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Petitioner: IRSHAD H. KHAN VS Respondent: Mrs. PARVEEN AJAZ
Court Name: Sindh High Court Judge(s): Tanzil-ur-Rehman Title: IRSHAD H. KHAN vs Mrs. PARVEEN AJAZ Case No.: Suit No, 162 of 1980 Date of Judgment:1987-06-11 Reported As: PLD 1987 Karachi 466 Result: Suit decreed
JUDGMENT
JUDGMENT This is a suit for recovery of Rs,1,90,000 filed, by. The plaintiff in March 1980, on the basis of demand promissory note dated 25-1-1980 executed by the defendant in favour of the plaintiff. The suit was first decreed ex parte vide order dated 22-4-1981, whereafter, on an application filed by the defendant under Order IX, Rule 13 read with Section 151, C.P.C. The judgment and decree was set aside by a learned Single Judge of this Court and the defendant was granted leave to defend the suit. Since the execution of the promissory note was not denied by the defendant, only one issue was framed as to "Whether the defendant executed the demand promissory note dated 25-1-1980 under coercion or of her own free will"? 2. The defendant examined herself on Commission appointed by the Court. In her examination-in- chief, her entire case on the question of coercion was that the plaintiff, alongwith 2 or 3 persons, came to her house on or about 25-1-1980 and informed her that her husband had taken Rs,1,90,000 from the plaintiff. This amount was, according to her, demanded from her. Alternatively, she was asked to sign two blank papers bearing some stamps and a third paper which according to her was blank. She further stated that the persons accompanying the plaintiff identified themselves as "men of police" and she was informed by all of them that if she did not sign those papers, her husband would be arrested and his name would appear in the newspapers. The defendant further stated that her husband was, at that time, out of Karachi and, therefore, on the next day, she visited the office of the Inspector-General of Police, Sind with her driver and submitted an application there regarding what had happened at her house, a day earlier. 3. In her cross-examination, the defendant admitted that she had not mentioned in the pleadings or any of her affidavits filed in the above suit that she had signed two papers bearing stamps and
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one blank paper at the direction of the plaintiff and other persons accompanying him on 25-1-1980 or that she had made an application in relation to the said visit of the plaintiff to her house to the Inspector-General of Police, Sind. She, frankly admitted her signatures on 2 letters dated 25-1-1980 (Exh.6/7) and earlier dated 23-1-1980 (Exh.6/6). She also admitted that neither in her written statement nor any affidavit she mentioned that her husband was out of Karachi at the time of the alleged visit of plaintiff to her house on 25-1-1980., 4. The plaintiff examined herself and deposed that he was a retired Director of the Institute of Management, Government of Pakistan, Karachi. He had booked 2 cars, one for his wife and the other for his brother-in-law with the husband of the defendant who took the money from him but failed to deliver them. Subsequently, he (the defendant's husband) gave 2 cheques to the plaintiff, one for Rs,1,09,000 and the other for Rs,59,000 in re-payment..-But these cheques (Exhs.6/2 to 6/5) were dishonoured by the Banice According to the plaintiff, when the husband of the defendant was informed about the dishonoured cheques, he offered to mortgage house No,3/F/3 in Block No,8, Kehkashan Clifton, Karachi and it was in this regard that defendant wrote the letter dated 23-1-1980 to the Developers with a copy to the plaintiff (Exh.6/6). However, the Developers did not agree to the mortgage of plaintiff's house in question as no lease had been executed in respect of the said house till then. It was against this background that the defendant executed the promissory note Exh.6/1 and simultaneously wrote another letter dated 25-1-1980 (Exh.6/7) to the Developers. The plaintiff specifically deposed that all these documents were executed by way of a "mutual settlement". It is noteworthy that the entire case of the plaintiff regarding the background against which the documents in question were executed by the defendant went unchallenged in cross- examination. Not even a suggestion was put to the plaintiff to the effect that his case was false or fabricated or that he had got the demand promissory note in question executed from the defendant under coercion. 