1987K75 (PLP)

21. Analysing the material on the Holy Qur'an and Sunnah of the Holy Prophet, referred to above, forbidding Muslims to devour interest, it is noticed that as the interest‑bearing transactions were prevalent among the Arabs for a long time and it had taken roots in their economic and social life, the prohibition of interest came gradually. The injunction as contained in S.XXX : 39 of the Holy Qur'an is of an advisory nature, on moral plane, that interest, in reality, does not increase the wealth, but it is the charity, seeking Allah's pleasure, that increases manifold. The other injunction (S.III : 12 forbids Muslims to take compound interest (usury), in order, to be dutiful to Allah the Almighty, so that real prosperity may come to them. Some people thought that 'trade' and 'interest' resembled each other. By verses 275‑76 of S.II, they were condemned by saying that Allah has permitted 'trade' and forbidden 'interest'. Then came the admonition that whoever devours interest will stand like the one whom Satan has bewildered and maddened by his touch. Then they were ordered to desist from taking interest and he who abstains from taking interest shall be pardoned for his past actions, but he who repeats the same shall go to Hell, where he shall abide for ever. Then came an absolute injunction to Muslims to forego interest, if they really believe in Him and then came the warning, that if you do not forego interest, which has already accrued to you, and desist from taking it any K further, beware of war on the part of Allah and His apostle. This warning, in fact, implies that whoever wants to be in peace with Allah and his apostle he is to desist from taking interest, otherwise state of war with Allah and His Prophet continues. Then came another injunction to be satisfied with receiving back the principal amount, followed by an advice that if the debtor is in difficulty, time be given to him (S.II:277‑80). At the end, (S. II:281), there is a reminder to have fear of Allah and that when they will go back to All4h, on the day of resurrection, each one will be paid back for what he has earned in this world.

22. Those who are of the view that it is the interest doubled and redoubled. I only, which is prohibited (Verse 130 of ? Surah Al‑i‑Imran fail to take into consideration the other verses on the subject. It is one of the accepted principles of interpretation of the Qur'an that firstly the Qur'an should be interpreted by the Qur'an itself. Therefore, for the correct interpretation of a verse in the Holy Qur'an, the other verses of the Holy Qur'an, on the subject, must be looked into and taken together to find out the real intention of the Qur'an and., then, the Sunnah of the Holy Prophet viz. his word, act? and maintaining silence one's words spoken or act done in his presence by the Holy Prophet be called in aid for its interpretation. Therefore, some of the writers on interest who have expressed their view that it is only the 'usury' (compound or excessive interest) which is prohibited or, in other words, it is the excessive rate of interest, which is prohibited and not a small percentage, to say the least, are entirely mistaken. I may here quote a passage from a notable work of late Dr. Fazl‑ur‑Rahman Ansari "The Qur'anic Foundations and Structure of Muslim Society", Begum Aisha Bawany Wakf, Karachi, Vol. II, P.327, which reads that:‑

"Because Riba is generally translated as usury, and because in modern parlance 'usury' signifies only an 'exorbitant rate of interest' some people have fallen into the error that what the Holy Qur'an has really forbidden is an excessive rate of L interest. In truth, it is only a misinterpretation of the term Riba and a perversion of the Qur'anic teaching. That the Holy‑Book does not distinguish between 'exorbitant' and 'reasonable' rates of interest is clear from the following: "(Verse II : 278‑80). In this??? respect, I may also refer to the verse of the Holy Qur'an? (Surah Al‑Maidah, 5:44) that is "Barter not my Signs for a paltry gain". Does it mean that only the barter for a "small" gain/price is prohibited and if the price is "high", there is no prohibition. Only a literalist, unaware of the style and manner of expression of the Qur'an will so contend. In fact, the verse implies that if the entire world is offered to d Muslim in lieu of His one "Sign", the price offered is still small and one should not sell his religion? (Din) in consideration thereof. Therefore, the words are to pinpoint the aggravated situation then prevailing in certain parts of Arabia, which .is highly deprecated. It is, therefore, not that only exorbitant or excessive rate of interest is prohibited but it includes a small percentage also. The words Riba as used in the Qur'an is absolute in terms, and no attribute or qualification as to its quantity is to govern it, nor it has any credence (Refer; city).

