Question :
A trader of cattle receives a monthly amount of cattle feed through a coupon issued to him by the government. However, he doesn`t have the needed cash to buy his share of feed with the reduced price, so he asked me to pay that amount on his behalf using his coupon, then deliver the feed to him. We also agreed that he repays me the money five months later in return for giving me an agreed amount of profit. What is the ruling of Sharia on this?
The Answer :
All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Coupons issued by the government body in charge of cattle feed support is framed in jurisprudential terms as piecemeal grant to person meeting the required conditions in this regard. Thus, it isn`t permissible to sell this coupon since it is a right to whom it has been granted. Accordingly, the condition stipulated by the giver of the coupon must be met. Therefore, the transaction mentioned in the above question is an agency where the owner of the coupon delegated his friend to buy the feed on his behalf and deliver it to him. It is also considered a loan where the price of the feed paid by the above asker is a debt for which the coupon owner is liable. Moreover, in jurisprudential terms, this transaction isn`t framed as trading or commutative contract.
Accordingly, the above transaction isn`t considered lawful because taking profit on a loan is usury/Riba, even by mutual agreement. The evidence on this is that Allah the Almighty says {What means}: "Those who eat Riba (usury) will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaitan (Satan) leading him to insanity. That is because they say: "Trading is only like Riba (usury),"whereas Allah has permitted trading and forbidden Riba (usury)." {Al-baqarah, 275}. And Allah the Almighty knows best.
