Sale of Debt in Exchange for Debt: Prohibition in Islam

Author: Dr. Muhammad Zia-ur-Rahman Azmi (رحمه الله)

Ruling:

The sale of one debt in exchange for another (Qarz ke badle qarz ki bai') is not permissible in Islam. This transaction typically involves both the consideration (payment) and the item being sold being absent at the time of the contract. Even if the price is fixed and the sold item is clearly described, such a sale remains impermissible.

Example:

If a goat that is far away is sold for 100 Saudi Riyals on credit, this transaction is invalid. Since neither the payment (price) nor the goat (item being sold) is present at the time of the contract, it becomes a case of debt-for-debt, which is prohibited.

Permissibility Conditions:

  1. Presence of Either Party:
    If, before the meeting ends (Majlis-e-Aqd), either the payment or the sold item is physically delivered or made present, the sale becomes valid.
  2. Invalidity Upon Dispersal:
    If both parties leave the meeting without either the payment or the item being present, the sale becomes void (Bai' Batil).
Reference:
  • Fatwas by Sheikh Ibn Jibreen (رحمه الله), Volume 10, Page 7.
*Allah knows best.
 
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