23. I may now refer, on the question of prohibition of Riba, the first paragraph (p.l) of the "Report of the Council of Islamic Ideology on the Elimination of Interest from the Economy", Islamabad, 1980, which reads as under:‑

"The elimination of interest occupies a key position in the establishment of the Islamic order. The phraseology of the verses of the Holy Qur'an as well as of the Ahadith which condemn the institution of interest clearly portrays the Islamic point of view in this regard. Pakistan being an ideological State, the abolition of Riba from the very beginning formed an integral part of State Policy as enshrined in her Constitution. In this connection, the Council of Islamic Ideology has frequently been called upon to delineate the true meaning of Riba and to elucidate the verses of the Holy Qur'an pertaining thereto. The Council has all along expressed the view that the term) Riba encompasses interest in all its manifestations, irrespective of whether it relates to loans for consumption purposes or for productive purposes, whether the loans are of personal nature or of commercial type, whether the borrower is a Government, a private individual or a concern, and whether the rate of interest is .low or high . Yet, there has hitherto been hardly any noteworthy progress towards the elimination of interest from the country's economy."

24. And lastly, I may quote a passage from Muhammad Encyclopedia of Seerah, The Editorial Board?Afzalur Rahmn, published by The Muslim' Schools Trust, London, 1982, VOI.II p. 418, which reads as under:‑

?To sum up: 'Islam recognises the right of man to seek his livelihood on God's earth according to his capacity, ability and natural endowments. But it does not concede him the right to adopt such means in the acquisition of wealth as could lead to his moral degradation or upset the social order. Islam sets the distinction of Halal (lawful) and Ha (unlawful) in respect of the different means of earning and imposes the ban of illegality on all those methods which are morally or socially injurious. For this purpose, it has clearly specified those methods which it regards as injurious. Under the Islamic Law, wine and other intoxicants and drinks which spread evil and immorality are not only unlawful (Haram) in themselves, but even their manufactures, sale, purchase and possession have been declared to be unlawful. Islam does not recognise adultery, intoxicating, music, dancing etc., as lawful means of livelihood. It declares all such dealings as unlawful in which the gain of one individual is secured by the loss and injury to some other person or persons or society as a whole. Bribery, stealing, gambling, speculation, business based on fraud and deceit, boarding and holding back the necessaries of life with the object of raising prices, monopolies of the means of production by one or several persons which narrow down the field for others; all these methods have been declared unlawful. It has picked out carefully and branded as illegal all such forms of business as are by their nature capable of causing dispute, or in which the loss or gain depends on mere luck or accident, or wherein the rights of the parties are not distinguishable."

25. In order to analyse the nature of the right to interest on a money claim before a Court of law, I can do no better than quote from an unreported judgment, dated 27‑3‑1987 of the Honourable Supreme Court in Civil Appeal No.K‑78 of 1983, Ghulam Abbas v. K.P.T. It was observed that:‑

"In order to further examine this question, it is necessary to analyse the nature of right to interest on a money claim before a Court of law and on the same analogy before the domestic forum of an Arbitrator. The right to interest, for the period prior to the date of suit or prior to the reference to arbitration is a matter of substantive law, as contrasted with the power given to a Court of law under section 34, C.p.C. or section 29 of the Arbitration Act which is a statutory power within the domain of procedural law. In the present controversy firstly we are concerned with the right claimed substantively by the contractor for a period before the matter reached the forum for adjudication as a liquidated claim based on a legal right. The right to interest, for the period prior to ,the suit arises in one of the four following ways: (i)??? agreement, express or implied between the parties, (ii)?? mercantile usage, (iii)? statutory provisions (iv)? interest may be also allowed on equitable grounds in proper cases." In the aforesaid judgment reference was made to the case of Bengal Spur Railway Co. v. Ruttanji Ramii and others A I R 1938 PC 6? wherein it was observed:‑ "The crucial question, however, is whether the Court has authority to allow interest for the period prior to the institution of the suit; and the solution of this question depends, not upon the Civil Procedure Code, but upon substantive law. Now, interest for the period prior to the date of the suit may be awarded, if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provisions of any substantive law entitling the plaintiff to recover interest, as for instance, under section 80, Negotiable Instruments Act, ????? 1881, the Court may award interest at the rate of 6 per cent per annum, when no rate of interest is specified in the promissory note or bill of exchange."

