The Ruling on Dealing in Sales and Purchases Through the Method of Tawarruq
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His Eminence the Shaykh: Peace be upon you, and Allah’s mercy and blessings, a man passed away while he was dealing in debt in the following manner: The borrower would come to him and request a specific amount. He would then go to the shop owner and buy a number of bags of rice, sugar, coffee, or the like, for the amount agreed upon between the lender and the borrower. Then the lender would sell them to the borrower for a deferred amount exceeding their current value. Then the shop owner would buy them back from the borrower at a specific loss, handing him the amount. This was done with the goods remaining in their place without being moved. His sons advised him many times, but he would reply that people have been dealing in this way since we came of age, and no scholar has denied it to them.As for the virtue of the Shaykh: 'Abd al-Rahman al-Sa'di (may Allah have mercy on him) saw and heard of this method and did not deny it. After strong insistence from his sons, this man abandoned this type of lending and turned to lending through cars, where he would buy a group of cars and leave them in a car showroom. The borrower would buy the car for a deferred price, and he would actually take possession of the car and drive it out of the showroom.Question: Is the first method permissible, and is the second method permissible? If one of the methods or both are not permissible, what is the method that clears the deceased’s conscience? Does abandoning the first method count as repentance from the deceased—since repentance wipes out what came before—or is it obligatory for the heirs to dispose of what exceeded the principal? Are the profits returned to their owners, or what is done with them? And if they are usurious funds that have mixed with other funds, since he deals in dates and shares in companies, what is the solution for such a case?
I say: And upon you be peace, and Allah’s mercy and blessings.And I say: It is not prescribed for a person to offer the greeting when asking a question while present in the assembly. The greeting is for the one who arrives, who comes before people or meets people and greets them. As for in the assembly, the Companions would have one of them stand up and ask the Messenger of Allah (peace and blessings be upon him) without offering the greeting.
And as for this long and broad question, its summary is: That this man was dealing in lending, and he had two paths. The first path: A person in need would come to this man, and he would go to a person who had many bags of rice or other things, or raw materials or other things they were accustomed to. This merchant would buy this merchandise from the shop owner, let us say for ten thousand riyals.Then he counts them: One, two, three, four,And he says: This is the taking of possession. Then he would sell it to this person in need for twelve thousand or thirteen thousand, depending on the length of the deferral period and the condition of the person in need. If he was poor, the charge on him would be more, and if he was not poor, it would be less.I say: This method is forbidden, and there is no doubt in it;Because: First: It contains a stratagem to circumvent usury.
And secondly: The goods were sold while they were in their place, and counting is not taking of possession in any way! Where is the taking of possession? The Prophet (peace and blessings be upon him) forbade selling goods where they are bought until the merchants take them to their dwellings.
As for the second method: And that he had cars; if someone needed one, they would come and take a car from him, then buy it and sell it to another. This is a matter called the matter of tawarruq, and the scholars differ on it. Imam Ahmad ibn Hanbal (may Allah have mercy on him) has two narrations regarding it: a narration permitting it and a narration forbidding it. Shaykh al-Islam Ibn Taymiyyah (may Allah have mercy on him) chose the narration forbidding it.And he said: That this is forbidden and it is a stratagem; because the buyer has no purpose for the car, his purpose is for the money he sells it for. So it is a stratagem, and stratagems do not make the forbidden lawful, but rather they add ugliness to its ugliness.
As for this usury that he acquired through this first and second method, it is forbidden without doubt.But according to what the questioner said: That people used to do this and it was not denied to them.And he said: That among those who did not deny it to them was Shaykh 'Abd al-Rahman ibn Sa'di (may Allah have mercy on him). So this man’s action was based on ta'wil (interpretation), thinking it was permissible based on the approval of these scholars. And if Allah knows from his intention that he did it based on ta'wil, then there is no blame on him, and no sin on him.But I tell you: The method that was in the time of Shaykh 'Abd al-Rahman ibn Sa'di (may Allah have mercy on him) is not like the method mentioned in this question.
