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Qarz-e-Hasna Loan Appeal Judgment

1) The appellant challenged the trial court's decree ordering him to repay Rs. 2,30,000 to the respondent. 2) The trial court ruled in favor of the respondent, finding that the money was a loan despite being termed "Qarz-e-Hasna" (interest free loan). 3) The appellate court dismissed the appeal, finding that the Quran does not allow Qarz-e-Hasna between individuals, and the transaction was evidenced by signed documents showing it was a loan.

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86 views7 pages

Qarz-e-Hasna Loan Appeal Judgment

1) The appellant challenged the trial court's decree ordering him to repay Rs. 2,30,000 to the respondent. 2) The trial court ruled in favor of the respondent, finding that the money was a loan despite being termed "Qarz-e-Hasna" (interest free loan). 3) The appellate court dismissed the appeal, finding that the Quran does not allow Qarz-e-Hasna between individuals, and the transaction was evidenced by signed documents showing it was a loan.

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ahmer
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H C J D A 38

JUDGMENT SHEET
IN THE LAHORE HIGH COURT
RAWALPINDI BENCH, RAWALPINDI
JUDICIAL DEPARTMENT

Regular First Appeal No.177 of 2011.


(Muhammad Bashir versus. Chaudhary Abdul Rasheed)

J U D G M E N T

Date of hearing. 20.02.2017

Appellant by Mr. Haroon Irshad Janjua, Advocate

Respondent by Mr. Muhammad Kashif, Advocate

IBAD-UR-REHMAN LODHI J.:- By means of this appeal, the


appellant has challenged the decree dated 12.07.2011 granted in favour
of the respondent in his suit filed under Order XXXVII C.P.C. for
recovery of Rs.2,30,000/- by the Additional District Judge, Chakwal.

2. In the plaint, the plaintiff/present respondent had come forward


with the plea that loan facility of Rs.2,30,000/- was extended by him to
the appellant and such deal was named as Qarz-e-Hasna. A pronote and
receipt of such loan facility were also separately executed on
25.07.2008, but on account of failure on the part of the
defendant/present appellant to repay the same, the plaintiff/present
respondent had to file the referred suit for recovery of amount of
pronote. The plaintiff, when appeared in the witness box as PW-1, has
again deposed that the amount of Rs.2,30,000/- was given by him to the
defendant as Qarz-e-Hasna. The learned trial Judge after recording
respective evidence of the parties proceeded to decree the suit of the
plaintiff as prayed for by means of impugned judgment and decree dated
12.07.2011.
Regular First Appeal No.177 of 2011. 2

3. When learned counsel for the appellant started arguments on the


appeal, the learned counsel for the respondent/plaintiff was directed to
demonstrate as to what would be the consequential effect if admittedly
some amount changed hands and the person extending such financial
facility in favour of the other one call such deal as Qarz-e-Hasna and
what would be the legal consequences if such amount is demanded back
by the creditor.

Learned counsel for the appellant by placing reliance on cases


titled “Dr. M. ASLAM KHAKI versus Syed MUHAMMAD HASHIM and
2 others” (PLD 2000 SC 225) (Shariat Appellate Jurisdiction),
“MUHAMMAD ANWAR WAHLA versus MUHAMMAD TARIQ TUNG”
(2002 CLC 1779), “HABIB BANK versus Messrs QAYYUM SPINNING
LTD.” (2001 MLD 1351) and “BADSHAH JAN versus ALLAH DITTA
SETHI and others” (PLD 2013 Islamabad 39) has submitted that Qarz-
e-Hasna is a loan repayable at borrower’s convenience and the same
cannot be recovered unless the borrower is in a position to repay the
same and that it is a loan given on compassionate ground free from
interest, mark-up or service charges and repayable if and when the
borrower is able to pay.

4. In comparison whereof, learned counsel for the


respondent/plaintiff with reference to Ayat No.177, 245, 282 of Sura
Baqra, Ayat No.12 of Sura Maida, Ayat No.18 of Sura Al-Hadeed,
Ayat No.17 of Sura Taghabun, Ayat No.20 of Sura Muzammal, as also
Tafheem-ul-Quran by Moulana Syed Abul-Aala Modoodi and Tadabar-
e-Quran by Moulana Ameen Ahsan Islahi has submitted that term Qarz-
e-Hasna in fact is one, used by Allah Almighty in the Holy Quran and
wherever this term is used, it denotes to a loan given by the creature to
the Creator and nowhere the term Qarz-e-Hasna is used as a fiscal
transaction in between two persons amongst creature and such Qarz-e-
Hasna mainly consists on Aml-e-Salah and Sadqa Jaria and return of
Regular First Appeal No.177 of 2011. 3

said Qarz is left on Almighty Allah Raheem-o-Kareem on the day of


judgment.

