Resolution No.(58): “Which Party is Responsible for Settling the Usurious Interests In the Following Financial Dispute?“
Date: 9/11/1422 AH corresponding to 23/1/2002 AD.
The Board received the following question:
A citizen had obtained a license for a taxicab agency, so he asked me to buy him a certain brand of cars from a neighboring country because I have an automobile agency. We have agreed upon paying me half of the price in advance, I pay the other half, I process the cars through customs, licensing Dept. and register them in the name of his taxicab agency i.e. his name, and then he pays me the other half afterwards.
After I have delivered my end of the deal and mortgaged the cars to the Jordan-Kuwait Bank, he backed down and didn`t pay the second half due on him, rather, he requested allocating that sum, so I was forced to withdraw my investment account at the Jordan-Islamic Bank, which led my accounts in other banks to be in the red. As a result, the Jordan-Kuwait Bank started charging interests and I was forced to make a new arrangement with the debtor whereby he shall pay the second half of the sum divided over twelve bills in addition to paying an increase over the commission agreed upon earlier. However, before paying the last three bills, I remitted the debtor from half of the agreed upon increase. My question is of three parts:
1- Who is to pay off the interests of the Jordan-Kuwait Bank?
2- Is it permissible for me to calculate the profits that were lost because of withdrawing my investment account at the Jordan-Islamic Bank?
3- What is the Sharia ruling on the increase, which we have agreed upon in return for allocating the second half of the sum due on the debtor?
Answer: All success is due to Allah.
1- The increase agreed upon with the owner of the taxicab agency against (debtor) his delay in payment is unlawful and it is impermissible for the creditor to take it because it is a forbidden interest. Allah Says in this regard {what means}: “but God hath permitted trade and forbidden usury.” {Al-Baqarah/275}.
2- In case the owner of the automobile agency took the aforementioned interest, he should give it back to the owner of the taxicab agency. If that wasn`t possible, then he should give it as charity or spend it in charitable causes and in favor of Muslims` public interest because it is ill-gotten money.
3- The interests charged on the owner of the automobile agency due to the overdrawing of his account are to be settled by him because they are forbidden and resulted from his dealing with a non-Islamic bank. In addition, it is imperative that he avoids dealing in usurious interests, seeks forgiveness of Allah and makes genuine repentance to Him. Allah Says {what means}: “O ye who believe! Fear God, and give up what remains of your demand for usury, if ye are indeed believers. If ye do it not, Take notice of war from God and His Apostle: But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly.” {Al-Baqarah/278}. And Allah Knows Best.
Iftaa` Board
Chairman of the Iftaa` Board, Chief Justice, Izz Al-Deen Al-Tamimi
Dr. Mohammad Abu Yahia
Dr. Ahmad Hilayil
Dr. Abdulsalam Al-Abbadi
Sheikh Mahmoud Shwayyaat
Dr. Yousef Gheezaan
Dr. Wasif Al-Bakhri
Sheikh Saeid Hijjawi
Sheikh Naeim Mujahid
