Presenting his argument in favour of charging riba for late payment of instalments,
Hadhrat Mufti Saheb says in his book:

“Another problem in murabahah financing is that if the client defaults
in payment of the price at the due date, the price can- not be increased. In
interest based-loans, the amount of loan keeps on increasing according to the
period of default. But in murabahah financing, once the price is fixed, it
cannot be in- creased. This restriction is sometimes exploited by dishonest
clients who deliberately avoid to pay the price at its due date, because they
know that they will not have to pay any additional amount on account of default.”

In the light of the Shariah there are several, objections to this view expressed
by the venerable Mufti Saheb.

(1) The fixation of the price is not a “problem” as the view of
Hadhrat Mufti Saheb suggests because this fixing of the price which may not
be increased if payment is not made on due date is the de- cree of Allah Ta’ala.
If this is indeed a “problem”, then it had existed since the very
inception of Islam. It is not a new development or an expediency which requires
a new Shar’i ruling.

The problem of payment default existed in all times. The problem of deliberate
default by ‘dishonest’ persons also existed since the incep- tion
of the Shariah during the time of Rasulullah (sallallahu alayhi wasallam),
hence he said in castigation of such dishonest people: “The procrastination
of the wealthy is zulm.” In other words, a man commits zulm (injustice
and oppression) if he deliberately withholds payment on due date inspite of
having the means to pay.

This problem was known to Rasulullah (sallallahu alayhi wasallam), by the
Sahaabah and by all the authorities of the Khairul Quroon era, and by all the
Fuqaha and Ulama of Islam right down to the present age. Yet, despite this
knowledge of the problem, no authority of Is- lam, from Rasulullah (sallallahu
alayhi wasallam) down the long cor- ridor of fourteen centuries, had ever deemed
it appropriate to legalize riba on late payments as a penalty and as a reward
for the capitalist or as a benefit to the poor.

Hadhrat Mufti Taqi Saheb, to the best of our knowledge, is the first one to
break ranks with the Guardians of the Shariah and with the fourteen century
Ijma’ on prohibition of this form of riba. While the problem of procrastination
in payments existed in all times, the Shariah had never devised a penalty for
such default because such a penalty of riba is repugnant to the Qur’aanic
concept of Qardh-e- Hasnah (Beautiful Loan), a concept which the Muslim bankers
of to- day highlight in their advertising campaigns to promote their banks.

This riba penalty militates against the Qur’aanic exhortation to grant
the debtor wholehearted extension to pay. There is no stratagem in the Shariah
to legalize the riba penalty of a ‘dishonest’ defaulter or a debtor
who does not deliberately pay on due date. Everything in this ephemeral world
has advantages and disadvantages. Islam, by its prohibition of riba and by
the evidence of the Authorities of the Shariah refraining from levying the
riba penalty, implies that Mus- lims should accept this problem with understanding,
patience and hope for the thawaab of the Aakhirah. We are not allowed nor ex-
pected to react like the capitalist Yahood and Nasaaraa who summa- rily slap
on interest on late payments. The economic life too of the Muslim is regulated
by the moral precepts of the Qur’aan and Sun- nah. He has to look at
the colossal advantage of the reward in the Aakhirah and the increased barkat
in his Rizq which patience brings in its wake.

The fruits of patience in the matter of delayed payment by the debtor is nothing
but goodness. Just look at the list of benefits:

• The Pleasure of Allah Ta’ala, which is the Goal of Life.

• The obtainal of thawaab 16 times more than the thawaab ofQardh-e-Hasanah.

• Acting in compliance with the Qur’aanic exhortation to grant the
debtor an extension.

• Increased barkat in earnings as expressly stated in the Qur’aan.

• Safety from the destructive effects of riba as stated in the Qur’aan.

• Granting relief to a debtor is an ibaadat of high merit, not merely a
mundane act.

On the contrary, if riba is charged on late payments, all the evil ef- fects
of riba are acquired, the ultimate of which is the Ultimatum of War from Allah
and His Rasool (sallallahu alayhi wasallam).

When inspite of the perennial existence of the element of procrasti- nation
(matl) since the very inception of the Shariah, no attempt was ever made by
the Authorities of this Deen to introduce a riba penalty, then it is indeed
surprising and most lamentable for an Aalim, espe- cially of the calibre of
Hadhrat Mufti Saheb, to consider it appropri- ate to break ranks and legalize
such a dangerous practice as riba which is in total refutation of the Ijma’ of
the Ummah. We reiterate that this problem of default existed in all times and
was known to all Authorities of the Shariah, yet no attempt was ever made to
introduce a riba penalty inspite of Rasulullah (sallallahu alayhi wasallam)
hav- ing stated with great clarity: “The procrastination of the wealthy
is zulm.”

This explanation should suffice to show that while the Shariah con- cedes
the problem, it abstains from penalizing the defaulter who may be dishonest
or not. If he is dishonest and defaults by design, the punishment of the Aakhirah
awaits him. And, besides the punish- ment of the Aakhirah, he will not escape
the detriment which either his earnings or his life in general will suffer
here on earth as a conse- quence of the zulm of his deliberate procrastination.

While the fixed price may not be increased according to the Shariah, the thawaab
perpetually increases. Lest people of deficient Imaan as are the capitalist
entrepreneurs in general, frown in askance with our admixture of the moral
precepts of Islam in this cold and dry discus- sion pertaining to economics
and finance, we say that Islamic Akhlaaq, Allah’s Pleasure and Thawaab
are inseparable constituents of the Muslim’s life on earth. No sphere
of the Muslim’s life, and no aspect in any domain of his life, can be
viewed in isolation of the Moral Code of Islam. Hence the introduction of morality
in a discus- sion of this nature is unavoidable. This treatise is addressed
to Mus- lims, not to the kuffaar capitalists.