anyone have knowledge of the assets.
In the book, Jadeed Ma-eeshat, you have admitted: “Nowadays, most companies deposit their excess funds in the saving accounts of banks to earn interest.” Page 88
When you have conceded that this is an interest trade, then why have you permitted participation in it? Who has compelled people to participate in this trade? Allah Ta’ ala and His Rasool has prohibited this trade and have sounded severe warnings (of punishment) for such participation. You have said that the word of the shareholder has no weight. He should therefore merely make known (his aversion for the interest). If his word is not accepted, then he is helpless in this matter. However, the question is: Who and what has forced him to participate in this trade? Why has he voluntarily participated in this (haraam) trade?
HADHRAT THAANVI’S SUPPORT?
In the attempt to seek support from the statement of Hadhrat Maulana Ashraf Ali Thaanvi’s statement, Mufti Taqi Sahib has bumped himself. You have sought the support of Hadhrat Thaanvi. But, Hadhrat Thaanvi had made an averment in a doubtful case whereas your statement pertains to most companies, which come within the confines of ghaalib zann (near absolute certitude).(In fact, investment to earn interest as well as participation in a variety of faasid, baatil and haraam trading activities are facts of absolute certitude. There is Qatiyat here, not merely Ghaalib Zann—Mujlisul Ulama)
The difference between shakk and ghaalib zann is manifest. Hadhrat Thaanvi (rahmatullah alayh) had also mentioned that Hindustan is Daarul Harb. But you (Mufti Taqi) are issuing your fatwa in Pakistan which is the land of Muslims. You have therefore erroneously sought to take support from Hadhrat Thaanvi’s statement.
THE VIEW OF SHAIKH SIDDIQ DHAREER
In spite of the contrary view of Shaikh Siddiq Dhareer, Mufti Taqi clings to his improper opinion. Regarding the issue of trading in shares, you state on page 89: “The opinion of the well-known Aalim and expert of Fiqhi transactions, Shaikh Muhammad Siddiq Dhareer is that the basis of this type of trade (i.e. trading in shares on the stock exchange) is pure conjecture and opinion.” (That is opinion bereft of Shar’i substance—Mujlisul Ulama.)
When you, yourself cite the opinion of such an expert Aalim—and this opinion is the reality—then what has compelled you to issue a fatwa of permissibility and present interpretations? (When an Aalim participates actively in the affairs of the devourers of Riba, when he socializes and fraternizes with them, he imperceptibly becomes assimilated in their style of thinking. He loses his Islamic bearings and suffers the convulsions of their indoctrination. Furthermore, being a remunerated employee of the western world’s Riba banks solidifies the indoctrinated opinions of the employers.
There should therefore be no difficulty in comprehending the factors which constrain the vile exercises of baatil ta’weelaat to legalize the abominable practices of riba.—Mujlisul Ulama)
You have also conceded on page 86: “Here cash and other assets are being sold for only cash.” In this instance the sale will be lawful only if there is certitude that the cash (which is tendered) is more. When there is no knowledge whatsoever of this in the trade of shares, the question of certitude simply does not occur. How then did you issue a fatwa of permissibility inspite of Rasulullah’s (sallallahu alayhi wasallam) proclamation: “Shun that which casts you into doubt and adopt that which does not cast you into doubt”? In other words, do not participate in doubtful transactions. Why do you issue a fatwa in conflict with this?
SOME TRANSACTIONS OF THE BANKS
Question: A man purchases a vehicle on instalment basis. For example, he pays R1000 every month. If he defaults in payment, the company (bank) levies a penalty on him. Is this penalty permissible or not?
Answer: If the debtor is in distress, the ruling is clearly stated in the Qur’aan-e-Hakeem: “And if he is distressed, then (grant him) an extension until ability (i.e. until he is able to pay).”And if he is not hard-pressed, then too, it is not permissible to extract a penalty from him. This is established on the basis of the clear texts of the Qur’aan and Hadith.
