Indexed OCR Text

Third party insurance
Question
Is third party insurance permissible? Essentially, it refers to a
responsibility which could be placed on a person in the future.
Insurance is taken out to fulfil that responsibility. For example, the
danger of someone suffering a loss because of you driving your vehicle
on a road. In such a case, the driver will have to pay a fine. An
insurance is taken out for this purpose. When an accident takes place,
and a fine has to be paid, the insurance company pays for it. This is
generally known as a third party insurance. In Western countries, if a
person did not clear the snow from the area in front of his house; and
someone slips, falls and hurts himself, a case is opened against the
home-owner and a heavy fine is imposed on him. To save themselves
from this danger, home-owners take out an insurance. This is also one
form of ta'mīn al-mas'ulīyyah in which the insurance company pays
the fine on behalf of its client. What is the ruling with regard to
insurance of this nature?
Answer
The 'ulama' differ on the issue of third party insurance. Some of them
say that it is unlawful. For example, Hadrat Muftī Taqī 'Uthmanī Sahib
says that every type of insurance is haram and unlawful because it
contains the elements of usury and gambling. Refer to Fatāwā 'Uthmānī,
vol. 3, p 328; Islam Aur Jadīd Ma'āshī Masā'il, vol. 7, p. 290; Islām Aur Jadīd
Ma'īshat Wa Tijarat, p. 161.
Other scholars are inclined to its permissibility.
Jadīd Fiqhī Mabahith:
If the driver was at fault for an accident and someone passes away in
it, then according to the Shari'ah, the driver is liable to pay blood
money for qatl-e-khata'. But how is he going to pay such an
astronomical amount? Islam instituted the concept of 'aqilah, i.e. his
family members joining in to pay the blood money. Nowadays, the
family tribal system no longer exists and, generally, the driver cannot
bear the entire burden. Modern society introduced a system of third
party insurance and provided much ease in doing so ... In reality, this
insurance is a form of assistance. It is another matter that certain
corrupt elements have been included into this system. Nonetheless,
since it is done to fulfil an inevitable civilizational need, we cannot say
that it is unlawful.
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... Third party motor insurance is an important and permissible type of
agreement of this age notwithstanding the corrupt elements which
have crept into it. The sin will be on those who run this system.1
Jadīd Fiqhī Masā'il:
It is my view that this type of insurance ought to be permissible in
every such society where a practical system of 'aqilah is not found.
There is no question of interest in this type of insurance because in the
event of an insurance client not meeting in an accident, he does not
receive any money. However, there is a danger that if he does meet in
an accident, he will have to pay from the monies which he deposited.
If an accident takes place, he will receive more than what it cost him.
But if we were to think about it, this level of danger is also found in the
'āqilah system, in the wala'-e-muwalat, and in other transactions. The
fact of the matter is that this type of insurance is similar to donations.
The person who pays the insurance premiums is presenting a donation
for people of a similar occupation. Sometimes, if he himself becomes
caught up in it, he receives assistance from those who are in a similar
occupation.2
The reality of this agreement is that there is no interest in it. The
insurance company does not pay any money to the client. Rather, it
fixes and repairs the vehicle of the other person. This will entail a
service recompense. Yes, it contains the element of gharar in the sense
that if the car does not meet in an accident, then one party has
certainly made payments while there is no certainty from the other
party. An answer to this is that this is a minor gharar which does not
lead to dispute. We learn from the texts of the jurists that minor
gharar can be accommodated in transactions; they do not invalidate
an agreement.
Observe some of the statements of the jurists on the issue of gharar.
An investigation into gharar
The scholars give various definitions for gharar. Observe the following:
‘Allāmah Sarakhsī rahimahullāh:
الغرر ما يكون مستور العاقبة. (المبسوط: ١٩٤/١٢، ادارة القرآن)
1 Jadīd Fiqhī Mabāhith, vol. 4, pp. 296-297, compiled by Qādī Mujāhidul Islām
Sāhib Qāsimī rahimahullāh.
