Understanding Islamic Finance - Doha Academy of Tertiary Studies

164 Understanding Islamic Finance2. A Companion, Miqdad bin Aswad said that he gave someone a loan of a hundred dirhams.He needed money when the holy Prophet sent him along with a delegation. He asked thedebtor to remit ten and pay ninety dirhams. He accepted and paid ninety dirhams. Whenthe holy Prophet came to know, he said: “You got yourself and the other party involvedin Riba”. 52To reconcile the above two traditions, jurists generally believe that the remitted amount(in the first tradition) related to an amount of Riba that was accrued to Jews of Banu Nadhir.This they derive on the basis of details reported by the eminent jurist Wāqidi about theincident. He writes: “ Abu Rafi’i Salam bin al Haqiq had to get 120 dinars from Usaid binHuzair. He agreed to get the principal of 80 dinars and remitted the excess”. 53 This meansthat the remitted amount in Banu Nadhir’s case was that of Riba and not the principal. Thatis why Imam Malik, while giving the view of Ibn Umar and Zaid bin Thabit (Gbpwth) onthis aspect, describes that there is no difference of opinion about the illegality of remitting apart of Dayn payable by anyone and getting the remainder. To Imam Malik, this is just likea person giving more time after a debt becoming due and increasing the amount of debt. Itis Riba without any doubt. 54The third tradition is reported by Bukhari, Muslim and others according to which the holyProphet (pbuh) asked his Companion Ka‘ab bin Malik to waive half of the debt payable byanother Companion Abdullah bin Abi Hadrad while the former was pressing the latter topay his debt; Ka‘ab waived half of the debt. When Abdullah told that he had no resources topay even half the debt, the Prophet asked him to arrange payment from wherever he could. 55Going into details and to resolve the issue, jurists have differentiated between the twocategories of loans, i.e. Duyun Hālah (loans that have become due or could be called back atany time) and Duyun Mu’ajjalah (time of payment is settled between creditor and debtor andthe debt is not yet due). Remission of a part in the former category (due loans) is allowedby almost all jurists on the rationale that in such loans, delay is not the right of the debtor. 56It means that if a debt has become due and it has not yet been paid, the creditor can remita part of the amount for early payment. In this respect, jurists also say that it should not bemade a condition. Imam Malik has captioned a chapter, “If a person purchases on credit,it is not permissible to pay less before the due date” and quoted two traditions reported byZaid b. Thabit and Abdullah b. Umar (Abpwth) not approving discounts on prepayment.Shah Waliullah, in Musawwa, referring to the above two and the tradition of Ka’ab b.Malik and Abu Hadrad (Abpwth), according to which the former waived half of the debt onrecommendation of the holy Prophet, has observed that the former two instances relate todebt not yet due while the latter was due debt (Dayn al Hālah). He also explains that timeof repayment cannot be stipulated in the case of Qard, while in the case of a credit sale (andDayn), the payment time can be settled in the contract. 5752 Baihaqi, 1344 H, Kitab al Buyoo, 6, p.28.53 Waqdi, 1966, 1, p. 374.54 Waliullah, 1353 H, Kitabl al Buyu (Riba fil Dayn), 1, p. 606.55 “Ka‘ab demanded his debt back from Ibn Abi Hadrad in the Mosque and their voices grew louder until Allah’s Apostle heardthem while he was in his house. He came out to them raising the curtain of his room and addressed Ka‘ab, ‘O Ka‘ab!’ Ka‘abreplied, ‘Labaik, O Allah’s Apostle.’ (He said to him), ‘Reduce your debt to one half,’ gesturing with his hand. Ka‘ab said, ‘I havedone so, O Allah’s Apostle!’ On that, the Prophet said to Ibn Abi Hadrad, ‘Get up and repay the debt, to him.’ Muslim, 10, pp. 219,220; Bukhari, Kitab al Khasumat.56 Jassas, 1999, 2, pp. 387–392.57 Waliullah, 1353 H, 2, pp. 50, 51.