QAWAID FIQHIYYAH(ISLAMIC LEGAL

MAXIMS)ISB 653

FOURTH MAXIM (THE PRINCIPLE OF DHARAR)

NAME MATRIC NO

1. SITI NORHASIMA BT MOHD YUSOF

2010126529

2. NUR FAHEZZA BINTI MUSA 2010108559

3. NORFAJRINA BT ISMAIL 2010521411

4. NURUL AIN BT MOHD ANUAR 2010730561

5. NURUL HANISS BT MANAB 2010127963

PREPARED BY:

PREPARED FOR: PM CHE ZUINA BINTI ISMAIL

INTRODUCTION

* Meaning* Sources

* Level of necessity* Application

* Related Maxim

APPLICATION OF LEGAL MAXIM IN

CURRENT PRACTICE* Application in Islamic Inter-Bank Money Market (IIMM)* Government Investment

Issue (GII)* Negotiable Islamic

Certificate of Deposit (NICD)* Commodity of Murabahah

Programme* Ta’waidh (Compensation)

* The Permissibility of Ta’waidh

* Example of Current Pratice (Ijarah / Istisna’)

* Istisna’ Financing* The Pemissibility of Istisna’

INTRODUCTION

SOURCES

RELATED MAXIM

APPLICATIONS

LEVEL OF NECESSITY

MEANING

INTRODUCTION

Legal maxim is important to solve the problems

LM developed gradually & history are parallel with the fiqh

Most Important maxim are reciprocated in QURAN & HADITH

REMOVE ALL KIND OF HARM

MEANING

HARM SHALL NOT BE

INFLICTED

ANY HARM SHOULD NOT

BE RESPONDED

HARM – all kind of harm

- involve individual, society ,

environment,

HARM SHALL NOT BE

INFLICTED ( LA DARAR)

- Will incurred further harm- Example:

A damaged the property of B intentionally cannot under any circumstances damage the property of A in revenge, but he must get the compensation for the damages on his property from court of law.

ANY HARM SHOULD NOT

BE RESPONDED

• Definitely forbidden -without intention • Bear the consequences to course the

harm of his action.

HARM

INTENTIONALLY UNINTENTIONALLY

• Scholar has classified

sources

• The lesser of two evils should be perpetrated to avoid the greater.

• Prohibition on causing harm:

The month of Ramadhan [is that] in which was revealed the Qur'an, a guidance for the people and clear proofs of guidance and criterion. So whoever sights [the new moon of] the month, let him fast it; and whoever is ill or on a journey - then an equal number of other days. Allah intends for you ease and does not intend for you hardship and [wants] for you to complete the period and to glorify Allah for that [to] which He has guided you; and perhaps you will be grateful.

And strive in His cause as ye ought to strive, (with sincerity and under discipline). He has chosen you, and has imposed no difficulties on you in religion it is the cult of your father Abraham. It is He Who has named you Muslims, both before and in this (Revelation) that the Messenger may be a witness for you, and ye be witnesses for mankind! So establish regular Prayer, give regular Charity, and hold fast to Allah. He is your Protector - the Best to protect and the Best to help

DHARURIYYAT HAJIYYAT TAHSINIYYAT

LEVEL OF NECESSITY

DHARURIYYAH (necessity)

• Protect the primary human value ( maqasid shariah)

protecting, preserving & preventing:

i) religion.

ii) life

iii) intellect (aql)

iv) descent

v) wealth

HAJIYYAT (convenience)

• It is not too vital like preserve the 5 foundations.

• People want to own these things to satisfy their needs. – not compulsory to have it.

• Example: car hand phone.

TAHSINIYYAT (luxury)

• Luxury things• It can improve life to be more comfort.• People wish to have these things to fulfill

their satisfaction of needs & wants.

application

Period of leasing an

agricultural land ends before

harvesting the crops.

Driving recklessly on the highway

which may lead to accident.

Sells anything that could rots

quickly

Related maxims• “ harm must be prevented wherever

possible”

- all necessary measures must be taken to

prevent any harm from happening.