2 Jadīd Fiqhī Masā'il, vol. 4, p. 120.
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‘Allāmah 'Aynī rahimahullah writes:
الغرر وبو فى الأصل الخطر، والخطر بو الذي لا يدرى أيكون أم لا، وقال
ابن عرفة: الغرر بو ما كان ظابره يغر وباطنه مجهول، قال والغرور ما رأيت له
ظابراً تحبه وباطن مكروه أو مجهول، وقال الأزبري: بيع الغرر ما يكون على
غير عهدة ولا ثقة، وقال صاحب المشارق: بيع الغرر بيع المخاطرة، وبو الجهل
بالثمن أو المثمن أو سلامته أو أجله. (عمدة القارى: ٤٣٥/٨، ملتان)
وقال في إكمال المعلم: فأما الغرر فما تردد بين السلامة والعطب أو ما في معنى
ذلك، وذلك أن يلحق بمعنى إضاعة المال، لأنه قد لا يحصل المبيع ويكون
بذل ماله باطلاً. (اكمال المعلم: ١٣٣/٥، باب بطلان بيع الحصاة والبيع الذى
فيه الغرر)
وقال ابن العربي فى القبس: فأما الغرر فهو كل أمر خفيت علانيته وانطوى
أمره. (القبس: ٧٩٢/٢)
وقال ملك العلماء: الغرر بو الخطر الذي استوى فيه طرف الوجود والعدم
بمنزلة الشك. (بدائع الصنائع: ١٦٣/٥، سعيد)
'Allāmah Kāsānī rahimahullah says that gharar refers to an uncertain
condition where existence and non-existence are equal. It is on the
level of a doubt.
There are many texts prohibiting gharar:
قال العلامة العيني: وقد وردت أحاديث كثيرة فى النهي عن بيع الغرر: منها:
رواه مسلم في صحيحه من حديث أبي بريرة رضي الله عنه قال: نهى رسول
الله صلى الله عليه وسلم عن بيع الحصاة، وعن بيع الغرر، وأخرجه الأربعة
أيضاً، ومنها: حديث ابن عمر رضي الله عنه رواه البيهقى من حديث نافع
عنه، قال : نهى رسول الله صلى الله عليه وسلم عن بيع الغرر. ومنها حديث
ابن عباس رضي الله عنه أخرجه ابن ماجة من حديث عطاء عنه قال: نهى
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رسول الله صلى الله عليه وسلم عن بيع الغرر، ومنها حديث أبي سعيد أخرجه
ابن ماجة أيضاً من حديث شهر بن حوشب عنه قال: نهى رسول الله صلى الله
عليه وسلم عن شراء ما في بطون الأنعام حتى تضع، وعما في ضروعها إلا
بكيل، وعن شراء العبد وبو آبق وعن شراء المغانم حتى تقسم وعن شراء
الصدقات حتى تقبض، وعن ضربة القانص. ومنها حديث على رضي الله عنه
أخرجه أبو داود وفيه: قد نهى النبي صلى الله عليه وسلم عن بيع المضطر وبيع
الغرر.ومنها: حديث ابن مسعود رضي الله عنه أخرجه أحمد عنه قال: قال
رسول الله صلى الله عليه وسلم: لا تشتروا السمك فى الماء فإنه غرر ومنها:
حديث عمران بن الحصين رضي الله عنه أخرجه ابن أبي عاصم في كتاب
البيوع: أن النبي صلى الله عليه وسلم نهى عن بيع ما في ضروع الماشية قبل
أن تحلب وعن بيع الجنين في بطون الأنعام، وعن بيع السمك فى الماء وعن
المضامين والملاقيح وحبل الحبلة وعن بيع الغرر. (عمدة القارى: ٤٣٦/٨، باب
بیع الغرر)
The gist and essence of the above texts is that Rasūlullah sallallahu
'alayhi wa sallam prohibited transactions in which there is gharar.
Before Islam, there were many transactions which were in vogue, but
Rasūlullah sallallahu 'alayhi wa sallam prohibited them on the basis of
gharar. For example:
بيع حبل الحبل، بيع المضامين، بيع الملاقيح، بيع الملامس، بيع المنابذه، بيع
الحصاة، بيع عسب الفحل، بيع الثمر قبل بدو صلاح، بيع السمك فى الماء
الكثير، بيع الطير فى الهواء، بيع اللبن فى الضرع، بيع ضربة القانص وغيرها من
البياعات التي تتضمن الغرر الفاحش المؤدي إلى النزاع المشكل بين العاقدين.
Generally, there are several reasons which cause gharar and
ignorance.
1. The existence of the item is not known with certainty, e.g. a
slave who has escaped.
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2. The existence of the item is known but its acquisition is not
certain, e.g. a bird flying in the air or a fish in water.
3. The very nature of the item is unknown.
4. The nature of the item is known but the type/category is
unknown.
5. The quantity is unknown and unspecified.
6. The continued existence of the item is uncertain, e.g. selling
fruit of a tree before it can flower.
7. The time-span in unknown.
Types of gharar
There are two types of gharar:
1. Gharar-e-kathīr, fahish (excessive or outrageous gharar).
2. Gharar-e-yasīr, qalīl, haqīr (slight, little or insignificant
gharar).
The rule of gharar
After reviewing the texts of the jurists and Hadith experts, we
conclude that every type of gharar is not an invalidator of a
transaction. Rather, excessive gharar is prohibited and an invalidator.
Slight gharar is overlooked.
