When the news came on July 2, 1997,
that the government has decided to take back its appeal filed with the Appellate Bench of
the Supreme Court in 1991 against the decision of the Federal Shariah Court, that decreed
the provision of interest in a number of fiscal laws as repugnant to Shariah, the
immediate feeling was as if the government has at last realized its mistake. Details of
the news, however, revealed that it was all monkey-trick aimed at sabotaging the
FSC’s historic decision. That is why the FSC has been asked to review and grant two
years, provide interim relief, frame detailed guiding principles and give workable
solution for eliminating interest from all transactions. FSC is further asked to indicate
why and how a certain law would be declared un-Islamic. A very dark picture is painted as
to what will happen in the areas of external loans and trade, if we go interest-free. FSC
has further been demanded to constitute a bigger bench, as if the three member bench of
1991 was not enough, or able, or authorized to give the decision. Lastly, the question has
been raised whether the FSC could declare un-Islamic any provision in vogue. Shortly, the
FSC has been sufficiently harassed.
The government’s decision has
ended up in a serious controversy. Registrar, Supreme Court announced that the petition
could not be withdrawn ‘technically’, without the bench’s permission.
Reportedly, the Chief Justice of Pakistan observed that the tone and tenor of the language
used in the government’s application was ‘inappropriate and unfair’ and
that its certain paragraphs were ‘intriguing’. Ironically, however, the FSC has
admitted the review petition filed by the government and FSC Chief Justice ordered
issuance of notices to the respondent. What one feels is that the government was not much
hopeful about the fate of its appeal before the Shariah Appellate Bench and tossed it back
to FSC after five years, raising new questions and issues to kill some more time. Through
this new game, the government expects its beloved ‘system’ will survive and that
hopefully the fresh decision of the FSC might turn out to be different from the past.
The manner the appeal has been
withdrawn by the government gives the impression as if the 1991 decision of the FSC was
incomplete and taken in haste without first duly considering its impact on the
country’s economy and its relations with international community. Given below is a
brief account of the great pains taken and strenuous efforts made by the three-member FSC
bench, headed by Mr Justice Tanzilur Rehman which decreed that the provisions of
interest in a number of fiscal laws came under the definition of ‘riba’ and
were thus repugnant to the Shariah:
a) The FSC disposed 115 petitions
that challenged the legality of interest in 20 fiscal laws besides three ‘suo
moto’ Shariah notices.
b) The FSC got the mandate to admit
petitions, on 25th June, 1990, before which the fiscal laws were kept out of its
jurisdiction for over 10 years, through successive constitutional amendments by the
government. The FSC admitted the first petition on December 11, 1990 and the hearing
continued for almost one year till October 24, 1991. The judgment was announced on
December 7, 1991.
c) The FSC judgment is a voluminous
document, consisting 564 foolscap pages, the text covering 298 pages. It has two
appendices. Appendix ‘A’ contains replies to the questionnaire issued by the FSC
to 12 distinguished scholars, economists, bankers and jurists, both within Pakistan and
abroad. Appendix ‘B’ gives extracts from the report of the Council of Islamic
Ideology on ‘Elimination of Interest from Economy’ (1980).
d) The FSC based its conclusions on
various Qur’anic verses, Ahadith of Prophet (p.b.u.h.), opinions of the jurists and
various Arabic language dictionaries. It quotes from Lane’s Lexion, Taj al-Arus
al-Nihaya (Ibn-e-Athir), A Dictionary of Islam by Patrick Hughes. Among the exegesis (tafaseer)
it quotes from Tabari, Ibn Arabi, al-Jassas, Sabuni, Sayyed Qutb, Mawdudi, Mufti Shafi and
al- Muntakhab fi Tafsir al Qur’an al-Karim (Egypt). In Hadith, the judgment refers to
Imam Malik, Muslim, al-Bayhaiqi, Ali al-Muttaqi, Abu Dawud and Ibn-Hanbal.