26. Reference in the aforesaid judgment was also made to another case, Muhabir Prasad Run to v. Dun a Datta A I R 1961 S C 990 which was to the effect that interest or a period prior to the? commencement of suit is claimable either under an agreement, or usage of trade or under a statutory provision or under the Interest Act, for a sum certain where notice is ,given. Interest is also awarded in some cases by Courts of Equity. As regards interest pendente lite, the Court expressed the opinion that such interest can be granted also on the same basis so far as the right to claim interest is concerned."

27. Thus, a claim to interest under the present law can be based, as held above, on (1) Statute, (2) Contract, (3) Trade usage and (4) Equity, in a particular case. So far as claim of interest based on law i.e. sections 79 and 80 of the Negotiable Instruments Act, 1881 is concerned it is now to be tested on the touchstone of the Qur'an and Sunnah which, as, I have noticed above, prohibit it. As regards contract, no effect can be given to an agreement if it is contrary to an express provision of law. In Islam by Sulh'? (compromise) nothing can turn Haram (unlawful) into Halal (lawful), or vice versa. Same thing applies to mutual agreements an contracts. Soar 'trade usage' is concerned, Islamic law recognizes usage or custom as one of the secondary sources of law. Islamic System of law also accepts the legal force and authority of custom and usage. The word (Ma'ruf ) in the Holy Qur'an is a pointer to it. Thus, the custom and usages prevalent during the lifetime of the Holy Prophet Muhammad (Sallallaho 'alayhi wa Sallam) and if the Qur'an or Hadith did not repeal them or the Holy Prophet maintained his silence over them, they were deemed to have been carrying the legal validity. "It is laid down in A1‑Ashbah wa'n‑Nadhair: 'Many decisions of law are based on usage, so much so that it has been taken as a principle of law". "(Muhammadan Jurisprudence, Sir Abdul Rahim, 1958 Ed. Lah. see Custom".) The Islamic legal maxim,) i.e. usage is like textual manifestation (of lax), goes to that extent to recognize the usage but usage is always subservient to the nass text of law). If, however, custom or usage is against the divine law or even an Ijma (concensus), they are not enforceable. So far as equity is concerned, the Courts in the Islamic Republic of Pakistan are not supposed to recognise any more as valid the English principles of justice, equity and good conscience. The English concepts must now, in the changed circumstances, give way to the Islamic concepts and principles of justice, equity and good conscience. Reference may be made to the judgment of Mr. Justice Muhammad Afzal Zullah (now, Judge of the Supreme Court) in Haji Nizam's case P L D 1976 Lah. 930 and my own judgment in Qaiser Ali and others v. Karachi Road Transport Corporation PLD 1963 .489. However, the principle of equity is not allowed to play its role independently in the presence of a clear provision of law. The principle of equity comes into play when there is no provision of the Qur'an and the Sunnah or the Ijma' opposed to the principle of equity, in a given situation. It is only when the situation is to be governed by (analogy) that equity gets preference over it, which is wider in its scope than analogy.

28. The claim of interest in the suit before me falls within the sphere of substantive law as well as procedural law, viz. Sections 79 and 80 of the Negotiable Instruments Act, 1881, Section 34 and Rule 2 of Order XXXVII of the Civil Procedure Code, 1908.