5. The defendant categorically stated in her cross-examination that at the time of the said visit of the plaintiff to her house on 25th January, 1980, her husband was out of Karachi and remained so for four or five days, This is belied by the contents of paragraph 5 of the bail application filed by her husband in the Court of District and Sessions Judge, Karachi (Exh.6/9) wherein he stated that he was present in his house with his wife i,e, the defendants at the time of the said visit of the plaintiff alongwith three other persons. 6. The plaintiff, moreover, had a reason to threaten the defendant about the arrest of her husband who is said to have committed an offence for issuing cheques, which were dishonoured, knowing it fully well that he had no cash balance with the Bank. In fact, her husband seems to have been arrested and enlarged on bail by the learned District and Sessions Judge, Karachi. Coercion is defined in Section 15 of the Contract Act, as under:- "15.--'Coercion' is the committing, or threatening to commit, any act forbidden by the Pakistan Penal Code or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Explanation.--It is immaterial whether the Pakistan Penal Code is or is not in force in the place where the coercion is employed." It is thus no coercion if the plaintiff, who is alleged to have been defrauded by the defendant's husband, informed the defendant that her husband was likely to be arrested and his name was likely to appear in the local newspapers, as he had defrauded the plaintiff of as substantial a sum of money as Rs,1,90,000. It is not the defendant's case that she was made to sign for an amount which was in excess of B what her husband owed to the plaintiff, nor her case is to the effect that the plaintiff threatened to commit any offence against her husband or herself or her property together with two or three other persons who identified themselves as police officers. The threat of criminal prosecution against the husband of the defendant, as alleged, did not amount to coercion
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in view of a Division Bench judgment of this Hon'ble Court reported as: Kazi Noor Mohammad v. Pir Abdul Sattar Jan PLD 1959 Kar. 348. Relevant portion reads as under:- "In order to prove coercion, it must be shown that the creditor applied pressure upon the debtor to procure his consent. The mere fact that an agreement was entered into in fear of criminal proceedings is not sufficient to avoid the agreement on the ground of coercion. I am of the opinion that simply because a creditor threatens his debtor to involve him in a criminal case, it will not be coercion if there be some basis for such a prosecution. Even in England where the law is much more stringent this view holds ground. Cotton L.J. In (1882) 10 Q.B.D. 572 at page 576 observed: "A threat to prosecute is not of itself illegal and the doctrine contended for does not apply, where a just and. Bona fide debt actually exists, where there is a good consideration for giving-a security, and where the transaction between the parties involves a civil liability as well as, possibly, a criminal act. In my opinion a threat to prosecute does not necessarily vitiate a subsequent agreement by the debtor to give security for a debt, which he justly owes to his creditor." 7. As discussed above the case does not fall within the scope of Section 15 of the Contract Act. My finding on the issue, therefore, is that the Promissory Note was not signed under coercion. It was signed as a mutual settlement. 8. In the above suit the payment of interest at the rate of 15% per annum is stipulated in the promissory note itself. The decree is prayed for the principal amount of Rs,1,90,000 together with interest at the rate of 15% per annum till the date of final payment of the decretal amount. The suit after hearing the arguments of the learned counsel for the parties was reserved by me for judgment for 31-5-1987. I must say that none of the counsel, during the course of their arguments, adverted to the question of interest. While I was dictating the judgment and came to the last part of it I found that interest has also been prayed for. I, therefore, issued notice to the learned counsel for the parties to .Address me on that question too. Since the question of interest, in view of my earlier order dated 16-4-1987, passed by me in Suit No,519 of 1984 (Bank of Oman v. Eastern Trading Company Ltd PLD 1987 Kar. 404 did assume importance of a general nature, I also gave notice to the Standing Counsel for the Federal Government and the Advocate-General of Sind. 9. In response to the above, learned counsel for the plaintiff appeared and submitted that he was entitled to interest by agreement as it is mentioned in the promissory note itself. 