LOAN REPAYMENT

22 Jun 2019 Ref-No#: 1959

Assalamu Alaikum Mufti sab
I want an Islamic guidance or ruling on my matter:
I had borrowed money from my brother in law to buy a house equivalent to US$65,000
We agreed that
I cud make my repayments flexibly to me
The amount borrowed by me was in Local Malawian currency but due to inflation and to cover himself on value of the money in future he pegged it in US $, which i agreed
After some years he needed his money and as i was ready to pay him, he refused to receive the money and was demanding surplus money in the name of Profit.
Eventually he summoned my younger brothers and an elderly middle man
He told me he is not prepared to receive the principal amount borrowed by me and if i dont add the extra money he doesnt need his money.
I feel i cannot pay him the extra money as profit because it tantamount to Riba (Interest)
He is not receiving his money until as of now.
What do i do in this case ?

Answer

Wa’alaykum as Salam wa rahmatullahi wa barakatuhu,

It is not permissible for your brother in law to charge any additional cash. This is clear interest, and it will not even be permissible for you to pay it. Jabir (may Allah be pleased with him) said,

عَنْ جَابِرٍ، قَالَ لَعَنَ رَسُولُ اللَّهِ صلى الله عليه وسلم آكِلَ الرِّبَا وَمُؤكِلَهُ وَكَاتِبَهُ وَشَاهِدَيْهِ وَقَالَ هُمْ سَوَاءٌ. (أخرجه مسلم في صحيحه – 3/ 1219)

“The Messenger of Allah (sallallahu alayhi wa sallam) cursed the consumer of Riba, its giver, its recorder and its two witnesses and he said they are (all) equal.” (Sahih Muslim, 3 / 1219)

If he wanted profit, he ought to make this clear at the beginning. It would have been possible then to structure a Muraabaha deal, where he could purchase the house and sell it to you with the option of paying back over time. However, that is not possible now.

The best is to arrange for arbitration with your local ‘Ulama. Ask him if you can go to the Imam of your Masjid, and he can pass judgement between you two. Both parties should give an undertaking in writing that they will follow the verdict of the judge / arbitrator.

If he does not agree on that, you can notify him that you have his funds, and he is most welcome to collect it. Tell him that if he does not take the funds, you will use the present rate of the Dollar and deposit into his account (if your country does not have Dollar accounts). After three warnings, deposit the cash into his account.

If he does not have a bank account, you may notify him that he is most welcome to collect the cash at anytime.