The Right Of The ‘Rahn’ In A Debt
Question: As Salaamu alaikum,
An individual wanted to know if it was permissible for them to lend their car to another person to use in exchange for that person lending them money on the condition that when they paid the money back they would get their car back. They also wanted to know if the car was damaged what kind of compensation would they be able to receive from the person they loaned the car to. Jazakamullahu Khairun.
Answer:
Wa Alaikum As Salaam,
The person who borrowed the money from the other, may leave his car as a security or ‘Rahn’ which gives the lender the assurance that the monies borrowed will be paid back. In this case, when the monies are returned, the car will be released to the borrower. In this situation, the car which has been placed as a security cannot be used by the lender, even though the borrower may have granted him permission to do so.
The books of Islamic jurisprudence have clearly stated that the mortgaged property (that which has been placed as a security) cannot be used by the one in whose possession it has been placed (i.e the mortgagee), even though the mortgagor had given consent to use it. (Fatawa Haqaniya vol. 6 pg. 227; Fatawa Mahmoodiyah vol. 24 pgs. 90,91).
When this guideline is followed, the issue of compensation in case of ‘damage’ will not arise. However, if it is not followed and the car becomes damaged, then many problems and disputes will arise as to how much compensation will be due and who will be responsible for the damages. It is in order to eliminate such problems and disputes, the above mentioned guideline has been given with respect to an item/property that is left as a form of security for something which has been borrowed by someone.
It should be understood also, that an item placed in a security should be equal or similar in value to that which has been borrowed.
And Allah Knows Best.
Mufti Waseem Khan.
8/10/2014