Utilization of Pledged Property

Written by: Shaykh Hafiz Abdul Sattar Al-Hammad ( حفظ اللہ)

Arabic Text:

الرَّهْنُ يُرْكَبُ بِنَفَقَتِهِ، وَيُشْرَبُ لَبَنُ الدَّرِّ إِذَا كَانَ مَرْهُونًا

“A pledged riding animal may be ridden in proportion to its expenses, and the milk of a pledged milch animal may be consumed as long as it is pledged.”
[Sahih al-Bukhari, Kitab al-Rahn: 2511]

Key Points:

  1. Definition of Pledged Property (رہن):
    • When borrowing money, a person often leaves an item with the lender as collateral or a guarantee. This is referred to as "Rahn" (pledge).
  2. Permissible Use of Pledged Property:
    • If maintaining the pledged item involves expenses, it is permissible for the lender to derive a limited benefit equivalent to the maintenance costs.
      • For example:
        • A pledged riding animal can be used for riding, provided it is fed and cared for by the lender.
        • A pledged milch animal's milk may be consumed in proportion to its upkeep costs.
  3. Prohibition of Excessive Benefits:
    • Deriving benefits from the pledged item beyond its maintenance costs constitutes usury (Riba).
    • Imam Ibn Hajarexplains in his commentary:
      “If someone has a pledged goat, consuming milk equivalent to the cost of fodder is permissible. Any benefit exceeding the maintenance costs is Riba.”
      [Fath al-Bari, 5/178]
  4. Ruling on Deriving Benefits from Collateral:
    • Any benefit derived from a loan (such as use of collateral) without proper compensation is considered Riba and is impermissible in Islamic law.
    • Abdullah ibn Salam (رضی اللہ عنہ)advised Abu Huraira (رضی اللہ عنہ) as follows:
      “You live in a land (Iraq) where Riba is widespread. If someone owes you, do not accept fodder, barley, or any gift in return, as these are forms of Riba.”
      [Sahih al-Bukhari, Kitab Manaqib al-Ansar: 3814]
  5. Example of a Pledged Property (House or Land):
    • If a house is pledged against a loan and the lender wishes to reside in it:
      • Rent should be agreed upon and deducted from the loan amount.
      • Without such an arrangement, any use of the property constitutes clear Riba.

Conclusion:

In Islamic law, any benefit derived from a loan is impermissible unless it directly offsets maintenance costs. The principle ensures fairness and prevents the exploitation of the borrower through interest or unjust benefits. Care must be taken to avoid Riba in all forms, adhering strictly to the guidelines provided by the Quran and Sunnah.
 
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