• “greater harm must be prevent event at the expense of the lesser harm”

- there are two evils, the lesser evil can be

committed in order to prevent the

greater evil from occurring

APPLICATION OF LEGAL MAXIM IN

CURRENT PRACTICE

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1. APPLICATION IN ISLAMIC INTER-BANK MONEY MARKET (IIMM)

- Government Investment Issues (GII) - Negotiable Islamic Certificates of Deposit (NICD) - Commodity Murabahah Programmed

2. TA’WIDH (COMPENSATION) The permissibilty of ta’widh a. HADITH b. QIYAS c. CONTEMPORARY FATWAS

3. TYPES OF CURRENT PRACTICE - Ijarah financing

- Istisna’ financing The permissibility of Istisna’ * Al-quran * As-sunnah * Qiyas * Istihsan * Maslahah * Fiqh Maxim

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Application in Islamic Inter-Bank Money Market (IIMM)

Introduced on 3rd January 1994

Source of short-term investment outlets and opportunity for banks to

manage their potential asset and liability mismatch

To provide the Islamic banks with the facility for funding and

adjusting portfolios over the short-term and hence

maintaining the funding

Manage liquidity because liquidity mechanism also

necessary in order to promote stability in the system

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Government Investment Issue (GII)

Issued by the Government of Malaysia based on qard al-hasan principle

The transaction replaced by bay’ al-inah

Secondary market via

concept bay’ al-dayn

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Central Bank of Malaysia sold the Shariah-compliant asset (GII) to the Bank Islam at RM 1 million on deferred terms

Bank Islam will sell back the asset (GII) to the Central Bank of Malaysia on cash basis at RM 950,000,000. The difference of price is regarded as profit to the financier

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Negotiable Islamic Certificates of Deposits (NICD)

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A high net worth individual client who wishes to deposit RM 1 million in NICD with an Islamic bank would normally expect a fixed return from the bank

1.

The banks sell it asset worth RM 1 million to the client and get paid on cash basis. The bank now secures RM 1 million deposits

2.

The clients’ sells back the share cerificates to the bank at deffered price, which is based on a profit rate for example 7.5% for duration of 6 months (7.5% x 6/12 x 1,000,000 = 37,500.The bank now issues the client NICD worth RM 1,037,500 as the nominal value. The issuance of the NICD is undertaken as evidence of the RM 1,037,500 debts that the bank owes the client

3.

At maturity, the NICDs are redeemable at par value where the client gets back the RM 1 million deposits plus RM37,000 profits.More importantly this NICD is tradeable in the secondary market for liquidity purposes

4.

Commodity Murabahah Programme

Commodity Broker B

Bank B

Commodity Broker A

Central Bank of Malaysia

(3)

(2)

(1)

1st step

• BNM purchase the commodities from Broker A for cash basis.• Ownership of commodities transferred to BNM

2nd step

• BNM sell the commodities to bank B on deferred price (Murabahah concept)• Ownership of commodities transferred to Bank B

3rd step

• Bank B sell commodities to Broker B in on the spot at the original cost price to net off the commodity position.

• On maturity date, Bank B will pay central bank for the cost price plus profit.• Also bank B obtain fund on spot that manage its liquidity

Agrument Prohibiting Bay Al-Inah

Most of the Muslim jurist prohibiting bay al-Inah mainly disputing that is a legal device (hilah) to avoid riba’-based financing

Those who against Bay Al-Inah basically follow to the opinion of classical scholars Hanafis, Malikis, Hanbalis and some of the Shafiis scholars who reject bay al-Inah. This statement explain the global rejection of the Malaysian practice of bay Al-Inah in Islamic financial market

However, Malaysian scholars who mainly follow to the opinion of Shafiis, Abu Yusuf, Abu Daud, and Abu Thur, including a report from Ibn Umar that view the transaction of Bay Al-Inah contrary to Shariah principle

Among the Argument are

1. The companion report relied by those who reject Bay’ Al-Inah is considered as weak both in terms of its transformation (sanad) and wording (matan). The proponent/medernist argue that one of the narrators of the hadith named al-Aliah binti Anfa is unknown (majhulah). Al-Dar Qutni regards her as unknown figure, thus the chain of transmission is doubtful and hencenthe hadith cannot be proof. The companion report is also weak in terms of its wording (matan).

2. The companion report is a narration from Saidatina Aisyah: A mother ask Saidatina Aisyah

“O mother who Beleivers! I have sold a slave belongs to Zaid bin Arqam to Ata’ for 800 dirham. Since Ata’ needed some money, I have bought back the slave before it is due for me to receive 600 dirham.”

“How could you execute such a bad sale. You should inform Zaid Bin Arqam that his conduct has extinguishes all his rewards for participating in jihad with thecProphet p.h.u.b if he does not repent.”

“What is your opinion if I forgo the profit and take the principal

sum only?