Hadrat Shaykh Maulānā Muhammad Zakarīyyā rahimahullāh writes in
Aujaz al-Masālik:
وقال الباجي: بو ما كثر فيه الغرر، وغلب عليه حتى صار البيع يوصف ببيع
الغرر، فهذا الذي لا خلاف فى المنع من، وأما يسير الغرر، فإنه لا يؤثر في
فساد عقد بيع فإنه لا يكاد يخلو عقد منه. (اوجز المسالك، باب بيع الغرر،
٨٨/١٣، دمشق)
‘Allāmah 'Aynī rahimahullāh writes:
وروى الطبري عن ابن سيرين بإسناد صحيح، قال: لا أعلم ببيع الغرر بأساً،
وقال ابن بطال: لعله لم يبلغ النهي، وإلا فكل ما يمكن أن يوجد وأن لا
يوجد لم يصح وكذلك إذا كان لا يصح غالباً، فإن كان يصح غالباً كالثمرة في
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أول بدو صلاحها أو كان يسيراً تبعاً كالحمل مع الحامل جاز لقلة الغرر، ولعل
بذا بو الذي أراد ابن سيرين. (عمدة القارى، باب بيع الغرر وحبل الحبلة:
٤٣٨/٨، ملتان)
جمهرة القواعد الفقهية:
وبذا النهى الوارد منصب على الغرر الكثير الفاحش إذ اليسير من معفو عنه
باتفاق العلماء، إذ بو من قبيل ما لا يستطاع الاحتراز من فى المعاملات،
فهناك نصوص فقهية كثيرة تطرقت إلى بذا المفهوم. (جمهرة القواعد الفقهية:
٣٠٩/١)
زاد المعاد:
ليس كل غرر سبباً للتحريم، والغرر إذا كان يسيراً أو لا يمكن الاحتراز منه
لم يكن مانعاً من صحة العقد. (زاد المعاد: ٨٢٠/٥، بيع المغيبات)
الموفقات:
أصل البيع ضروري، ومنع الغرر والجهالة مكمل، فلو اشترط نفي الغرر جملة
لا نحسم باب البيع. (الموفقات: ٧/٢، كتاب المقاصد، المسألة الثالثة، دار
الفكر)
وقال الإمام النووي في شرح مسلم: أجمع المسلمون على جواز أشياء فيها غرر
حقير. (شرح مسلم: ٢/٢، كتاب البيوع)
تكملة فتح الملهم:
فأما الغرر بمعنى جهالة المبيع فربما يحتمل إذا كان يسيراً دعت الحاجة إليه،
ولم يكن مفضياً إلى المنازعة فى العرف، قال العبد الضعيف عفا الله عنه:
ويخرج على بذا كثير من المسائل في عصرنا، فقد جرت العادة في بعض الفنادق
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الكبيرة أنهم يضعون أنواعاً من الأطعمة في قدور كبيرة، ويخيرون المشتري في
أكل ما شاء بقدر ما شاء، ويأخذون ثمناً واحداً معيناً من كل أحد، فالقياس
أن لا يجوز البيع لجهالة الأطعمة المبيعة وقدربا، ولكنه يجوز لأن الجهالة يسيرة
غير مفضية إلى النزاع، وقد جرى بها العرف والتعامل. (تكملة فتح الملهم:
٣٢٠/١. وكذا فى جمهرة القواعد الفقهية: ٣٢٠/١)
اكمال المعلم:
ولما رأينابم أجمعوا على جواز المسائل التي عددنايا، قلنا: ليس ذلك إلا لأن
الغرر فيها نزر يسير غير مقصود، وتدعو الضرورة إلى العفو عنه. (اكمال
المعلم شرح صحيح مسلم للقاضى عياض، باب بطلان بيع الحصاة والبيع
الذى فيه غرر، ١٣٤/٥، دار الوفاء)
Jadīd Fiqhī Masā'il:
The circle of gharar is quite extensive. This is why the jurists specified
different levels for it. Excessive gharar prohibits the permissibility of a
transaction while a slight gharar does not.1
In short, bearing in mind the differences of opinion of the 'ulama' on
this issue, a person should abstain from every type of insurance.
Allāh ta'ālā knows best.
The AA (Automobile Association)
Question
We have the AA in our country. If your car breaks down, it takes the
responsibility of towing it and repairing it. In exchange, you have to
pay an annual amount. Is this permissible? Will this company be
referred to as an ajīr-e-khās or ajīr-e-mushtarak? Similarly, there is
another company for the security of one's vehicle. If it gets stolen, it
tracks the location of the vehicle. Here too, a person has to pay a
monthly fee. Is this permissible?
