(4-1) Goods not Possessed or Received
(4-1) Goods not Possessed or Received
Question (1)
Please provide the Shariah opinion towards the following offer submitted to the bank:
This is in respect to financing the purchase of video cassettes (of National model), and also air conditioning units to be sold on Murabaha. An application was presented by a client seeking consent on Murabaha for the purchase of the aforementioned equipment. In his request, he stated that the equipment have been bought from a certain firm. He enclosed along with his request an invoice relevant to those goods, indicating that he was indebted to that (client) and he requested the bank to pay value of such equipment in Egyptian Pounds. The above mentioned client has demanded the bank to settle the attached invoice amount and that
he has undertaken to pay an amount exceeding the invoice amount. He has also undertaken to pay 10% of the buying price and he requested that the balance price amount to be paid in installments spread over 4 months.
Answer:
The Board perceives that the transaction, as illustrated in documents is a Murabaha sale,and it is absolutely invalid in its current form. This is because a Murabaha sale means to sell out a commodity that you possess by a price that you have paid added to it a profit margin agreed upon by the party interested in buying it on Murabaha method. However, the papers lodged in the file do not indicate that the bank is in possession of a commodity to be sold on Murabaha method. The document at hand is only an invoice for a commodity bought by the client who is requesting the bank to pay value of such goods against what he has declared in his aforementioned request. The Board has therefore decided to disapprove execution of this transaction and other similar transactions for being inconsistent with the Shariah rules in terms of Murabaha sale.
Source:
Shariah Board, "Book of Fatwas ", Faisal Islamic Bank of Egypt, Fatwa No. (8).
Question (2)
A question posted by a dealer with Kuwait Finance House.
A person desires to buy a property from another person for a specific amount, say One Hundred Thousand Dinars. The buyer has an intention of selling it to a third party on Murabaha method. The buyer and the seller may disagree on the final price.
Is the third party eligible to pay the difference to the seller as a grant (hibah) from him in order to facilitate the contract signing process and so that the third party may earn some benefit by way of buying from the purchaser. Payment may be effected prior to or after contract signing. What is the Shariah opinion in paying such a difference by the client bearing in mind that promising buyer's obligation to pay the disputed difference amount between the property owner and the Finance House is a verbal agreement between the promising buyer and the owner. This includes promising buyer's obligation to buy the property in full price in addition to paying the difference while the Finance House would pay the remaining balance.
Answer:
Contracting between Kuwait Finance House and the owner as in this case is not permissible, because the owner is selling something which has gone out of his possession and became the promising buyer possesion, which is non permissible because the owner would appear as a principal. In case the Finance House happens to know about this issue, it should refrain from entering into a contract with the property owner due to the fact that it would be contracting with a party who does not possess the property.
Source:
Kuwait Finance House, Book of Fatwas on Economic Issues, Part (1), and (2), Fatwa No.(311).
Question (3):
Is it permissible to sell goods on Murabaha basis while the goods are stored in a location other than the place of sale and has neither been seen or received by the bank?
Answer:
It is a prerequisite for the bank to possess the goods even if it is a constructive possession. Thereafter, it sells the goods to a third party (buyer) through Murabaha.
Source:
Shari'ah Board, "Fatwas ", Islamic Bank of Western Sudan, Fatwa No. (14).