5. The Holy Quran is the basic and primary source of law and it is
complete code of life. In case of any controversy in any matter, one has
to recourse to Holy Quran first and in case of any ambiguity, then to
other sources of law. The word Qarz-e-Hasna is not coined by anybody,
rather it is from Allah Himself and is found in the Holy Quran itself as
referred to hereinabove by learned counsel for the respondent during
arguments. For ready reference, the verses revealed in Holy Quran in the
referred Suras alongwith its translation and elucidation/explanation by
the learned authors of referred Tafseer are reproduced herein below:-
Regular First Appeal No.177 of 2011. 4
Regular First Appeal No.177 of 2011. 5

From above verses, one can imagine that the almighty Allah, who
can create anything by just saying “Kun”, is asking humans to give Him
loan. Hence, anything that we spend in the way of Allah, in fact, is
bestowed by Him. It is only because of His graciousness that He calls it
a loan that we spend it in His way and He promises to return it to us in
manifold. When He is asking for loan, it does not mean the loan that we
get from some individual or bank for our needs, rather “Qarz-e-
Hasna/goodly loan” signifies whatever is given to another for selflessly
and absolutely pure motives with the belief that he shall get the reward
in the next world. The stipulation, however, is that the loan should be a
“goodly” one, that is, it should not be tainted with selfish designs and it
should be given for the sake of Allah, for the purposes of pleasing Him.

In view of above discussion, it is, thus, declared that term Qarz-e-


Hasna is not available for a loan to be extended by a person in this
world to another person.
Regular First Appeal No.177 of 2011. 6

6. Further in this particular case, although the basic transaction was


termed in the plaint and evidence as Qarz-e-Hasna, but at the same time,
such transaction was reduced in writing in the shape of pronote and
receipt showing such fiscal transaction in between the parties. The
execution of pronote although has been denied by the defendant/present
appellant, but both the documents Exh.P-1 and Exh.P-2 are shown to
have been signed by Muhammad Bashir defendant/appellant. The
signatures have been denied by Muhammad Bashir, but not only the
learned trial court, but this Court also obtained his signatures in the open
Court and, while comparing the same with the signatures available on
the referred documents, this is the consensus that both the documents
were duly signed by Muhammad Bashir defendant/appellant.

While apprehending the dismissal of the appeal and maintaining


the decree granted by the learned trial court, the appellant, who is
present in person alongwith his learned counsel requests for return of the
decretal amount in some easy installments in view of the present
financial constraints being faced by him.

With the consent of the decree holder/respondent herein, the


decretal amount of Rs.2,30,000/- is, thus, allowed to be paid by the
defendant/appellant/judgment debtor by means of monthly installments
of Rs.7500/- each per month and first installment in that respect will be
made on or by 01.03.2017. It is also agreed in between the parties that
by every first date of each month, the amount of Rs.7500/- as
installment will be paid by the judgment debtor/appellant/defendant by
depositing the same in Bank account No.0010018681740017 of the
respondent/plaintiff in the suit being maintained at Allied Bank Limited,
Talagang Road, Chakwal having Branch Code No.0060 and any single
default in this regard would tantamount to forthwith and lump sum
recovery of the remaining decretal amount and for that purpose, learned
Executing Court, if approached, will be at liberty to proceed against the
judgment debtor/appellant without notice and without adopting the
Regular First Appeal No.177 of 2011. 7

coercive measures including forfeiture of bank guarantee furnished by


him with the learned Executing Court in compliance with direction of
order dated 20.09.2011 passed by this Court, when this appeal was
admitted to regular hearing.

7. Before parting with this judgment, this Court extends profound


gratitude to Mr. Muhammad Kashif, Advocate for the respondent, who
rendered his valuable assistance to the Court in reaching a just decision
on such intricate question.

8. With these observations, this appeal having no force is dismissed.

Judge

Approved for reporting.

