Financial Rights and How They Are Exercised and Transferred - Appendix B (The Shariah Basis for the Standard)

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1. Shari ’ah Standard No (42): Financial Rights and How They Are Exercised and Transferred Appendix (B) The Shari’ah Basis for the Standard ■ The basis for the recognition of financial rights is recognised jurisprudential evidences from the Qur`an, Sunnah, Ijma’ and Qiyas that indicate the right of ownership. ■ The basis for the rules governing rights to intangible assets is the Resolution of the International Islamic Fiqh Academy No. (43) 5/5 affirming, from established proofs, their existence and the rules governing them, which are the basis for the resolution. ■ The basis for the distinction between proprietary rights and personal rights is the view of contemporary jurists that Islamic jurisprudence has recognised this distinction in all matters that require such distinction.(2) ■ The basis for the recognition of rights, whether to tangible or intangible assets is the saying of the Prophet (peace be upon him): “No harm and no reciprocal harm” harm”.(3) ■ The basis for the right of Shuf ’a enjoyed by a partner or a neighbour is the practice of the Prophet (peace be upon him). Jabir Ibn Abdullah (may Allah be pleased with him) narrated: “Allah’s Messenger (peace be upon him) ruled in favor of the right of Shuf ’ah so long as the property is not divided” divided”.(4) Abu Salamah Ibn Abdul-Rahman narrated: “The Prophet (peace be upon him) ruled in favor of the right of Shuf ’ah in property that has not been divided among the partners. If boundaries have been assigned between them and the paths have been demarcated, then there is no right of Shuf ’ah” h”.(5) In the narration related by Muslim: “The Prophet (peace be upon him) ruled in favor of the right of Shuf ’ah in any undivided co-ownership, whether in a (2) See Mustafa Al-Zarqa: “Al-Madkhal Ila Nazariyyat Al-Iltizam”. Al-Iltizam” (3) The Hadith has been related by Malik in “Al-Muwatta`” (P. 464); “Musnad Ahmad” [1: 313], and “Sunan Ibn Majah” [2: 784]. (4) “Sahih Al-Bukhari” Al-Bukhari”,, (H: 2257). (5) “Al-Muwatta” “Al-Muwatta”,, (H: 1420). 1054
2. Shari ’ah Standard No (42): Financial Rights and How They Are Exercised and Transferred piece of land or an orchard. A co-owner is not allowed to sell his share unless permitted by the other co-owners. If the co-owner wants, he can buy it. If he wants, he can leave it. But if one co-owner sells it without permission of the other co-owners, then they have a greater right to it”. it” (6) Qatadah narrated that the Prophet (peace be upon him) said: “The neighbour of the house has a greater right to the house” house”.(7) These two Hadiths are reconciled by ascribing the last Hadith to a neighbour who is also a co-owner or shares easement rights. ■ The basis for the right to a share of water is Allah’s Statement in the Qur`an: {“Here is a she-camel: It has a right to drink (water), and you have a right to drink (water), (each) on a day, known”}. known”} (8) There is also Allah’s Statement in the Qur`an: “And inform them that the water is to be shared between them. Each one should drink in turn”.(9) In Shari’ah, it means a turn to utilise water for land or trees or crops. Related Shari’ah terms are the right of Shirb, which is specifically for watering crops and trees; the right of Shafah, which is specifically the right of humans and animals to drink as well as using water for purposes like ablution, bathing, etc.(10) There is a special set of rules for water in the Shari’ah based upon the statement of the Prophet (peace be upon him): “People share in three things: water, pasturage and fire” fire”.(11) ■ The basis for the right of Tahjir and the rights established by first use is the Sunnah. Ibn Qudamah states: “Anyone who carries out Tahjir of previously unappropriated land and begins to make it productive but did not complete it, he is more entitled to it than others, based upon the statement of the Prophet (peace be upon him): “Anyone who first uses what no other Muslim has previously used is more entitled to it” it”.. If he transfers it to someone else, then the second person is more entitled to it than others because the first owner of the right has granted it to him. If the owner of the right dies, it transfers to his heirs, based on the statement of the (6) “Sahih Muslim” (H: 1608). (7) “Sahih al-Bukhari” with “Fath Al-Bari” [12: 345]. (8) [Al-Shu’ara (The Poets): 155]. (9) [Al-Qamar (The Moon): 28]. (10) Al-Kasani, “Bada`i’ Al-Sana`i’” [6: 188-192]. (11) “Musnad Ahmad” [5: 364]. 1055
