The Supreme Court decision has
the great important in view of national and international implications
From SHAMIM AHMED
July 01 - 07, 2002
After listening to the heated arguments from both
sides for over 9 days the Appellate Shariat Bench of the Supreme Court
on Monday ordered the Federal Shariat Court (FSC) to rehear afresh the
Riba case involving the question of transforming the prevalent
interest-based economic system into Islamic mode of financing.
While setting aside court's earlier December 1999's
judgement to switch over from Riba-based economy to an
"absolute" interest free financial system, Monday's court
order observed that "there are errors floating on the surface of
record" of the judgement.
The five-member bench unanimous order said; "We
are of the considared view that the issues involved in these cases
require to be re-determined after thorough and elaborate research and
comparative study of the financial systems which are prevalent in the
contemporary Muslim countries of the world."
While directing the government to replace the
existing economic system with an interest-free economy, the apex court
on December 23, 1999 had held that all the existing rules and laws
operating interest-based economy would cease to have effect by June 30,
2001. The apex court gave one-year extension on federal government
sponsored-plea of the UBL to enable the military rulers upto July 2002.
The Supreme Court has given a new life to the modern prevailing banking
system in the country. The state consel had argued that it will lead to
financial anarchy if the earlier judgement was implemented in July 2002.
The Shariat Bench of the Supreme Court which
delivered the judgement on Monday comprised Chief Justice of Pakistan
Justice Sh. Riaz Ahmad, Justice Munir A Sheikh, Justice Qazi Muhammad
Farooq, Justice Dr. Alama Khalid Mahmood and Justice Dr Rashid Ahmed
The court judgement observed that before striking
down any law, the previous Appellate Shariat Bench of the apex court (of
which Justice Munir A Sheikh was also member) ought have remanded the
case to the Federal Shariat Court to decide the issues of inflation and
The court verdict authored by Chief Justice of
Pakistan Mr. Justice Riaz Ahmad Sheikh observed that since the FSC did
not give a definite finding on all the issues involved in the
determination to enforce an Islamic economic system, it was essential to
remand the case to FSC for the resolution of the controversy on the
Recalling the arguments of federation's counsel, Dr.
Syed Riazul Hasan Gillani, the court order said the principal amount
which is liable to be returned in a transaction of Qarz (loan) must be
re-de-fined keeping in view the scope of its intrinsic value in relation
to inflation so that there should be no exploitation as regards the
equities of the parties.
"The (previous) Shariat Appellate Bench has not
properly distinguished the terms 'usury' 'Riba' and 'interest'. The term
'Riba' has not been defined in the Holy Quran and all that has been held
in the judgement under review is based on Qiyas (analogy). The Word
'usury' is a kind of 'Riba' whereas the term interest refers to
'profit'" according to arguments by Raja Akram reproduced by the
While reproducing the arguments of Dr. Gilani, the
Supreme Court said the impugned judgment amalgamated legal and moral
aspects of Riba. And failure to distinguish between legal and moral
aspects of Riba has resulted in violation of the injunction of Islam as
laid down in the Holy Quran and the Sunnah of the Holy Prophet (PBUH) as
well as the juristic opinions of Imam Abu Hanifa and other great
The court noted the government's argument that the
FSC judgment was biased as the author of the judgment. Justice Dr.
Tanzilur Rehman, the then chief justice of the FSC, had delivered the
judgment with a "pre-determined mind". It was argued by the
federal government that Justice Tanzilur Rehman had referred to his own
books on the subject and placed reliance on the Council of Islamic
Ideology which was also authored by himself and ignored the opinion of
eminent jurists of Islamic World.
The judgement concluded "It would be in the
fitness of things if the matter is remanded to the Federal Shariat Court
which under the Constitution is enjoined upon to give a definite finding
on all the issues falling within its jurisdiction.
"Resultantly, Civil Shariat Review Petition No.1
of 2000, filed by the United Bank Limited is allowed, the judgment dated
23rd December 1999 passed by the Shariat Appellate Bench and the
judgment passed by Federal Shariat Court on November 14, 1991, are set
aside and the cases are remitted to Federal Shariat Court for
determination afresh in the light of contentions of the parties and
observations which are germane to the controversy."
The Supreme Court decision is, undoubtedly, of great
importance in view of the nation's ideological moorings and
international economic implications. It, in fact, constitutes a dilemma
for it in the objective internal and international conditions. The
Appellate Shariat Bench has, therefore, rightly decided to refer the
case to the Federal Shariat Court for re-hearing in view of the
multifarious constitutional, legal and religious and practiced issues
involved in it. There is, however, need to benefit from other Muslim
countries and prestigious religious institutions like Al-Azhar to find
answer to the questions raised by the two sides during the hearing of
the case before the apex court's Appellate Shariat Bench. We have to
find the answer with a centrist approach in keeping with the Islamic
virtues of moderation, justice and pragmatism. It is neighter
appropriate nor desirable to behave like an ostrich and close our eyes
to the truth that Pakistan is an ideological State and also has to live
with the objective international economic envioronments.
We have to be mindful of the vital aspects of the
modern era, which have direct bearing on business, trade and banking. A
perception had, however, emerged during the hearing of the case in the
Appellate Shariat Bench that the Government had not done its home work
on the issue of the introduction of Islamic banking in the country. It's
a serious matter, because the case was of a great significance to the
nation's future. There should have been no apathy on this count. It is,
however, hoped that the Government will duly respond to the intricate
issues and articulate its stand with clarity, objectivity and
realistically during the re-hearing of the case by the Federal Shariat
Bench, since its decision will be of far reaching consequences.