1 Jadīd Fiqhī Masā'il, vol. 4, p. 209.
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Answer
This transaction is permitted because a person receives a service in
exchange for a payment. Nonetheless, one objection to it is that it may
well be that the car never needs to be towed or repaired. Will the
company still be eligible for the monthly or annual payments? If the
company is classified as an ajīr-e-khās, it will be eligible for payment.
However, since it also accepts work from other people, it ought to be
classified as an ajīr-e-mushtarak.
The answer to this objection is that companies of this nature are
neither ajīr-e-khas nor ajīr-e-mushtarak. Rather, they fall between the
two. If you look at them as ajir-e-khas, they will be eligible for
payment. They will also be classified as ajir-e-mushtarak because of
their accepting work from other people.
والحاصل أن المسائل فى الظئر تعارضت فمنها ما يدل على أنها في معنى أجير
الوحد كقولهم لعدم الضمان فى بذه، ومنها ما يدل على أنها في معنى المشترك
كقولهم إنها تستحق الأجر على الفريقين إذا أجرت نفسها لهما، قال الاتقاني:
والصحيح أنه إن دفع الولد إليها لترضعه فهي أجير مشترك وإن حملها إلى
منزله فهي أجير وحد وقال فى العناية: وذكر فى الذخيرة ما يدل على أنها يجوز
أن تكون خاصاً ومشتركاً حتى لو أجرت نفسها لغيره استحقت الأجر على
الفريقين كاملاً عملاً بشبه الأجير المشترك وتأثم نظراً إلى أن لها شبهاً
بالأجير الخاص. (فتح المعين: ٢٥٤/٣، وكذا فى فتاوى الشامى: ٧١/٦، سعيد)
أقول: ويرتفع الإثم إذا كان الإذن بالعمل للغير.
Allāh ta'ālā knows best.
Taking out an insurance
Question
A transport company transports goods at a specified price, e.g. R50. It
offers insurance for the transported goods at an additional charge of
ten percent. This transport company is probably taking out the
insurance with some other company. The goods which it is
transporting are expensive items such as laptops, computers, etc. Is
insurance of this nature permissible?
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Answer
Insurance contains two elements which are haram - gambling and
usury - and that is why it is also haram. It is therefore impermissible
for the person who is having the goods transported to take out the
insurance. This is irrespective of whether the transport company does
the insurance itself or gives it to an insurance company. In this case, it
is as though the transport company is an agent acting on behalf of the
one who ordered the goods to be transported. The actual agreement is
between him and the insurance company. It is therefore necessary to
abstain from such a transaction.
لا خلاف بين أبل العلم في تحريم القمار وإن المخاطرة من القمار قال ابن
عباس رضي الله عنه: إن المخاطرة قمار وإن أبل الجابلية كانوا يخاطرون على
المال والزوجة وقد كان ذلك مباحاً إلى أن ورد تحريمه. (احكام القرآن: ٣٢٩/١،
باب تحريم الميسر، وكذا فى احكام القرآن للتهانوى: ٣٩٣/١)
رد المحتار:
وسمى القمار قماراً لأن كل واحد من المقامرين ممن يجوز أن يذبيب ماله إلى
صاحبه، ويجوز أن يستفيد مال صاحبه، وبو حرام بالنص. (رد المحتار: ٤٠٣/٦،
كتاب الحظر والا باحة، سعيد)
الربا بو فضل خال عن عوض بمعيار شرعى شرط لأحد المتعاقدين فى
المعاوضة. (فتاوى الشامى: ١٦٨/٥، سعيد)
Fatāwā Mahmūdīyyah:
Insurance contains the elements of gambling and usury - both of
which are harām. Insurance is also prohibited.1
Yes, medical aid is permissible because cash money is deposited, and
the person does not receive money in return. Rather, he receives
medical treatment. In the above case, the person receives money in
exchange for money.
Allāh ta'ālā knows best.
1 Fatāwā Mahmūdīyyah, vol. 16, p. 387.
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Becoming an insurance agent
Question
Zayd is an insurance agent working for several companies which offer
long-term and short-term insurance. Obviously, these companies pay
him a commission for securing clients for them. Most insurance
companies are immersed in usurious transactions. Will it then be
permissible to become such an agent? What is the ruling with regard
to accepting the commission?
Answer
Nowadays, the business of most insurance companies comprises of
gambling and usury. It is therefore not permissible to have an agency
for them. The commission which is received by them is also unlawful.
One ought to safeguard one's self from it. Yes, there is room to join
companies whose major business is halal.
أَحَلَّ اللهُ الْبَيْعَ وَحَرَّمَ الرِّبًا.
Allāh permits trade and prohibits usury.1
يَأَيُّهَا الَّذِيْنَ أُمَنُوا اتَّقُوا اللهَ وَذَرُوْا مَا بَقِيَ مِنَ الرِّبُوا إِنْ كُنْتُمْ
مُؤْمِنِيْنَ. فَإِنْ لَّمْ تَفْعَلُوْا فَأَذَنُوْا بِحَرْبٍ مِّنَ اللهِ وَرَسُوْلِهِ.