3. Shari ’ah Standard No (42): Financial Rights and How They Are Exercised and Transferred Prophet (peace be upon him): “The heirs of a deceased person inherit his estate”.. However, it is not permitted for the owner of a right of Tahjir to estate” sell it because his entitlement is confined to his personal use like the right of Shuf ’ah (preemption). [An alternative view is that] its sale could be considered valid because he is more entitled to it.(12) Al-Mardawi states: “Anyone carrying out Tahjir over previously unappropriated land will not own it…but he is more entitled to it than others, as well as his heirs after him and whomever he transfers it to, without any dispute. However, he cannot sell it, and this is the position of our School. It has also been said that he may sell it. Abu Khattab mentioned it as a possibility, and he referred to its permissibility as the correct position without any qualification in “Al-Muharrar” “Al-Muharrar”,, “Al-Ri’ayatayn” and “Al-Hawi Al-Saghir”. Al-Saghir” (13) ■ The basis for the prohibition of abusive exercise of rights is deduction from the Qur`an and Sunnah. There are many Verses in the Qur`an which indicate the obligation of justice, fairness and refraining from exercising one’s rights in a way that harms others. Allah commands: {“Show forgiveness, enjoin what is good, and turn away from the foolish”}. foolish”} (14) As for the Sunnah, we find the following Hadith: “May Allah bless the person who is lenient in selling and buying and when demanding his right”. right” ■ The basis for the invalidity of a condition stipulating that the seller retains ownership in a sale contract is that the transfer of ownership is a legal effect of the sale contract. Therefore, it is not permissible for a sale to take place without it. This has also been stressed in Resolution No. (51) 6/2 of the International Islamic Fiqh Academy held in Jeddah, which states: “The seller is not entitled to retain ownership of the sold item after the sale, but it is permissible for him to stipulate a condition on the buyer to retain possession of the item as security against deferred installments.” ■ The basis for the right of retention is the Qur`an and Sunnah. As for the Qur`an, it is stated by Allah: “And if you punish, then punish them with the like of that with which you were afflected. But if you endure patient(12) Ibn Qudamah, “Al-Kafi” [2: 394]. (13) Al-Mardawi, “Al-Insaf ” [6: 373 and 374]. (14) [Al-A’raf (The Heights):199]. 1056
4. Shari ’ah Standard No (42): Financial Rights and How They Are Exercised and Transferred ly, verily, it is better for those who are patient” patient”.(15) The Glorious Verse indicates the permissibility of reciprocal treatment. Based on this, it is permissible for a person to retain his property unless he receives his own rights from others. As for the Sunnah, it was narrated that the Prophet (peace be upon him) said: “The best amongst you is the one who is best in settlement of his obligations” obligations”.(16) ■ The basis for the impermissibility of taking consideration for sale or transfer of put or call options is Resolution No. (63) 7/1 of the International Islamic Fiqh Academy, which is based on recognised evidences. ■ The basis for the impermissibility of selling the abstract rights mentioned in item 10 is the lack of monetary value [according to Shari’ah] as well as the presence of Gharar (uncertainty)and Jahalah (ambiguity). (15) [Al-Nahal (The Bees): 126]. (16) “Sunan Al-Nasai”, Al-Nasai”, printed with Suyuti’s Commentary, (P. 318). 1057