Historic Judgement On Interest
Historic Judgement On Interest
Historic Judgement On Interest
The Text of the Historic Judgment on Interest Given by the Supreme Court of Pakistan is a book
to provide an overview on prohibition of riba and it is a landmark verdict given to uphold the
above mentioned principle. The book consists of the text that was originally written by Justice
Muhammad Taqi Usmani, who was the member of Shariah Appellate Bench together with
Justice Khalil-ur-Rahman, Justice Munir A Shaikh and Justice Wajeehuddin Ahmad. The
judgment contained a comprehensive discussion on riba and the other main issues involved in
the abolition of riba in the economy of Pakistan.
There are several quranic verses which emphasizes on prohibition of riba such as:
Another point that has been discussed in this book is on the meaning of riba. Actually, there
is no specific elaboration on riba that had been recorded, however, according to Imam
Abubakar aJassas, riba that is known and practiced by the Arabs was that they used to
advance loan for a certain term with an agreed increase on the amount of the principal
advanced. He also mentioned that riba al-jahiliyyah is a loan given for stipulated period
with a stipulated increase on principal payable by the loanee. In the other hand, according
to Imam Fakhruddin al-Raazi, riba al-nasiah is also one type of riba practiced by the people
of Jahiliyyah when they used to give money with a condition that they will charge a
particular amount monthly and the principal will remain due as it is. Then on maturity date,
they demanded the debtor to pay the principal. If he failed, they would increase the term
and payable amount.
There is an argument about riba al-jahiliyyah on whether the practice of Arabs is the riba
stipulated in Quran or not. The riba stipulated in Quran is the transaction in which no increase
used to be stipulated at the time of advancing a loan. However, if the debtor could not pay the
principal amount at the time of maintaining, the creditor used to offer two options either to
pay principle or to increase the amount in exchange of additional terms. Here, we can conclude
that riba al-jahiliyyah is the riba related to loan or debt transaction.
Another issue that has been discussed is the major difference between the secular capitalist
system and the Islamic principles. Under the former system, loans are purely commercial
transactions meant to yield a fixed income to the lenders. On the other hand, Islam does not
recognize loans as income-generating transactions. They are meant only for those lenders who
do not intend to earn a worldly return through them. Instead of that, in Islamic concept the
money will be offered either on humanitarian grounds to achieve a reward in the Hereafter, or
merely to save their money through a safer hand. As far as investment is concerned, there are
several other modes of investment like partnership which may be used for that purpose. The
transactions of loan are not meant for earning income.
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