The method is that a person borrows for him one or two or three units of raw material or other, then the debtor takes it and it is put up for sale in the market: Who will buy this? Who will buy this? So the goods are not sold in their place, and there is no stratagem for large amounts of money that people take without need. A poor person in need comes for ten riyals or fifteen riyals and buys this unit from the merchant, then he takes it and gives it to the broker to put it up for sale, saying: Who will buy this?I heard them when I was young saying: Who will buy the debtor’s money.
And like this is the matter of tawarruq on which the scholars differ, and Shaykh 'Abd al-Rahman ibn Sa'di considers tawarruq permissible, but it is not like the sale of people mentioned in the question.In any case: The heirs have nothing upon them, if Allah wills. And they should increase in seeking forgiveness for their deceased, and call upon Allah to turn to him in repentance. The money in their hands is theirs.
I say: And upon you be peace, and Allah’s mercy and blessings.And I say: It is not prescribed for a person to offer the greeting when asking a question while present in the assembly. The greeting is for the one who arrives, who comes before people or meets people and greets them. As for in the assembly, the Companions would have one of them stand up and ask the Messenger of Allah (peace and blessings be upon him) without offering the greeting.
And as for this long and broad question, its summary is: That this man was dealing in lending, and he had two paths. The first path: A person in need would come to this man, and he would go to a person who had many bags of rice or other things, or raw materials or other things they were accustomed to. This merchant would buy this merchandise from the shop owner, let us say for ten thousand riyals.Then he counts them: One, two, three, four,And he says: This is the taking of possession. Then he would sell it to this person in need for twelve thousand or thirteen thousand, depending on the length of the deferral period and the condition of the person in need. If he was poor, the charge on him would be more, and if he was not poor, it would be less.I say: This method is forbidden, and there is no doubt in it;Because: First: It contains a stratagem to circumvent usury.
And secondly: The goods were sold while they were in their place, and counting is not taking of possession in any way! Where is the taking of possession? The Prophet (peace and blessings be upon him) forbade selling goods where they are bought until the merchants take them to their dwellings.
As for the second method: And that he had cars; if someone needed one, they would come and take a car from him, then buy it and sell it to another. This is a matter called the matter of tawarruq, and the scholars differ on it. Imam Ahmad ibn Hanbal (may Allah have mercy on him) has two narrations regarding it: a narration permitting it and a narration forbidding it. Shaykh al-Islam Ibn Taymiyyah (may Allah have mercy on him) chose the narration forbidding it.And he said: That this is forbidden and it is a stratagem; because the buyer has no purpose for the car, his purpose is for the money he sells it for. So it is a stratagem, and stratagems do not make the forbidden lawful, but rather they add ugliness to its ugliness.
As for this usury that he acquired through this first and second method, it is forbidden without doubt.But according to what the questioner said: That people used to do this and it was not denied to them.And he said: That among those who did not deny it to them was Shaykh 'Abd al-Rahman ibn Sa'di (may Allah have mercy on him). So this man’s action was based on ta'wil (interpretation), thinking it was permissible based on the approval of these scholars. And if Allah knows from his intention that he did it based on ta'wil, then there is no blame on him, and no sin on him.But I tell you: The method that was in the time of Shaykh 'Abd al-Rahman ibn Sa'di (may Allah have mercy on him) is not like the method mentioned in this question.
The method is that a person borrows for him one or two or three units of raw material or other, then the debtor takes it and it is put up for sale in the market: Who will buy this? Who will buy this? So the goods are not sold in their place, and there is no stratagem for large amounts of money that people take without need. A poor person in need comes for ten riyals or fifteen riyals and buys this unit from the merchant, then he takes it and gives it to the broker to put it up for sale, saying: Who will buy this?I heard them when I was young saying: Who will buy the debtor’s money.
And like this is the matter of tawarruq on which the scholars differ, and Shaykh 'Abd al-Rahman ibn Sa'di considers tawarruq permissible, but it is not like the sale of people mentioned in the question.In any case: The heirs have nothing upon them, if Allah wills. And they should increase in seeking forgiveness for their deceased, and call upon Allah to turn to him in repentance. The money in their hands is theirs.