O believers! Fear Allah and forsake whatever usury
that is outstanding if you have conviction in the
order of Allah. If you do not desist, prepare to fight
Allah and His Messenger.2
وَلَا تَعَاوَنُوْا عَلَى الْإِثْمِ وَالْعُدْوَانِ.
Do not help each other in sin and transgression.3
1 Sūrah al-Baqarah, 2: 275.
2 Sūrah al-Baqarah, 2: 278.
3 Sūrah al-Mā'idah, 5: 2. Jadīd Mu'āmalāt Ke Sharī Ahkām, vol. 1, p. 82.
508

عن جابر رضي الله عنه قال: لعن رسول الله صلى الله عليه
وسلم: آكل الربا وموکله، الخ. (رواه مسلم: ٢٨/٢، باب الربا،
قدیمی)
Rasūlullāh sallallahu 'alayhi wa sallam cursed the
devourer of usury, the one who appoints another
over it ...
Jadīd Fiqhī Masā'il:
Essentially, insurance contains the elements of usury and gambling. It
is therefore unlawful for a Muslim to become an insurance agent and
to make it a source of income.1
Allāh ta'ālā knows best.
Insurance for a medical practitioner
Question
Is it permissible for a medical practitioner to take out a medical
insurance? This means that he takes out an insurance so that if he
commits an error in the course of a treatment, operation, etc. and a
patient suffers loss on account of it, then the insurance company will
pay for damages on his behalf. A Muslim will consider benefit and loss
to be a divine decree and may not make any claims against a doctor,
but a non-Muslim who does not believe in predestination will sue for
damages and demand astronomical amounts of money. Is it
permissible for a medical practitioner to take out an insurance to save
himself from such a situation?
Answer
Generally, in an insurance of this nature, a person receives money in
exchange for money. An insurance company even pays out more. This
is clear-cut usury which is haram. It is therefore necessary for a
Muslim, on the basis that he is a Muslim, to abstain from insurance of
this nature. Yes, if the insurance company does not pay out money,
and instead, gets the patient who suffered a loss admitted into a better
equipped hospital where he will be treated by more proficient medical
practitioners, then there will be leeway for this.
Allāh ta ālā knows best.
1 Jadīd Fiqhī Masā'il, vol. 1, p. 438; Ap Ke Masā'il Aur Oen Kā Hull, vol. 6, p. 258.
509

Provident funds
Question
A certain percentage is deducted monthly from the salaries of
government employees. It is done by force; employees have no choice
in the matter. When the term of employment comes to an end, the
money together with an additional amount is paid out to the
employee. Is it permissible to accept this money and to use it for one's
self?
Answer
It is permissible to accept and use monies which are received from a
provident fund at the end of one's employment. The amount which
the government deducts from the monthly salary is a right; it does not
come into the employee's ownership. Therefore, the interest which
the government pays out for it is not really interest. Interest refers to
a preconditioned amount from one's own wealth. Whereas here, the
amount is not owned by the employee.
Kifāyatul Muftī:
The amount which is given by the government departments in the
name of a provident fund and other amounts which are added to it in
the name of interest - all these amounts are lawful. The added amount
is not classified as interest by the Shari'ah even though the
department may classify it as such.1
Fatāwā 'Uthmānī:
The additional amount which is paid out in a mandatory provident
fund is not classified as interest by the Shari'ah. It is therefore
permissible to accept it.2
Fatāwā Mahmūdīyyah:
This system has been initiated by the government for the wellbeing of
its employees. As long as an employee does not take possession of it, it
does not belong to him. Therefore, whatever additional amount he
receives will not be interest.3
1 Kifāyatul Muftī, vol. 8, p. 97.
2 Fatāwā 'Uthmānī, vol. 3, p. 307.
3 Fatāwā Mahmūdīyyah, vol. 16, p. 394.
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Jadīd Mu'āmalāt Ke Shar'ī Ahkām:
The government deducts a certain amount monthly from the salaries
of its employees. This is done by force. It is referred to as a GP Fund.
When the employee retires, he receives the entire amount. If he passes
away, it is paid out to his heirs. He also receives an additional amount
which is referred to as interest. What is the Shari' ah ruling with regard
to the additional amount? The answer is that it is not interest
according to the Shari'ah because an interest transaction is agreed
upon between two persons when there is wealth on both sides and it is
owned by them. In this case, the amount which is deducted from the
employee's salary does not belong to him. For it to be included in his
possession, it has to be given over to him, and he must have control
over it.
