AR-RAHNUbh

7/27/2019 AR-RAHNUbh

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AR-RAHNU(PAWNING/MORTGAGE)

FIQH MUAMALAT II

MGA 3043

PREPARED BY: NURUL AINI MUHAMED

VS


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Points discussed in this topic

General characterization

Legality

Cornerstones and components

Forms of pawning Conditions of pawning

Legality and consequences

Termination of ar-Rahnu contract

Debtor creditor disputes


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Owner of

debt/Creditor-

need to

secure hismoney

Owner of

pawned

object-need

for money

Definition and General characterization

Ar-rahn in Arabic- to constancy, holding and

bindingness

Ar-rahn=pawning

Hanafiis- holding an item in lieu of a legal

right that may be satisfied from that

item

Shafiis-Taking a non-fungible property as

insurance against debt, whereby the

debt may extracted from the heldproperty if it is not repaid

Hanbaliis- A pawned object is a property

used as insurance for a debt, so that the

debt may be extracted from the property

if it is not possible to recollect from thedebtor

Malikiis- Pawning is the act of taking a

valued property from its owner, as a

mean of insuring a loan that has

matured or is about to mature---can be---animal, usufruct etc.

Pawning?

Rahn

Pawned

object?

Marhun

Debtor?

Raahin

Debt?

Murtahin

bih


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Legality

Quranic versus:

If you are on a journey and cannot find a scribe, then

use the receipt of pawned object (2:283)

Hadith narrated by Al-Bukhari

Muslims consensus on its permissibility


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Cornerstone and components

Components

Debtor (owner the pawning object)

Creditor (owner of the debt)

Pawned object

Debt

Cornerstones

Hanafiis- offer and acceptance

Non-Hanafiis- 4 cornerstones:

i) contract languageii) contracting parties

iii) pawned object

iv) underlying debt

Owner of

debt/Creditor-need to

secure his money

Owner of pawned

object-need for money


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Forms of pawning

Pawning originates together with the debt generating contract

ie: credit sale

Pawning originates after the debt is established

ie: the same as secured written document as

Pawning originates prior to the establishment of a debt-view pawning as insurance (Malikis & Hanafiis)

-pre-pawning not valid (Shafiis & most Hanbalis)


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Pawning conditions*

Contracting parties conditions

Eligibility: Hanafiis & Malikiis-as eligible for sale

Shafiis & Hanbali- as in the charity Cases i Guardian andplenipotentiarypawning childs or insane persons debt

of child's property debt of guardian

when the child reaches legalage

ii)Multiple transacting parties

Contract language condition

Hanafiis-contract neither be suspended because of conditions nor be deferred Shafiis- 3 types of conditions, valid conditions, nugatory ( no benefit) and conditions lead to

defective contract

Maliki-valid and defective

Hanbali-valid and defective

Underlying debt conditions Hanafii- 3 conditionspawning object must be binding as a liability on debt

-the creditor is eligible for pawned object to reimburse the debt-liability underlying a pawning contract must be known to all parties

* Based on Hanafi unless

specified


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Pawning conditions

Pawned Object Conditions

Eligibility for sale

Being a property

Being valued-valued for Muslim, the pork and alcohol thus cannot be used as object

Being known

Being owned

Not being attachedie: pawn a land must together with plan-house together with furniture---however pawning furniture alone

without the house is accepted

Being separate

Being clearly identified

Receipt of the pawned object

Specific consequence on pawning conditions


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Legal Status and consequences of pawning contract

Invalid pawning contract and defective contract

Hanafiis- contract is invalid if it has a major defect at the foundation of

the contract-such as on the components

-contract is defective if the defect comes from the

characteristic of the contract non-Hanafiis-no different between invalid and defective

Bindingness

Majority- after receipt of the pawning object

Maliki- by the conclusion of the offer and acceptance


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Consequences of pawning contract: 10 consequences

After the contract is completed and the creditor receives the pawned object

Association of the underlying contract- single or multiple contracts Hanafis- Depends on language, regardless of the level of pawned object

Malikiis-If pawning debtors were multiple or creditors were multiple, orboth-single contract is considered as multiple contract, unless the contractnames singles an individual from each party

The right to hold the pawned object

Demanding repayment

Safeguarding the pawned property


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The pawned objects expenses

Utilization of the pawned property-pawning debtor utilization

- pawning creditor utilization

Dealing in the pawned property-debtor dealing

-creditor dealing

Guaranteeing pawned property-creditors possession

-types of guarantee

- Consumption of pawnedproperty


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Selling pawned property-right to sell

-selling perishable pawned property

-priority claim of the creditor

-transfer of ownership to the creditor-3rd party settlement after sale

Delivery of pawned property

Ruling for defective pawned object


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Growth of pawned property

General-any increase comes from the pawned object belongs to the debtor

Level of the increase and implications:

Hanafiis- contiguous increases and separate growth in the pawned object-part of pawning

Hanafis, Malikis and Shafiisseparate non-derivative growth-belongs tothe debtor

Malikis- all contiguous and non-separable growth +all non-contiguousoffspring or product of the property- part of pawning

-any increase that are not part of the same form of the pawnedobjects -not regarded as pawning

Shafiis- contiguous growth, increase in size etc-part of pawning-identifiable growth (separate or non-separate) not part of pawning---belongs to the debtor

Hanbali- all increase - considered as part of pawned object and belong tothe creditor


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Growth of pawned property

Adding to the pawning or debt

-Pawning-Zufar

-Debt-2 opinions


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Pawning contract termination

Returning property to debtor

The underlying debt is fully repaid

The judge forces the debtor to sell the property or he sells with the debtors

reluctance-exception if the sales with the creditors permission

The creditor void the contract


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Debtor creditor disputes

Disputes over underlying debts

Destruction of the pawned property

Disputes over receipt

Dispute over receipt

Dispute over time of destruction

Dispute over the pawned property

Dispute over possession


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Practical side: Calculation of the fee on the

debtor

Kadar upahbulanan bagisetiap nilaianRM100

RM 0.60RM 0.85RM 0.95

Nilai Marhun

RM 1.00 - RM 400.00

RM 401.00 - RM 2,000.00

RM 2,001.00 keatas

Source: Ar-Rahn (2008)


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Wassalam

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