The Qur’aan states: “Do not consume your wealth (among yourselves) in unlawful ways, taking it to the rulers so that a group may devour the wealth of the people in sinful ways whilst you know…..” (Qur’aan)
“Whoever commits injustice to you, then you too may take vengeance in the (exact) manner as he had transgressed against you, Fear Allah and know that verily Allah is with the Muttaqeen.” (Qur’aan)
“O People of Imaan! Do not devour your wealth among yourselves in unlawful ways, except that it (the manner of acquisition of wealth) is with your happiness….”(Qur’aan)
“And if you take revenge, then do so in the (exact) manner in which they had transgressed…” (Qur’aan)
“Abdullah narrated that Rasulullah (sallallahu alayhi wasallam) said: ‘He who usurps the wealth of a Muslim unjustly, will meet Allah Ta’ ala while He (Allah Ta’ ala) will be Wrathful to him.” (Ahmad)
“Abu Humaidi Saaidi narrated that Rasulullah (sallallahualayhi wasallam) said: ‘It is not lawful for anyone that he un-justly takes the wealth of his brother (Muslim). That is so be-cause Allah Ta’ ala has made haraam the wealth of a Muslim for another Muslim. “(Ahmad)
“Verily, Nabi (sallallahu alayhi wasallam) said: ‘It is not lawful for any person to take (even) the staff of a Muslim without his happy consent, and that is because Allah Ta’ ala has strictly made haraam the wealth of a Muslim for another Muslim.” (Ahmad)
“Abu Hurrah Rafashi narrating from his uncle said that Rasulullah (sallallahu alayhi wasallam) said: ‘Beware! Do not be unjust. Beware! The wealth of a man is not lawful (to take) without the happiness of his heart.” (Shu’bul Imaan, Ad-Daar Qutni)
Whether the stipulated penalty on defaulted payment is of the same kind as the debt or of a different kind, it is explicit riba.
“If the creditor imposes on the debtor a certain sum (to be paid as a penalty) if he does not fulfil his obligation (payment) on due date, there is no difference regarding it being unlawful (baatil) because it is explicit riba regardless of whether the imposed penalty is of the same kind as the debt or a fixed item or a benefit.”
(Tahreerul Kalaamil Khattaab—Buying and Selling by Instalments of Maulana Muhammad Taqi Uthmaani, page 82)
“Because it is not permissible for any Muslim to usurp the wealth of another person without valid Shar’i cause….”(Haashiyah Raddul-Muhtaar, Vol.4, page 61)
According to the Zaahir Math-hub the Mufta Bihi (the official verdict) is impermissibility. (Alaaiyah Shamiyah Tahtawiyah, Bahr Mujma’, etc.—Ahsanul Fataawa, Vol.5, page 557)
“Penalizing with wealth (i.e. paying a fine/penalty) is not permissible according to the Raaji’ version in view of it being the imposition of zulm (injustice) by usurping the wealth of people and consuming it….” (Fiqhul Islaami Wa Adillatuhu, Vol.6, page 201)
“Imposition of penalty by usurping wealth is not permissible according to the Math-hab….” (Bahrur Raa-iq, Vol.5, page 41)
The imposition of monetary fines/penalties is zulm according to the Shariah. There is no basis for it in the Shariah. (This is stated in Imdaadul Muftiyeen, Vol.2, page 907).
PENALTY ON LATE PAYMENT
On the issue of the payment of a penalty on late payment of instalments, Mufti Taqi says in his book, Islam Aur Jadeed Ma-eeshat Wa Tijaarat: For this purpose it was suggested that the client, when entering into a murabahah transaction, should undertake that in case he defaults in payment at the due date, he will pay a specified amount to a charitable fund maintained by the bank. It must be ensured that no part of this amount shall form part of the income of the bank. However, the bank may establish a charitable fund for this purpose and all amounts credited therein shall be exclusively used for purely charitable purpose approved by the Shari’ah. The bank may also advance interest-free loans to the needy persons from this charitable fund.
This proposal is based on a ruling given by some Maliki jurists who say that if a debtor is asked to pay an additional amount in case of default, it is not allowed by Shari’ah, because it amounts to charging interest. However, in order to assure the creditor of prompt payment, the debtor may undertake to give some amount in charity in case of default. This is, in fact, a sort of Yamin (vow) which is a self imposed penalty to keep oneself away from default. Normally, such’ vows’ create a moral or religious obligation and are not enforceable through courts. However, some Maliki jurists allow to make it justiceable, and there is nothing in the Holy Qur’aan or in the Sunnah of the Holy Prophet (sallallahu alayhi wasallam) which forbids making this ‘vow’ enforceable through the courts of law. Therefore, in cases of genuine need, this view can be acted upon.
