Hadhrat Mufti Taqi Saheb presents the following suggestion as a stratagem for
legalizing the haraam riba penalty: “For this purpose it was suggested
that the client, when entering into a murabahah transaction, should undertake
that in case he defaults in payment at the due date, he will pay a specified
amount to a chari- table fund maintained by the bank. It must be ensured that
no part of this amount shall form part of the income of the bank”

The first part of this proposal is not original. It has been borrowed from the
capitalist system. This is precisely what all standard hiring, leasing, hire-purchase,
etc. contracts incorporate. There is a clause in all these capitalist contracts
to the effect that the debtor undertakes to pay interest on late payments. This
part of the capitalist contract has been borrowed by Hadhrat Mufti Taqi Saheb
and offered to the Um- mah for incorporation into the Immutable Shariah of Allah —the
Shariah which views riba with an abhorrence worse than the abhor- rence for a
man who fornicates with his mother. The second part, viz. the altruistic proposal
of using this riba for charity, does not detract from the hurmat (prohibition—being
haraam) of the riba charge. The end of altruism does not legalize the haraam
act of riba.

Regardless of the purpose for which the riba will be used, it remains haraam,
and its diversion towards charity is also haraam in view of the fact that the
owner of the money from whom it was extracted un- der duress, usurped and then
expended in charity, remains a living claimant of the money. The owner is known,
hence his property may not be given in charity. The money remains his property
since it was not obtained with his wholehearted and happy consent.

The poor debtor, desirous of enjoying the credit facility, is pressur- ized
to enter into this dubious self-imposition of charity. Sadqah is not Sadqah
when it is not accompanied by a happy heart. It is haraam to extract money
from a man by even the application of indirect pres- sure. Hadhrat Hakimul
Ummat Maulana Ashraf Ali Thaanvi(rahmatullah alayh) has stated the law of the
Shariah in this regard without any ambiguity. Stating the Shar’i position
in this regard, Ha- kimul Ummat said: “If there is pressure of whatever
kind, then I do not consider such contributions to be halaal because the Hadith
Shareef very clearly sounds the command: ‘The wealth of a Muslim is not
halaal (for any- one) except with (his) wholehearted happiness.’ Look!
Rasulullah (sallallahu alayhi wasallam) said, ‘Laa yahillo’ (i.e.
it is not halaal). How then can such contributions be halaal? The condition
for contributions being halaal is that there should be no detestation (in the
heart of the contributor).”

Can it be honestly and sincerely said that a man will unnecessarily and with
a happy heart impose on himself a payment should he fail to meet his commitments
on due date? Yes, it can be claimed without the slightest fear of any contradiction
that the debtor who agrees to this stipulation of self-imposed penalty, accepts
the burden of this riba under duress. He is in need of the credit facility,
hence he agrees to pay riba on any late payment.

The first haraam act is the unlawful pressure which this system ap- plies
to the prospective debtor in indirectly compelling him to agree to pay riba.
The second haraam act is the irrefutable fact that this charge is pure riba
since it is not a valid Sadqah due to the absence of the essential condition
of Sadqah, and that condition according to the Hadith is Teeb-e-Nafs (wholehearted
happy consent). The third haraam act is not to return the money to its owner
who is present. The fourth haraam act is to use the usurped money for charity
when the owner is present as a claimant of his property.

A mitigating factor would have been to use the debtor’s money as a payment
on his debt. Although this mitigating factor is not a licence for the ‘charge’ even
if the motive is to deduct it from the debt, we have nevertheless, presented
it here to highlight the oppression and injustice of the system which takes
from a debtor who is unable to pay his debt on due date, and then divert his
money elsewhere in the name of ‘charity’. However, instead of using
the usurped money to alleviate the difficulty of its owner by deducting it
from his debt, it is diverted to charity. Which principle of the Shariah justifies
this warped logic and misdirection of another man’s property usurped
un- der the flimsiest of pretexts?

Even the courts of Islam are not allowed to impose monetary fines on criminals.
There is Ijma’ on this fact. However, in the view of Imaam Abu Yusuf
(rahmatullah alayh), at times a monetary fine by the court may be imposed as
a deterrent. However, Imaam Abu Yusuf (rahmatullah alayh) clarifies that the
money should be held in trust for the owner, and returned to him after some
time. The money may not be distributed to charity because it was extracted
from the crimi- nal without his Teeb-e-Nafs —without his wholehearted
consent. In even this rare view which is in conflict with the Jamhur Fuqaha,
the imperative requisite is a properly constituted Shar’i Court. And
then too, the money cannot be diverted to charity. What now can we conclude
about the capitalist system of riba pen- alty on late payments which do not
require an Islamic Court for en- forcement — a contract being sufficient — and
which will be di- verted to ‘charity’?

Sadqah is a voluntary act which is undertaken for gaining Allah’s Pleasure
and thawaab. It is not an act which may be imposed on a man by applying indirect
pressure such as the almost certain prob- ability of credit facilities being
denied if the debtor refuses to comply with the supposedly self-imposition
of Sadqah. This stipulation in the contract or application for credit facilities
is baatil and unlawful in the Shariah. The penalty thus remains riba. The rest
of the stipula- tion suggested by Hadhrat Mufti Taqi Saheb is superfluous in
view of the charge being riba without any doubt.

The assurance that no part of this charge will form part of the bank’s
income is of no substance. It does not legalize riba. Whether it forms part
or not of the bank’s income is irrelevant in relation to the pri- mary
argument of the nature of the charge. What exactly is this charge? The Shar’i
definition of riba applies aptly to this penalty for late payments.

The stipulation that “all amounts credited therein shall be exclu- sively
used for purely charitable purpose approved by the Shariah”, is of no
avail. It in no way whatever facilitates the attempt to legalize haraam riba.
An altruistic aim never justifies a forbidden or haraam practice. The proceeds
of prostitution if used for charity do not legal- ize prostitution. The income
acquired from gambling if used for works of charity approved by the Shariah
does not legalize the prac- tice of gambling. In precisely the same way, riba
will not be legal- ized by means of charity.