It cites from Hidaya - the famous
book of Hanafi fiqh. Other fiqhy sources are the resolutions of Fiqh Academy of India and
Islamic Fiqh Academy of OIC countries. From the contemporary scholars, the judgment
benefits from Hamidullah, Fazlur Rehman Ansari, Maulvi Fazlur Rehman (Aligarh) and Abraham
Udovitch. The judgment brings ample evidence from historic sources that loans in vogue in
the days of the Prophet (p.b.u.h.) were of commercial nature. Of economists, it
refers to the report of ‘Panel of Bankers and Economists’, issued by the CII in
1980.
e) The judgment also examined view
point of a council which tried to confuse the issue by contending that ‘riba’
falls into the category of ‘Mutashabehat’ and proved beyond doubt that the
matter falls in the classification of ‘Muhkamat’, and being a clear
Qur’anic injunction (Nas) cannot at all be subjected either to
‘Maslaha’ or’ ijtihad’.
The above brief review of the
FSC’s efforts and endeavours make ample proof that its decision of 1991 was not
recorded in a hurry. The size and coverage of the judgment leave no room for doubt that it
discussed threadbare every concerned area and aspect. It was now for the government to
clearly tell how and in what specific areas it felt the original judgment was really
lacking, thus giving rise to the necessity of review.
A fact of the matter is, why should
the FSC be asked to provide answer to every conceivable question and also suggest workable
alternative system, more so because the government does not guarantee at all it will
accept without hesitation what the FSC would propose at the end. It only promises to
consider the alternative systems. In the 1991 judgment of the FSC, the government was
given six months to come up with appropriate amendments in the law and initiate practical
steps. Let the government inform the nation what its Law Ministry and numerous other
organs concerned did since then, and why instead of implementing the judgment, it was
blocked for five years through appeal in the Supreme Court. Having spoiled so much
precious time, it is now said that the judgment is incomplete and non-workable. We welcome
with pleasure the observations of the Chief Justice of Pakistan and make further humble
submission that the government should not be allowed to withdraw its appeal and let now
the Appellate Bench hear and decide the case on pure merit.
In the view petition, the government
has tried to take an ‘innocent’ position by pleading that certain areas needed
further clarification. In fact these areas, whatsoever, were the responsibility and domain
of the government and not the FSC. We have already noted above that the FSC Bench went
much farther than the questions raised before it in the petitions and even proposed
alternative modes. If even we accept what the government now says, then it means there are
areas which the FSC has covered adequately and for good. Let the government implement that
part of the judgment, which concerns interest on internal loans and the government
sponsored schemes. After all, in the review petition, most objections are raised about the
external loans and international trade. If, therefore, it will give an indication that the
government was now ready to announce at least ‘temporary cease fire’ in over
50-years long futile and criminal ‘war against Allah and His Prophet
(p.b.u.h.)’.
Let us here clarify one point.
Elimination of ‘riba’ never means zero-returns on capital. What Islam forbids is
a ‘fixed pre-determined return for a certain factor of production, that shares no
risk’. Islam has not denied the productivity of capital, but does provide a fresh
approach in which all factors receive variable return based on actual performance.
Also it is not something as novel or
naive as the government through its apprehensions attempts to project. The world is well
aware of the venture capital, as it knows and deals with loan capital. With the advent of
Islamic Banking in 1970s, a number of international institutions and organizations
indicated the openness that we as Muslims, expect from bankers and investors. Even the
IMF, World Bank and IFC have been showing interest in the alternate arrangements for
participation of capital and entrepreneurship. We are, therefore, not talking in a
language foreign to the professionals and secular institutions and bodies.
No one will contest that an historic decision like
elimination of interest from a whole economy will pose challenges. But those are to
be faced and resolved with conviction and firm political and ideological commitment. This
test case leads to eternal life and can also prove to be a death warrant. Decision rests
with the government.
The Challenge of Interest and the Islamic Movement
