FIQH MUAMALAT II

MGA 3043

AR-RAHNU
(PAWNING/MORTGAGE)

VS

PREPARED BY: NURUL AINI MUHAMED

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 Points discussed in this topic

General characterization
Legality
Cornerstones and components
Forms of pawning
Conditions of pawning
Legality and consequences
Termination of ar-Rahnu contract
Debtor creditor disputes

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 Definition and General characterization
Ar-rahn in Arabic- to constancy, holding and
bindingness
Ar-rahn=pawning
Hanafiis- holding an item in lieu of a legal Pawning?
right that may be satisfied from that Rahn
item
Pawned
Shafiis-Taking a non-fungible property as object?
insurance against debt, whereby the Marhun
debt may extracted from the held
property if it is not repaid
Debtor?
Hanbaliis- A pawned object is a property Raahin
used as insurance for a debt, so that the Owner of
Owner of
debt/Creditor-
debt may be extracted from the property need to
pawned
object-need
if it is not possible to recollect from the Debt?
secure his
for money
money
debtor Murtahin
bih
Malikiis- Pawning is the act of taking a
valued property from its owner, as a
mean of insuring a loan that has
matured or is about to mature
3
---can be---animal, usufruct etc.
 Legality

Quranic versus:
If you are on a journey and cannot find a scribe, then
use the receipt of pawned object (2:283)

Hadith narrated by Al-Bukhari

Muslims consensus on its permissibility

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 Cornerstone and components

Components
Debtor (owner the pawning object)

Creditor (owner of the debt)

Pawned object

Debt

Cornerstones
Hanafiis- offer and acceptance

Non-Hanafiis- 4 cornerstones:

i) contract language
ii) contracting parties
iii) pawned object
iv) underlying debt
Owner of Owner of pawned
debt/Creditor-need to object-need for money
secure his money 5
 Forms of pawning

Pawning originates together with the debt generating contract

ie: credit sale

Pawning originates after the debt is established

ie: the same as secured written document as

Pawning originates prior to the establishment of a debt

-view pawning as insurance (Malikis & Hanafiis)
-pre-pawning not valid (Shafiis & most Hanbalis)

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 Pawning conditions*
Contracting parties conditions
Eligibility: Hanafiis & Malikiis-as eligible for sale
Shafiis & Hanbali- as in the charity
Cases i Guardian and plenipotentiary pawning childs or insane persons debt
of child's property debt of guardian
when the child reaches legal
age
ii)Multiple transacting parties

Contract language condition

Hanafiis-contract neither be suspended because of conditions nor be deferred
Shafiis- 3 types of conditions, valid conditions, nugatory ( no benefit) and conditions lead to
defective contract
Maliki-valid and defective
Hanbali-valid and defective

Underlyingdebt conditions
Hanafii- 3 conditions pawning object must be binding as a liability on debt
-the creditor is eligible for pawned object to reimburse the debt
-liability underlying a pawning contract must be known to all parties

* Based on Hanafi unless

specified
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 Pawning conditions

Pawned Object Conditions

Eligibility for sale

Being a property

Being valued-valued for Muslim, the pork and alcohol thus cannot be used as object

Being known

Being owned

Not being attached ie: pawn a land must together with plan

-house together with furniture---however pawning furniture alone

without the house is accepted
Being separate

Being clearly identified

Receipt of the pawned object

Specific consequence on pawning conditions

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 Legal Status and consequences of pawning contract

Invalid pawning contract and defective contract

Hanafiis- contract is invalid if it has a major defect at the foundation of
the contract-such as on the components
-contract is defective if the defect comes from the
characteristic of the contract
non-Hanafiis-no different between invalid and defective

Bindingness
Majority- after receipt of the pawning object

Maliki- by the conclusion of the offer and acceptance

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 Consequences of pawning contract: 10 consequences
After the contract is completed and the creditor receives the pawned object

Association of the underlying contract- single or multiple contracts

Hanafis- Depends on language, regardless of the level of pawned object
Malikiis-If pawning debtors were multiple or creditors were multiple, or
both-single contract is considered as multiple contract, unless the contract
names singles an individual from each party

The right to hold the pawned object

Demanding repayment

Safeguarding the pawned property

10
Consequences of pawning contract: 10 consequences
The pawned objects expenses

Utilization of the pawned property-pawning debtor utilization

- pawning creditor utilization

Dealing in the pawned property-debtor dealing

-creditor dealing

Guaranteeing pawned property-creditors possession

-types of guarantee
- Consumption of pawned
property

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 Consequences of pawning contract: 10 consequences

Selling pawned property-right to sell

-selling perishable pawned property
-priority claim of the creditor
-transfer of ownership to the creditor
-3rd party settlement after sale

Delivery of pawned property

Ruling for defective pawned object

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 Growth of pawned property

General-any increase comes from the pawned object belongs to the debtor
Level of the increase and implications:
Hanafiis- contiguous increases and separate growth in the pawned object
-part of pawning
Hanafis, Malikis and Shafiis separate non-derivative growth-belongs to
the debtor
Malikis- all contiguous and non-separable growth +all non-contiguous
offspring or product of the property- part of pawning
-any increase that are not part of the same form of the pawned
objects -not regarded as pawning
Shafiis- contiguous growth, increase in size etc-part of pawning
-identifiable growth (separate or non-separate) not part of pawning-
--belongs to the debtor
Hanbali- all increase - considered as part of pawned object and belong to
the creditor
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 Growth of pawned property

Adding to the pawning or debt

-Pawning-Zufar
-Debt-2 opinions

14
 Pawning contract termination

Returning property to debtor

The underlying debt is fully repaid
The judge forces the debtor to sell the property or he sells with the debtors
reluctance-exception if the sales with the creditors permission
The creditor void the contract

15
 Debtor creditor disputes

Disputes over underlying debts

Destruction of the pawned property
Disputes over receipt
Dispute over receipt
Dispute over time of destruction
Dispute over the pawned property
Dispute over possession

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Practical side: Calculation of the fee on the
debtor

Kadar upah
bulanan bagi
Nilai Marhun setiap nilaian
RM100

RM 1.00 - RM 400.00 RM 0.60

RM 401.00 - RM 2,000.00 RM 0.85
RM 2,001.00 keatas RM 0.95

Source: Ar-Rahn (2008)

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Wassalam

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