قال العلامة ابن نجيم: قوله بل بالتعجيل أو بشرط أو بالاستيفاء أو بالتمكن
أى لا يملك الأجرة إلا بواحد من بذه الأربعة. (البحر الرائق: ٣٠٠/٧)
Because the employee or his representative did not take possession of
it, he is not its owner. He will not exercise his rights over it. Now
whether the government gives the original amount, an additional
amount, or an additional amount in the name of interest - all will be
classified as a part of his salary which the government collected and
whose payment it deferred. Hadrat Muftī Shafi Sahib rahimahullah
writes: "The amount which is received as interest on a provident fund
is not interest according to the Shari'ah. Rather, it is a part of the
salary."1
Āp Ke Masā'il:
It is permissible to accept the additional amount which is given by the
government in a provident fund.2
Further reading: Muntakhabāt Nizām al-Fatāwā, vol. 1, p. 208; Ahsan al-
Fatāwā, vol. 7, p. 50; Jadīd Fiqhī Masā'il, vol. 1, p. 249; Jadīd Fiqhī Mabāhith,
vol. 6, p. 290; Provident Fund Parr Zakāt Aur Sūd Kā Mas'alah of Hadrat
Muftī Muhammad Shafi Sāhib.
Allāh ta'ālā knows best.
1 Jadīd Mu'āmalāt Ke Shar'ī Ahkām, vol. 1, p. 169.
2 Āp Ke Masā'il Aur Oen Kā Hull, vol. 6, p. 212.
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Voluntary provident fund
Question
A person is employed by a company and he receives a salary of R2000.
R200 is deducted from his salary every month. This deduction is
approved by him. The company adds R100 from its side. When his
employment terminates, he receives the full amount which was
accumulated over the years. Is it permissible for him to accept it?
Answer
Many scholars have issued the same verdict for both types of
provident funds [mandatory and voluntary]. However, where it is
deducted voluntarily, we find a similarity with usury. A person should
abstain from it so that it does not become a means of devouring usury.
Hadrat Muftī Muhammad Shafī' Sahib rahimahullah writes:
When an amount is deducted voluntarily from a provident fund, it
contains a resemblance with usury. There is the danger of making it a
means to earn interest. One should therefore desist from it.1
Jadīd Mu āmalāt Ke Shar ī Ahkām:
If an employee has an amount voluntarily deducted from a GP Fund
and then, upon the termination of his employment, receives the
accumulated contributions with an added interest amount, then the
Shari'ah ruling is that the original amounts are halal. The additional
amounts which he receives from the government in the name of
interest contain the element of resemblance with usury. It has the
danger of becoming a means to accept usury in the future. A person
should therefore desist from it.2
Fatāwā 'Uthmānī:
The same rule applies to voluntary and mandatory provident funds.
However, the additional amounts which he will receive for his
voluntary contributions must be given in charity as a precaution.3
Some 'ulama' classify the additional amount as usury and say that it is
harām.
1 Provident Fund Parr Zakāt Aur Sūd Kā Mas'alah, p. 4.
2 Jadīd Mu'āmalāt Ke Sharī Ahkām, vol. 1, p. 170.
3 Fatāwā 'Uthmānī, vol. 3, p. 308.
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Āp Ke Masā'il:
If an employee volunteers to have an amount deducted, it is not
permissible for him to accept the additional amount; it is usury.1
Allāh ta'ālā knows best.
Pension fund
Question
Governmental employees receive a pension at the end of their
employment. They are paid a lump sum of half their monthly salaries
multiplied by the number of months they worked. Is it permissible to
accept this amount?
Answer
A pension from the government is solely a gift and a type of assistance.
It is permissible to accept it.
Hadrat Muftī Kifāyatullah Sāhib rahimahullāh writes:
The pension which an employee receives at the termination of his
employment is permissible.2
Fatāwā Mahmūdīyyah:
When a person's employment comes to an end, some courts and
departments pay a pension as a recompense for his good services. It
cannot be referred to as interest.3
Āp Ke Masā'il:
A pension is a sort of gift. The agreement between a pensioner and the
government is valid; it does not entail gambling and usury.4
Allāh ta'ālā knows best.
1 Āp Ke Masā'il Aur Oen Kā Hull, vol. 6, p. 225; Imdād al-Ahkām, vol. 3, p. 472;
Fatāwā Haqqānīyyah, vol. 6, p. 213.
2 Kifāyatul Muftī, vol. 8, p. 97.
3 Fatāwā Mahmūdīyyah, vol. 16, p. 394.
4 Ap Ke Masā'il Aur Oen Kā Hull, vol. 8, p. 294.
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Retirement policy
Question
While a person was alive, he voluntarily took out a life insurance and
retirement policy in favour of his wife. Now that he has passed away,
the insurance company will pay a large amount to his wife. She will
also receive a monthly pension. Is this permissible?