Judge

*Haider Shah*

Common questions

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'Qarz-e-Hasna' in the court case was interpreted based on Islamic teachings and jurisprudence. The appellant's counsel argued that Qarz-e-Hasna is a loan repayable at the borrower’s convenience and free from interest, as sourced from Islamic jurisprudence cases . Conversely, the respondent's counsel referenced Quranic verses and interpretations by Islamic scholars, asserting that Qarz-e-Hasna denotes a loan given to Allah, characterized by altruistic intentions and not between individuals . The Court considered these arguments but ultimately focused on the written agreement (pronote) that indicated a personal loan transaction .

Islamic concept of Qarz-e-Hasna, as detailed in the sources, is a loan given selflessly, expecting rewards from Allah in the hereafter, and is not subject to interest or strict repayment terms. It is intended as a charitable act between the giver and Allah, not typically a transaction between two individuals . In contrast, conventional loans involve formal agreements and are legally enforceable between individuals or entities with specified interest rates and repayment schedules .

The court recognized religious interpretations of Qarz-e-Hasna as referrable to transactions with Allah for altruistic purposes but chose to enforce legal principles based on documented contractual obligations. The ruling emphasized the legality of the pronounced written agreement (pronote) and upheld its enforceability as a fiscal transaction between individuals, thus giving precedence to practical legal frameworks over doctrinal arguments . This approach respected religious tenets but prioritized definitive legal evidence in civil disputes.

Opposing counsels cited Quranic verses and religious interpretations to frame Qarz-e-Hasna respectively. The respondent’s counsel argued based on Tafheem-ul-Quran and Tadabar-e-Quran that Qarz-e-Hasna is a divine concept involving a selfless loan to Allah, emphasizing charitable intent rather than legal enforcement . In contrast, the appellant's counsel referenced legal interpretations from Islamic jurisprudence cases, emphasizing the personal nature of Qarz-e-Hasna as a loan given compassionately and only recoverable when feasible for the borrower .

The court facilitated a compromise by allowing Muhammad Bashir to repay the decretal amount of Rs.2,30,000 in monthly installments of Rs.7500, beginning on 01.03.2017 . This arrangement required timely deposits into the respondent’s bank account and stipulated that any default could lead to lump sum recovery actions. This approach was mutually agreed upon to address the appellant's financial constraints while ensuring the respondent's rights to recovery .

The court enforced the repayment based on the existence of a written agreement in the form of a pronote, which legally documented the transaction as a loan between two individuals. Despite the term Qarz-e-Hasna being used initially, the court focused on documented evidence presented by the respondent, which established the loan's obligatory repayment . The court also considered the appellant’s attempt to deny signatures but verified their authenticity through comparison in court, solidifying the basis for enforcement .

The court instructed that any default on the installment payments could result in the immediate and full recovery of the remaining amount without further notice. The executing court could proceed against the debtor using coercive measures, including the forfeiture of a bank guarantee previously furnished, ensuring stringent adherence to the repayment schedule . This directive was established to underscore the seriousness of maintaining the agreed repayment terms.

The court verified the authenticity of the signatures by obtaining samples directly from Muhammad Bashir during proceedings and comparing them to those on the disputed pronote and receipt. This process led to the consensus that the signatures matched, allowing the court to uphold the lower court's decree favoring the repayment enforcement . This procedural step was critical in dismissing claims of fraud or duress regarding the loan agreement's validity.

The pronote served as a pivotal piece of evidence in the court's decision, documenting the loan amount, terms, and the signatures of both parties. Its existence and authenticity, confirmed by signature verification, fortified the respondent's claim, making it legally enforceable despite initial arguments that the transaction was a Qarz-e-Hasna . The court viewed it as a binding agreement, emphasizing its importance over the Qarz-e-Hasna claims based on oral assertions .

The respondent's counsel utilized Quranic verses, specifically Ayat No.177, 245, 282 of Sura Baqra, Ayat No.12 of Sura Maida, and others from Sura Al-Hadeed, Sura Taghabun, and Sura Muzammal, supported by interpretations from Tafheem-ul-Quran and Tadabar-e-Quran . These sources were significant because they framed Qarz-e-Hasna as a non-fiscal charity between humans and Allah rather than a transactional obligation between individuals, which aimed to contextualize the loan in a spiritual rather than commercial lens.

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