Ar Rahn

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OBJECTIVES: After completing this chapter, students should be able to: 1. Understand the concept of Al–Rahn in Islam. 2. Appreciate the benefits of Al–Rahn in securing loan transactions 3. Apply their understanding to the modern business practices.

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Al-Rahn (Pawning)
DEFINITION
Literally: Fixed, permanent and continuity; or detained, confined, prison and hostage Translated in English as pledging, pawning or mortgage {[But1] every human being will be held in pledge for whatever he has earned} 2(At-Tur: 21) {[On the Day of Judgement] every human being will be held in pledge3 for whatever [evil] he has wrought} (Al–Muddaththir: 38) Technically: Rahn is to make a property a security in respect of a right of claim, the payment in full of which from that property is permitted4 or Possession offered as security for a debt so that the debt will be taken from them in case the debtor fails to pay back the due money.

Rahn is classified as a contract under the category contract of security or contracts pertaining to authentication The purpose of Rahn is to convince the creditor that the debt will not simply disappear or vanish in case of default payment on part of the debtor.

The verse begins with {And as for those who have attained to faith and whose offspring will have followed them in faith, We shall unite them with their offspring; and We shall not let aught of their deeds go to waste: ….} – implying that the righteousness of their children increase the merit of the parents. 2 The righteousness of the parents cannot absolve their offspring from individual responsibility (Muhammad Asad page 808) 3 detained, confined and hostage 4 THE MEJELLE, page 107; The Other Press 1

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This is because, in case of non-payment, the pledged property will be sold or auctioned and the proceeds will be taken by the creditor to compensate for the losses as a result of the bad debt. However, the creditor is only entitled to the total amount owed to him by the debtor and the balance will be returned back to the owner of the pledged property (the debtor)

EVIDENCE
Quran: {And if you are on a journey and cannot find a scribe, pledges [may be taken] in hand: but if you trust one another, then let him be conscious of God his Sustainer}. (Al-Baqarah: 283) Even though the above verse highlighted the legitimacy of Rahn for travelers during their journey, majority of the jurists including Syafie, Malik, Abu Hanifah and Ahmad had actually concluded that the ruling is also applicable and relevant to those who are not traveling and are residing or staying in a certain location. Only Mujahid and Daud suggested that Rahn is only permissible during the journey based on the above verse. The verse draws our attention to the travelers because under normal circumstances, voyagers would find it difficult to find writers that could document their debt transaction during their voyage. It does not also indicate that if the debtor can find any writer, they cannot pledge their property since the evidence from the Sunnah had proven otherwise. The verse actually intents to guide the people on how to secure and authenticate their debt in a simple way in case they cannot find any writer at all.5 Hadith: Narrated by Aishah (r.a) to the effect that: “The Prophet (s.a.w) had bought some food from a Jew, and he (s.a.w) pledged to him his steel armour.6 Narrated by Anas (r.a) to the effect that: The Prophet (s.a.w) had pledged his steel armour to a Jew in Madinah, and in return he (s.a.w) took from him some wheat for his family7.

Ijma: The Muslim jurists had unanimously agreed on the legitimacy of the rahn contract especially because it had its origin in evidences found in both the Quran and Sunnah.8

WAHBAH AZZUHAILY; 6:4209 Reported by al-Bukhari and Muslim 7 Reported by al-Bukhari, Ahmad, Nasa’I and Ibnu Majah 8 WAHBAH AZZUHAILY; 6:4210 5 6

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PILLARS OF RAHN
1. 2. 3. 4. 5. Rahin (pledgor) – A person who gives a Rahn or the debtor...
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