Answer
A life insurance and retirement policy contract in which a person
receives cash in exchange for cash, plus an additional amount is a
usurious contract, and unlawful. It is necessary and essential to desist
from it. Nonetheless, if a person entered into such a contract
mistakenly, out of ignorance or due to sinning and immorality, then
whatever amount which is over and above his actual contribution
must be given in charity without the intention of reward. The amounts
which he had contributed will be distributed among all the deceased's
Shar'ī heirs. As for a company's monthly pension, it is classified as a
donation and it can be accepted.
Jadīd Ma'āshī Masā'il:
There are three factors which make life insurance haram:
1. The person receives an amount which is over and above his
contributions. It is given as interest. It is therefore classified as
interest.
2.
Insurance - in its outer form - is gambling. Take the case of a
person who wants the insurance: When will he pass away?
How much additional money will he receive? If the monthly
contribution is stopped due to some reason, the previous
contributions are sequestered. All this relates to the principle
of ta'līq al-milk 'ala al-khatar (placing one's wealth in danger)
which the Shari'ah classifies as gambling.
3.
Man's life and body parts cannot have a value attached to
them. And there is no recompense for something which is not
given a value. Assuming a value were to be attached, it is not a
recompense but a bribe in appearance. And bribery is also
haram and the person is punishable for it.
Based on these reasons, life insurance is absolutely haram. There is no
basis whatsoever for its permissibility in the Shari'ah.
Jadīd Ma'āshī Masā'il, p. 93 as quoted from Imdād al-Fatāwā, vol. 3, p. 161;
Fatāwā Rahīmīyyah, vol. 2, p. 200; Fatāwā Mahmūdīyyah, vol. 6, p. 308;
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Kifāyatul Muftī, vol. 8, p. 76; Āp Ke Masā'il Aur Oen Kā Hull, vol. 6, p. 255;
Jadīd Fiqhī Masā'il, vol. 1, p. 260; Nizam al-Fatāwā, vol. 1, p. 192.
Majmū ah Qawānīn Islāmī:
If a person enters into a contract in favour of another person for a
provident fund, life insurance, co-operative society, etc. then the
person in whose favour it was written - whether an heir or not - is
neither a legatee nor a donee. He will merely be a trustee. Therefore,
the monies which accumulated and were deducted will be distributed
among his Shar'ī heirs as per the shares laid down by the Shari'ah. It
will be necessary to give the interest to the poor without an intention
for reward. In the same way, if the contractor's life or wealth is
destroyed and he receives a payment in return, it will be divided
among his heirs as laid down by the Shari'ah.1
Allāh ta'ālā knows best.
Education policy
Question
A person took out an insurance in favour of his daughter. The
insurance company receives a monthly payment. When she reaches
the age of twenty-five, she will receive a large amount of money from
the insurance company. Will it be permissible to accept this amount to
pay for education fees, etc .?
Answer
In an educational insurance, the person receives money in exchange
for money. This is an interest transaction. It is unlawful. One may only
accept and use the amounts which were contributed by the person.
The additional amount is interest which has to be given in charity
without the intention of reward.
Allāh ta'ālā knows best.
Mutual fund
Question
Fifty women get together and give two hundred rupees each to one of
the women whom they appoint as their treasurer. They draw a lot at
the end of each month, and the woman whose name comes out
1 Majmū ah Qawānīn Islāmī, compiled by Qādī Mujāhidul Islām Sāhib Qāsimī, p.
255, register number 10.
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receives the entire amount. The next month another woman receives
it. Each woman gets a turn; no one is deprived. There is also no
interest in it. Rather, they only receive how much they paid in. Is this
arrangement permissible?
Answer
Not only is it permissible, it is recommended. It is like giving a loan to
each other and providing financial assistance. The woman whose
name was drawn first is as though she received a loan from the other
women and they assisted her. There are many virtues for mutual
assistance as mentioned in the Qur'an and Hadith. Some of them are:
قال الله تعالى: وتعاونوا على البر والتقوى. (سورة المائدة، الآية: ٢)
قال الإمام القرطبي: وبوأمر لجميع الخلق بالتعاون إلى البر والتقوى؛ أى ليُعِن
بعضكم بعضاً .. وقال الماوردي: ندب الله سبحانه وتعالى إلى التعاون بالبر
وقرنه بالتقوى لم؛ لأن فى التقوى رضا الله تعالى، وفى البر رضا الناس، ومن
جمع بين رضا الله تعالى ورضا الناس فقد تمت سعادته وعمت نعمته، ...