Honourable Readers! According to Mufti Taqi the first achievement in closing the avenue of delaying payment by debtors, is its substantial acceptance. In Fiqhi Maqaalaat, Vol.1, page 129 it is mentioned that at the time of taking the signature of the debtor, a fixed sum in proportion to the debt should be imposed on him in the event of late payment of instalments. This penalty will be expended in charitable works. This stipulated sum (the penalty) will first be paid to the bank. The bank will then, as his representative, donate the money to charitable works. This measure, according to the book (mentioned above) is the ‘best’ pressure which could be exercised on the debtor to ensure payment. What is the basis for this opinion?
Among the Akaabireen, whose view is this?
“Bring forth your proof if indeed you are truthful.”—Qur’aan.
(1) There is no Mustadal (Basis of Deduction) for this opinion, and Insha’Allah Ta’ ala, there will be no basis forthcoming for it. If some Imaam Khattaab had in his kitaab, Tahreerul Kalaam, mentioned this, it cannot be presented as a daleel as Mufti Taqi has done because in the quoted text appears the word, iltizaam while in the claim(of Mufti Taqi) appears ilzaam (i.e. incumbently imposing). There is the difference of heaven and earth between iltizaam and ilzaam.
(2) Even if we should forgo the above argument, there is a negation between the claim (da’wah) and the (daleel) proof. In the daleel it is stated: On him is a certain sum for a certain person and Sadqah for the masaakeen. However, the claim states that a fixed sum in proportion to the debt be contributed to charitable works by way of tabarru’ (kindness), and this sum should firstly be paid to the bank. This is incorrect. The quoted daleel is mutlaq (unrestricted, with no conditions attached), while the da’wah (claim) is muqayyad (restricted with conditions). There is a stark difference between mutlaq and muqayyad.
(3) In another book, Buying and Selling by Instalments, on page 81, it is mentioned that the banks will supervise this (charitable) fund. This brings the penalty within the scope of the Hadith which brands the benefit acquired from every loan given as riba. It also comes within the purview of the Qur’aanic aayat: “O People of Imaan! Do not devour among yourselves your wealth in unlawful ways, other than by means of such trade which (is transacted) with your happiness…”Mutual pleasure (happiness/consent) is a necessary requisite. In view of the application of pressure on the debtor to extract payment of the penalty, this essential condition (bit-taraadhi) is lacking.
(4) This penalty most certainly comes in the scope of the Hadith of Rasulullah (sallallahu alayhi wasallam): “Beware! Do not be unjust. Beware! The wealth of a man is not lawful except with the happiness of his heart.” (Baihqi in Shu’bul Imaan)
(5) Even if we adopt blindness and assume that this penalty is tabarru’ and sadqah, then too it is not permissible. The definition of Sadqah is wealth given in the Path of Allah Ta’ ala, to the Masaakeen, Fuqara or in any charitable activity to gain His Pleasure. (AapKe Masaa-il, Vol.3, page 422)There is no need to apply pressure on a man for the extraction of Sadqah. There is no need for his signature nor to constrain him to contribute to any specific institution. Sadqah is not encumbered with these types of restrictions. In Sadqah, a man enjoys unfettered freedom of choice of amount and avenue of distribution. He is not under obligation to commit himself with a signature nor to appoint a bank to be his agent in the distribution of his Sadqah.
The matter is aggravated if among the bank’s decision-makers are men of other religions, e.g. Qadianis and Christians. In such an event there is no guarantee that the Sadqah will be correctly distributed. What is more abhorrent than the utilization of one’s Sadqah for the missionary activities of Christianity and Qadianism?
(The author has introduced this dimension in view of the permeation by Christians and Qadianis in Muslim institutions, both private and governmental, in Pakistan. Perhaps, at this stage, there may not be such a noxious permeation of Rijs and Kufr in the so-called Muslim banks of South Africa and elsewhere. Nevertheless, all these banks are controlled and manipulated by an array of juhala, fussaaq, hybrid capitalists, hired ‘scholars’ and downright mercenaries. Their talk of sadqah, tabarru’ and brotherhood is pure deception, advertising gimmicks and stunts to beguile unwary Muslims into their parasitic tentacles bloodied and putrefied by the unabashed wholesale consumption of Riba. —Mujlisul Ulama)
Sight should not be lost of the irrefutable fact that the ‘sadqah’ levy is a monetary penalty which is impermissible and haraam.
“If we even sigh, we are reviled. If they even murder, there is no murmur.”
Stipulation of a monetary penalty is zulm. There is no basis in the Shariah for monetary penalties and fines. Even the Islamic ruler is not empowered to levy monetary fines. Whatever monetary penalties have been imposed on people should be returned to them. And Allah Ta’ ala knows best.