Objectives Resolution and Riba

Zia’s establishment of the Federal Shariat Court (FSC) and the Shariat Appellate Bench of the Supreme Court (SAB) provided another avenue for would-be Islamic reformers. Among its func- tions the FSC was granted extensive jurisdiction to entertain Shariat petitions brought by citizens of Pakistan or by federal or provincial governments challenging any law or provision of law as repugnant to the Holy Qur’an. Such powers were circumscribed as discussed above by Article 203-B of the 1985 Constitution. The SAB is the final court of appeal against FSC decisions.

Accordingly, several Shariat petitions were filed with the newly created FSC challenging provisions of various laws which sanctioned the payment of financial interest. The court as per Chief Justice Aftab Hussain dismissed such petitions on the grounds of lack of jurisdiction. In the Essa E.H. Jafar case, Aftab Hussain found that any law concerning interest was by definition a fiscal law and hence was excluded from the FSC’s jurisdiction by Article 203-B of the Constitution. This finding was upheld in several other cases as well. The exclusion of the FSC’s jurisdiction to deal with any fiscal law originally was set to expire within three years, that is by 25 June 1983. However, the time limit was extended three times by President Zia — first, to four years, then to five years, and finally to ten years. Therefore, the FSC was effectively banned from consideration of laws relevant to riba until 1990.

However, the doors to judicial review of laws countenancing riba were not permanently locked. The key was the Objectives Resolution. When Pakistan’s Constitution was restored in 1985, the Objectives Resolution, a preamble to the 1956, 1962, and 1973 constitutions, was made a substantive part of the document (Article 2-A). The Objectives Resolution originally had been adopted by Pakistan’s First Constituent Assembly in 1949 and is a declaratory statement that provides that Pakistan will be a state: “Wherein the Muslims should 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 Sunnah.

The judicial doctrine developed during 1987 by Dr Tanzil-ur- Rehman, then judge of the Sindh High Court, was that the Objectives Resolution formed the fundamental basis of Pakistan’s constitutional structure, its grund norm and consequently that it is supra-constitutional. Therefore, superior courts possess the jurisdiction to examine laws, even if protected by the constitution, on the grounds of violation of the principles of the Objectives Resolution unless the relevant court’s jurisdiction is specifically excluded from the consideration of a particular subject. That is, the FSC does not have jurisdiction to examine fiscal laws for repugnancy to the principles of Islam, but the high courts possess such jurisdiction through the vehicle of the Objectives Resolution.

On the basis of this line of reasoning, Justice Tanzil-ur-Rehman claimed standing for the Sindh High Court to consider three cases in which the validity of riba was challenged. In Bank of Oman vs. Bast Trading Co., he granted leave to appeal an impugned decision of a district court pertaining to bank interest on the grounds that the High Court had jurisdiction through Article 2-A to construe the existing laws in the light of the Holy Qur’an and Sunnah, as enshrined in the Constitution except that when a certain law falls within the exclusive jurisdiction of the FSC. The decision was clarified in the Irshad Khan case. In this case relief was granted to the petitioner against interest on a private note. In the course of the decision, Justice Tanzil-ur-Rehman presented a spirited argument supporting the position that riba of aAy kind is un-Islamic. Similarly, in Habib Bank vs. Muhammad Hussain Justice Rehman invoked Article 2-A to enable the High Court to examine the question of bank interest; and as before found that its collection was un-Islamic. However, unlike Irshad Khan, the court was bound by precedent, and hence, was unable to grant relief to the petitioner. In the Habib Bank case the petitioner had borrowed money from a commercial bank. As a consequence, the transaction was protected by Article 270-A of the Constitution as amended by the Eighth Amendment, the legal mechanisms that indemnified actions taken during the Martial Law of Ziaul Haq (1979-85). Earlier the Sindh High Court, in a full-bench decision, had ruled that Article 270-A was valid legislation and that it could not be challenged by Article 2-A. Similarly, in subsequent cases the Supreme Court found that Article 270-A was valid legislation.

Support for Justice Tanzil-ur-Rehman’s findings were subse- quently provided by two cases decided in the high courts. In Shahazuddin Chaudhry, Justice Khalilur Rehman Khan ruled that Article 2-A gave the courts the right to examine provisions of the Companies Act to ensure that “the affairs of the company are [not] being conducted in a manner prejudicial to the public interest.” Accordingly, he directed that the respondent, a private firm, disinvest from ventures that held a fixed rate of return, and reinvest in permissible forms of investment — shareholding or PLS. That is, he found that riba was not in the public interest. Similarly, Justice Wajihuddin Ahmad in Aijaz Haroon vs. Inam Durrani ruled that provisions in the Negotiable Instruments Act, 1881 that provided for fixed interest rates were un-Islamic; and that the courts in Pakistan are precluded from decreeing relief in any form whatever. Accordingly, he granted relief to the petitioner from paying a fixed rate of interest but creatively ruled that the petitioner should repay the lender an amount that would take into account the effects of currency inflation across the term of the loan.

As ingenious as such judicial activism is, the utilization of the Objectives Resolution doctrine is at best an imperfect tool to effect the goal of prohibiting the practice of riba in the state. The doctrine cannot be applied to challenge laws indemnified by Article 270-A; and an overwhelming majority of Pakistan’s High Court judges are opposed both to the application of the Objectives Resolution doctrine as well as to a total ban on riba ® Moreover, Justice Tanzil-ur-Rehman, the most active proponent of the doctrine, retired from the Sindh High Court on 15 June 1990.

Source: Islamization of Laws and Economy: Case Studies on Pakistan, Charles Kennedy. Republished with permission.