Aisyah then recite a verse from means:

“Whoever receives an admonition from his Lord and stop eating riba shall not be punished for the past, his case is for Allah

(to judge)”

They claim that Saidatina Aisyah is in not in capacity

to determine the status an validate the rewards for jihad that Zaid had

involved togather with the Prophet p.b.u.h in the

battle fields since Zaid had conducted an ijtihad

(personal feasoning) and was of the the view that

such a sale is permissable

3. On the issue hilah, the Malaysian scholars argue that not all hilah is rejected. In fact, Hanafis and Shafiis school generally approve the use of hiyal (a plural for hilah as long as it does not deny the rights of people or involved falsehood (batil) or even demeaning the religion

Based on this premise, the SAC of Malaysia argued that hilah is evident in the practice of Islamic instrument in IIMM is regarded as a mode to solve the problems (makhraj) that is much needed by the people, provided that necessary conditions are duly followed in order to avoid any abuse of such contract which may lead to dispute or injustice.

Al-Sarakhsi strongly argued that “Hiyal as they are produced by he Imam is permissible according to majority (jumhur) of the scholars, and those who detest that (the use of Hiyal) did so due to their ignorance and lack of those observation (taamul) of the Quran and Sunnah”

Maxim of Islamic Jurisprudence that will be use in Dealing with this matter

• “Neither Harm nor reciprocating harm”• Imam As-Sayuti based on his famous book ‘Al-

Ashabah wan nazhooir’ assert that this hadith is significant as it embodies the fundamental principle and maxims of Islamic Jurisprudence. Based on this principle, there is a need hajiyyat to adopt some controversial contract like bay al-Inah and tawarruq as tools for liquidity risk management, without having to resort to conventional riba-based borrowing.

• This is supported by another of maxim of Islamic Jurisprudence:“Severe harm is avoided by lighter harm”/Al-darara Al-Ashadu Yuzalu bi Darari Al-Akhaffu or choosing between the lesser of two evils (akhlaf al-darayn).Within the context of our discussion, the choice is actually between having to resort to liquidity management instrument which imbued with clear-cut riba’ elements, or the alternative practice contentious tawarruq-based instrument.Based on this maxim, it is thought that to choose what is still disputed or doubtful (shubhah) is of lesser evil than to opportunity for transaction that is clearly prohibited.Both of the SAC of Securities Commission of Malaysia and SAC of Bank Negara Malaysia had officially endorsed both of Bay Al-Inah an Tawarruq to be used for liquidity Management purposes

• One of the argument raised to justify the support their adoption of Shafiis view in legalizing bay Al-Inah and Tawarruq is public interest consideration which is overcome the problem of liquidity shortage in the country, without resorting to conventional riba-based liquidity instrument and transactions.

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• Majma’ fiqh defines Ta’widh as payment of financial compensation or counter value which is obligatory as result of harm causes to other parties. Ta’widh is the more specific than compensation for losses (dhaman) which is stipulated by Syariah sources like Diat & Yad dhamanah

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a) The permissibility of Ta’widh-Hadith

Hadith 1• Meaning: “The Rich (solvent) who delay the

payment of debt are committing tyranny”

Hadith 2• Meaning: “Neither harming nor

reciprocating harm in Islam”

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Based on this hadith, the debtor’s act of delaying payment is a loss (harmful) to the creditor. This situation has to be avoided so that business are conducted according to the principle of istiqrar ta’mul, that is the smooth running of the market.

b) The permissibility of Ta’widh-Qiyas

• The delay in paying off a debt can be compared with Ghasb (usurpation) of valuable property.

• The similarity of illah between the two that obstructing the use of property and exploiting it in a tyrannical way.

• According to a Shafii and Hanbali Scool, in the case of Ghasb, the usurper has the benefit of using the property he has seized and therefor must pay compensation to the owner.

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• In the case of a delayed payment of debt, the creditor stands to lose because he is deprived of the opportunity of using the funds for trading purpose, which he could if the debt is settled within the stipulated time framed.

• In general, it is non-permissible to charge extra amount and it consider as riba

• Therefore, this loss should be compensated by the debtor based on qiyas

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c) The permissibility of Ta’widh-Fiqh Maxim

• The permissibility of Ta’widh is also supported by a maxim in Islamic Jurisprudence that is:

“whatever loss should be removed”

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d) The permissibility of Ta’widh-Contemporary Fatwas

• There are justification in Islamic law showing that the Ta’widh can be used in certain transaction. For example, a fatwa resolved by Qadhi Syuraih stipulated that the imposition of Ta’widh in certain transaction is permissible

• The permissibility is referring to a case whereby a hirer agrees to be imposed which compensation if he fails to fulfill his promise.