29. For the reasons given by me in my order dated 16‑4‑1987 in Bank of Oman v. East Trading Co. and others in Suit So.519/84, PLD 1987 Kar. 404 this Court is not only competent but bound to enforce 'the existing law' with such adaptations as necessary in R accordance with the Qur'an and Sunnah. I had summed up my conclusions in the said order as under:‑ "The upshot of the entire discussion is that the Courts in Pakistan are bound by the Constitution, and any law repugnant to the Constitution is void. The principles and provisions of the Objectives Resolution, by virtue of Article 2‑A, are now part of the Constitution and justiceable. Any provision of the Constitution or law, found repugnant to them, may be declared by superior Court as void, subject, however, to the limitations imposed by Articles 203‑A, B(c) 203‑D, 103‑G and 203‑GG of the Constitution, whereby special and specific jurisdiction has been conferred on the Federal Shari'at Court to declare the law (as defined by Article 203‑B(c) read with Article 203‑G) or any provision thereof, as repugnant to the Injunctions of Islam laid down in Holy Qur'an and Sunnah of the Holy Prophet and that the said law or any provision thereof has been so declared by it (Article 203‑GG)".

30. Clause 3 of the Objectives Resolution, now forming part of the Constitution (Article 2‑A) reads as under:‑

" . . the Muslim shall be enabled to order their lives in the individual and collective spheres in accordance with the teachings and requirements of Islam as set out in the Holy Qur'an and the Sunnah:" So, it is the Constitutional command for the State (Islamic Republic of Pakistan) to take such steps as would "enable" the Muslims of Pakistan to live as Muslims. Therefore, any law which not only disregards such a commandment but positively violates it, is to be disregarded in view of Article 2‑A. The provisions of Sections 79 and 80 of the Negotiable, Instruments Act, 1881, Section 34 and Rule 2 of Order XXXVII, C.P.C. so far as they relate to awarding interest on money claims are clear violations of the Constitutional mandate, as provided in Art. 2‑A read with clause 3 of the Objectives Resolution, S referred to above. The aforesaid provisions of law and Rules, on the other hand, 'disable' Muslims of Pakistan from leading their lives as Muslims, according to the requirements of Islam as set out in the Holy Qur'an and Sunah in relation to Riba (interest) and, therefore, for the obvious repugnancy to the Injunctions of Islam, contained in the Holy Qur'an and Sunnah, extensively quoted by me in the foregoing paragraphs, the aforesaid provisions of substantive as well as procedural law relating to interest (Ribs) cannot be enforced by this Court, due to their repugnancy to the mandatory provisions of the Qur'an and Sunnah relating to interest (Riba). I may further state that in several other judgments of mine, such as Star Trading Company v. Pakistan Insurance Corporation 1987 C L C 61 and Qaiser Ali and others v. Karachi Road Transport Corporation P L D 1986 Kar. 489, I have avoided to award interest, though in different context.

31. Before parting with this discussion, it may be added that I am conscious of the Constitutional position as laid down in Article 189 of the Constitution that law declared by the Honourable Supreme Court is binding on all the Courts of Pakistan, but I feel equally bound by the provisions of Art. 2‑A of the Constitution, and since I have already held that Art. 2‑A is in the nature of a paramount clause and supra‑Constitutional, it covers Art. 189 also, and so law T declared by the Honourable Supreme Court either prior to insertion' of Art.2‑A or without considering the said Article, with utmost respect, is also, in my humble opinion, subservient to the provisions of Art. 2‑A. I may here venture to reproduce relevant paragraph from Haji Nizami's case P L D 1976 Lah.