والتعاون على البر والتقوى يكون بوجوه؛ فواجب على العالم أن يعين الناس
بعلمه فعيلمهم، ويعينهم الغنى بماله، والشجاع بشجاعته في سبيل الله، وأن
يكون المسلمون متظابرين كاليد الواحد: المؤمنون تتكافأ دماؤيم ويسعى
بذمتهم أدنابم وبم يدعلى من سوابم. (الجامع لأحكام القرآن: ٣٣/٦)
وقال ابن كثير: يأمر تعالى عباده المؤمنين بالمعاونة على فعل الخيرات وہو البر
وترك المنكرات وبو التقوى ... عن أنس رضي الله عنه قال: قال رسول الله
صلى الله عليه وسلم: انصر أخاك ظالماً أو مظلوماً. قيل: يا رسول الله بذا
نصرته مظلوماً، فكيف انصره ظالماً؟ قال: تمنعه من الظلم فذاك نصرک إياه.
(تفسير ابن كثير: ٧/٢)
Hadrat Muftī Muhammad Shafi Sahib rahimahullah writes:
The Qur'an passes a judicious judgement on a basic and fundamental
issue which is the soul of the entire world, and on which depends not
only its entire success and wellness, but even its life and existence. It is
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the issue of mutual assistance and helping each other. The entire
system of this world rests on mutual assistance. If one human does not
help another, then a person - no matter how intelligent, powerful or
wealthy he may be - will not be able to acquire his life's needs single-
handedly.1
قال الله تعالى: وافعلوا الخير لعلكم تفلحون.
عَنِ ابْنِ عُمَرَ رَضِيَ اللهُ عَنْهُ أَنَّ رَسُوْلَ اللهِ صَلَّى اللهُ عَلَيْهِ
وَسَلَّمَ قَالَ: الْمُسْلِمُ أَخُو الْمُسْلِمِ، لَا يَظْلِمُهُ وَلَا يُسْلِمُهُ، مَنْ
كَانَ فِيْ حَاجَةٍ أَخِيْهِ كَانَ اللهُ فِيْ حَاجَتِهِ، وَمَنْ فَرَّجَ عَنْ
مُسْلِمٍ كُرْبَةً فَرَّجَ اللهُ عَنْهُ كُرْبَةً مِنْ كُرَبِ يَوْمِ الْقِيَامَةِ، وَمَنْ
سَتَرَ مُسْلِمًا سَتَرَهُ اللهُ يَوْمَ الْقِيَامَةِ."
Hadrat Ibn 'Umar radiyallahu 'anhu narrates that
Rasūlullah sallallahu 'alayhi wa sallam said: "A
Muslim is a brother of another Muslim. He neither
wrongs him nor hands him over to the enemy.
Whoever fulfils the need of a Muslim, Allah ta'ālā
will fulfil his need. Whoever removes a difficulty
from a Muslim, Allah ta'ala will remove from him
one of the difficulties of the day of Resurrection.
Whoever conceals [the fault of] a Muslim, Allah
ta'ala will conceal his fault on the day of
Resurrection."
وعن أبي بريرة رضي الله عنه عن النبي صلى الله عليه وسلم
قال: من نفس عن مؤمن كربة من كرب الدنيا، نفس الله
عنه كربة من کرب يوم القيامة، ومن يسر على معسر يسر
الله عليه فى الدنيا والآخرة، ومن ستر مسلماً ستره الله فى
الدنيا والآخرة، والله في عون العبد ما كان العبد في عون
1 Ma'ārif al-Qur'ān, vol. 3, p. 20.
2 البخاري: ٢٤٤٢. مسلم: ٢٥٨٠، واللفظ له.
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أخير. (رياض الصالحين: ٦٠٥/١، باب قضاء حوائج المسلمين،
دار السلام)
Rasūlullah sallallahu 'alayhi wa sallam said: "The
one who removes from a believer one of the
difficulties of this world, Allah ta'ala shall remove
from him one of the difficulties on the day of
Resurrection. Allah ta'ālā shall bring ease in this
world and in the Hereafter to the one who brings
ease to a person in hardship. Allah shall conceal the
faults of a person in this world and the Hereafter if
he conceals the faults of a Muslim. Allah helps a
person as long as he is occupied in helping his
brother."
Kitab al-Fatāwā:
A few people get together and contribute a pre-determined amount.
They draw a lot and the person whose name comes out receives the
entire amount. In this way, they take turns to receive the full amount.
For example, ten people contribute ten thousand monthly. One of the
participants receives the full amount of 100 000 each month. It is
permissible to do this. It is akin to giving a loan to each other. In other
words, the one whose name appears first is as though nine of his
companions gave him a loan of ninety thousand. This system is not
only permissible but recommended. Through it, people can become
self-reliant.1
Allāh ta'ālā knows best.
1 Kitab al-Fatāwā, vol. 5, p. 343.
518