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IJARAH STRUCTURE:

(1 )

(2)

(3)

1) Mr. J made a Ijarah contract with BIMB

2) The property will transfer to Mr. J3) Mr. J made monthly lease

installment that stated in an agreement. But he was delayed the payment of rent for 3 month.

IJARAH STRUCTURE:

“ Whatever loss should be removed”

ACCORDING TO LEGAL MAXIM:

ISTISNA’ FINANCING Arabic word: is derived from the word Sana’a Literally: Making, manufacturing @ constructing

something Al- Zarqa defined it as a contract of selling a

manufacturer able thing with an undertaking by the seller to present it manufactured from his own material, with specified descriptions and at a determined price

Non- permissible with non-existence of subject matter

Permissible if the characteristic and the view of product stated in the contract

A special kind of contract which have relation with options (khiyar)

AL-QURAN

AS-SUNNAH

QIYAS

ISTIHSAN

MASLAHAH

FIQH MAXIM

THE PERMISSIBILITY

OF ISTISNA’

1. AL-QURAN

AL-QURAN“Allah desires for you ease, He does not desire for you difficulty”

Al-Baqarah 2:185

“ God commands justice and fair dealing”

Al- Nahl 16:90

2. AS-SUNNAH

AS-SUNNAHAS-SUNAS-SUNNAHNAH

Rasulullah SAW said:

AS-SUNNAH

“Every stipulation is lawful among the Muslims, except one, which

declares forbidden what is allowed or allows what is

forbidden”.(Hadith Muslim)

3. QIYAS

Not be allowed: because it is a sale of what we do not have nor on the basis of Salam and the Prophet had prohibited the sale of what we do not have

Siddiq Al-Darir: based on Qiyas and not against it as it is claimed by the Hanafis

Ijma’: The claimed of Ijma’ by the Hanafis is well-known among the major Hanafi works such as in his book: Al-Masbut and Al-Badai’

QIYAS

4. ISTIHSAN

ISTIHSAN

• istihsan seems to represent the first legal basis for this contract especially in the literature of the classicl school of law

• Al-Kasani: because people are unanimous about its need

• Prophet said:“my community shall never agree on an error” and “what is good for Muslim is good in the sight of Allah”

5. MASLAHAH

MASLAHAH

• Refer to the unrestricted public interest in the sense of not having been regulated by the lawgiver and no textual authority can be found on its validity or vice versa

• Al-Ashgar:

“the used in this contract, eg

without objections from the scholars is a demonstration of the general need. Therefore, it should be legal on the basis of public interest”.

6. FIQH MAXIM

FIQH MAXIM

• “necessity is judged according to its merits”• Permissible because of the general need and

its give advantages to people

• “harm must be eliminated to an end”

• Option of defect is the right of the buyer to cancel the contract

MODUS OPERANDI

1

4

5

23

Diana

BANK

CONSTRUCTOR

CONCLUSION

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Some might say that the patient is suffering from harm or injury and Islam calls for lessening pain and suffering

When faced 2 evils, the lesser one is chosen, ikthiyaar ahwan al sharrain

This is interpreted to mean that continuation of painful, terminal life is better that euthanasia

Surah Al Maidah : 6

68

O you who have believed, when you rise to [perform] prayer, wash your faces and your forearms to the elbows and wipe over your heads and wash your feet to the ankles. And if you are in a state of janabah, then purify yourselves. But if you are ill or on a journey or one of you comes from the place of relieving himself or you have contacted women and do not find water, then seek clean earth and wipe over your faces and hands with it. Allah does not intend to make difficulty for you, but He intends to purify you and complete His favor upon you that you may be grateful.

These ayat revealed that “God does not intend to inflict hardship on you”

Allah never burden Muslim to bear the hardship but Allah always eliminate the hardship especially for the Muslim to perform ibadah such as praying, fasting in Ramadhan, paying the zakat, and many else

The jurists have used this evidence in support of the many concession that are granted to disabled and the sick in the sphere of religious duties as well as civil transaction

It is necessary to eliminate or prevent harm to avoid the lesser harm will contribute to the bigger hardship in our life

END OF CHAPTER

THANK YOU

*~Group 7~*