930. It reads:‑ "All doubts in interpretation of law and appreciation of evidence would be resolved in manner consistent with Islamic Principles and jurisprudence in preference to any contrary norm. Courts for which law declared by a superior Court is binding as law, when faced with any of the above situation qua precedent binding law, would treat it as if written law but, in order to assist and act in aid of the superior Courts which laid down the precedent might, with respect, deliberate Islamic point of view which would in turn help reappraisal and reinterpretation on Islamic lines. Such points would ordinarily have to be raised and canvassed formally so as to take advantage of. The controversy in each case would have to be specified after due study with the help of the Bar. This would help the entire judicial system to develop on the pattern envisaged in the ?Constitution. "

32. Reliance may also be placed on the case of Jibendra Kishore Achharyya Chowdhury v. The Province of East Pakistan PLD 1957 SC

9. It was, inter alia, a case of violation of Article 18 of 1956 Constitution which declare that "Subject to law, public order or morality, (a) every citizen has the right to profess, practise and propagate any religion; and (b) every religious denomination and every sect thereof has the right to establish maintain and manage its religious institution in accordance with his religion. It was observed that: "There can be no doubt that these drastic provisions of the Act strike religious institutions at their very root, and the question is whether, that being the effect of the provisions, they constitute an infringement of the fundamental right guaranteed by Article 18 of the Constitution?? The very conception of a fundamental right is that it being a right guaranteed by the Constitution cannot be taken away by the law, and it is not only technique filly inartistic but a fraud on the citizens for the makers of a Constitution to say that a right is fundamental but that it may be taken away by the law. I am unable to attribute any such intent to the makers of the Constitution who in their anxiety to regulate the lives of the Muslims of Pakistan in accordance with the Holy Qur'an ands Sunnah could not possibly have intended to empower the legislature to take away from the Muslims the right to profess, practise and propagate their religion" . . . . . . . . . . . . . . . . . . . . . . . . .? This judgment is cited in support of the proposition that any law which contravenes any provision of the Constitution can be disregarded I by a Court of law.

33. I would also like to add that the said judgment may be applied and interpreted as to the power of the Court to disregard the provision of law found repugnant to the Constitution and, thus, in the given situation that the existing law viz. Sections 79 and 80 of the Negotiable Instruments Act, 1881, Section 34 and Rule 2 of Order XXXVII of the Code of Civil Procedure, 1908 relating to grant of interest by this Court must yield to the Injunctions of Islam contained in the V Holy Qur'an and Sunnah relating to interest (Ribs) by giving effect to the principles and provisions of the Objectives Resolution made part of the Constitution by virtue of Article 2‑A .

34. In the end, I would like to quote several verses from the Holy Book of Allah, which are self‑explanatory:‑ (O? ye who believe! Enter into Islam Whole‑heartedly And follow not The footsteps Of the Evil One; For he is to you An avowed enemy (S.II:208) (The Religion before Allah Is Islam (submission to His Will): Nor did the People of the Book Dissent therefrom except Through envy of each other After knowledge had come to them. But if any deny the Signs of Allah, Allah is swift in calling to account) (S.III:19) (If anyone desires A religion other than Islam (submission to Allah), Never will it be accepted Of him; and in the Hereafter He will be in the ranks Of those who have lost (All spiritual good). (S.III:85) (But no, by the Lord, They can have No (real) Faith, Until they make thee judge In all disputes between them, And find in their souls No resistance against Thy decisions, but accept Them with the fullest conviction. (S.IV:65) (We have sent down To thee the Book in truth, That thou mightest judge Between men, as guided By Allah (S.IV:105) (If any do fail to judge By (the light of) what Allah Hath revealed, they are (No better than) Unbelievers). (And if any fail to judge By (the light of) what Allah Hath revealed, they are (No better than) wrong‑doers). (To judge by (the light of) What Allah hath revealed, They are (no better than) Those who rebel). (S.V:47) (It is not fitting For a Believer, man or woman,??????????????????????????????????????????????????? When a matter has been decided By Allah and His Apostle,???????????????????????????????????? To have any option About their decision?????????????????????????????????????????????????????????????? If anyone disobeys Allah?????????????????????????????????? And His Apostle, he is indeed On a clearly wrong Path). (Trans: by Abdullah Yousuf Ali).

35. For the reasons aforesaid. I decree the suit only for the principal amount of Rs.1,90,000 (Rupees one lac ninety thousand) with no interest thereon. The plaintiff shall also be entitled to costs of the suit. M.B.A./I‑18/K?????? Suit decreed.