Due to the current global financial crisis there is increasing interest in the Islamic Economic System, the most comprehensive book on this topic is 'The Economic System of Islam' by Sheikh Taqiuddin an-Nabhani. However as people have many questions relating to the Islamic rules of trade we will be posting related extracts from the draft translation of the Fiqh masterpiece 'The Islamic Personality, Volume 2' by Sheikh Taqiuddin an-Nabhani
MORTGAGE/PLEDGING SECURITY (AR-RAHN)
The (rahn) pledge in the language is (thubut) the establishment and (dawam) continuity; and it is said that it is derived from (al-habs) the imprisonment.
كُلُّ امْرِئٍ بِمَا كَسَبَ رَهِينٌ
“Each person is a pledge over what he acquired (kasaba)” [TMQ 52: 21]
كُلُّ نَفْسٍ بِمَا كَسَبَتْ رَهِينَةٌ
“Each soul is a pledge over what he acquired (kasaba)” [TMQ 74: 38]
i.e. (muqayyada) restricted. The pledge in Shar’a is the property which is given as security for the debt so as to pay back/offfrom its price if it is unfeasible to receive it/restore it from the one upon whom it is due. It is permitted and considered from the transactions which the Shar’a permitted.
Its evidence is the Book and Sunnah.
وَإِنْ كُنْتُمْ عَلَى سَفَرٍ وَلَمْ تَجِدُوا كَاتِبًا فَرِهَانٌ مَقْبُوضَةٌ
“And if you are travelling and cannot find a writer (katib), then a possessed/received security in hand” [TMQ 2: 283].
Al-Bukhari narrated from Aisha, the mother of the believers, “that the Prophet (SAW) bought food from a Jew for a (deferred) period and pledged an iron coat of armour to him.”
And At-Tirmidhi narrated from ibn Abbas who said:
“The Prophet (SAW) died and his coat of armour was pledged for twenty (sa’a) (cubic measure) of food which he took for his family.”
And Al-Bukhari narrated from ibn Abbas who said:
“The Prophet (SAW) pledged a coat of armour of his in Madinah to a Jew and he took barley from him for his family.”
The security is permitted in travel and when resident because the words “and if you are travelling” is explaining a situational reality (waqi’at al-hal) and is not a restriction by the evidence “that the Prophet (SAW) bought food from a Jew to a (deferred) period and pledged him an iron coat of armour” while the Prophet was in Madinah and not travelling.
The pledge is not permitted except when delivered during the same contract “a received/possessed pledge”. The description of the possession (qabdh) in the pledge is that he has free hand over it, so that the one which is moveable is transported to him. As for what is immovable like houses and land, his hand is free access to control it i.e. its possession is by its pledger evacuating it to the pledgee without any obstacle before him. It is permitted to delegate in taking possession of the security so the delegate’s taking possession stands in his place in his taking possession and the rest of its rules. The pledge is permitted in all that is allowed to sell.
Everything permitted to sell is permitted to pledge because the objective of the pledge is to secure the debt by achieving its payment from the pledge’s price if it becomes impossible to repay it from the responsibility of the pledger. The pledge is not permitted in that which is not permitted to sell like alcohol, idols, land on trust (waqf), the pledged thing and similar things which are not permitted to be sold.