Law: Banking Tribunals Ordinance, 1984

Section: (2)(e)

(a) Banking Tribunals Ordinance (LVIII of 1984)          S.2(e)   Enforcement of Shariah . Act (X of 1991), Preamble   Banking Tribunal declining to grant mark up beyond the transaction period    Validity   Word finance used in S.2(e), Banking Tribunals Ordinance, 1984   Connotation   Agreements calculating to advance concept of trade and to forestall extension of interest are to be construed in the light of Islamic Fiqh.   Word `finance, within the meanings of section 2(e) of the Banking Tribunals Ordinance, 1984, does not involve any equivalent of interest and by its own force does not carry returns beyond the stipulated period unless emanating in due course of law or expressly covenanted, again within the framework of law. In the relevant agreement, envisaging sale and purchase of goods, no such term (finance) nor perhaps a term to that effect could be improvised, the reason being that such an improvisation may have exposed itself as a degenerative, relegating the transaction to one, carrying interest.   Patently, a provision for sale/and repurchase of the goods within periods specified (Bai Muajjal), culminating on repurchase, was calculated to advance the concept of trade and to forestall the extension of interest. Such agreements were to be construed in the light of Islamic Fiqh. The enforcement of Shariah Act, 1991, lends support to such observations because that legislation declares the Quran and Sunnah as the Supreme Law of the land and, if more than one interpretations be possible, enjoins upon all Courts to interpret statute law in a manner, consistent with Islamic principles and jurisprudence. Relevant to the present case trade and . commerce is to be encouraged and Riba, correspondingly, eliminated. Banking Tribunal thus, acted in accordance with law and within the parameters of the agreed stipulations, when it disallowed any mark up beyond the period of the contract, extending it only for the cushion period of specified days, which covered the period between demand and default as well as period likely to be consumed in the institution and conclusion of proceedings for recovery.…

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