10. Mr. Mohammad Ali, learned Additional Advocate-General in response to the Court notice to Advocate-General Sind put in his appearance today (11-6-1987) in the above suit and submitted that the Objectives Resolution under Article 2-A is not a supra-Constitutional document. It was further submitted by him that this Court sitting on original side cannot decide the question as to the repugnancy of a law to the Constitution and, therefore, cannot strike down a law. According to him perhaps, it is the High Court exercising its extraordinary jurisdiction on Constitution side that the issue could be "digressed" and decided. No case-law was cited by him in support of these submissions. Since the above submissions have already been dealt with by me in my order dated 16-4-1987 in the case of Bank of Oman v. East Trading Company Ltd PLD 1987 Kar. 404, the submissions of the learned A.A.-G. Stand repelled. 11. It is regretted that I was not benefited with the arguments of Standing Counsel for Federal Government/Deputy Attorney-General of Pakistan though served with the notice. 12. I will now deal with the Injunction of Islam relating to the interest, as laid down in the Qur'an and Sunnah:- 13. The word "Interest", by and large, has now been accepted and is understood as Riba (See Stiengass English-Arabic Dictionary, Lahore, 1979, the word 'Interest'). The literal meaning of ribs is; increase'. It means "an addition, however slight, over and above the principal", and thus includes both usury and interest. (See: Lanes's Arabic-English Lexicon). This finds support from the best
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authorities on Arabic language like Imam Raghib Isfahani {{ARABIC TEXT}} and Zubaydi {{ARABIC TEXT}} Refer their Encyclopaedic works: Mufradat al-Qur'an {{ARABIC TEXT}} and Taj al-Arus. Therefore, Riba includes both 'usury' and 'interest', as known in English terminology. In legal sense, it is that excess amount which a "Creditor" settles to receive/or recover from his "Debtor", in consideration of giving time to the said debter for re-payment of his loan. Imam Tabri (d.310 A.H.) in Tafseer (Vol.III, P.64) commenting on the Qur'anic verse writes that:- {{ARABIC TEXT}} that is, Riba is that increase (financial) which an owner of valuable property (Mal) receives from his debtor for giving him time to repay his debt. Ibn Arabi in his noted work, Ahkam al Qur'an (Vol.1. P.103) has defined Riba, to be the name of every increase in lieu of which there is no property, (Mal). This is the definition which Allama Burhanuddin al-Marghinani (d.593 A.H) has also stated in his famous book, al-Hidayah (See Al-Hidayah, 'Qur'an Mahal, Karachi, Kitato al-Buu' {{ARABIC TEXT}}Sing Bai' (Sale) Chapter on Riba (Vo131 III, p.78), which reads as under:- {{ARABIC TEXT}} Riba, in law, signifies an excess (increase) in a(loan)contract in which such excess is stipulated as an obligatory condition on one of the parties, without any return, i,e, without any property (Mal), in exchange. (See Book XIV on Sale Chapter VIII on Riba or usury, Hadayah, English translation by Hamilton, Lahore, page 289) Imam Fakhrud-Din Al-Razi (d.606 A.H) in his well-known Tafsir al Kabir writes that the meaning of the word Riba is increase but it does not mean that to recover every kind of increase is Riba and is unlawful {{ARABIC TEXT}} ). The forbiddance of Riba relates to a special kind of contract which was known amongst the Arabs as Riba al Nasiyah i,e, increase on debt. (The other kind of riba called *Ribs al-Fadl" {{ARABIC TEXT}} is outside the scope of the present discussion). From the above, it can be easily concluded that Riba is not an increase simpliciter but in the eye of Shari'ah it is a special kind of increase, otherwise in Bai' (sale), there is an increase which is termed as profit, whereas Riba is the consideration or compensation for the period of re-payment of loan. Since this 'period' is not valuable property (Mal), its return has been declared as unlawful, whether it be money or any other thing. In other words, wherever there is money from the one Part and there is only grace period or deferment of the repayment of loan to the other, and for that a 'return' is stipulated, it is Riba. On a careful study of several forms of commercial activities and credit transactions, prevalent among Arabs during the period of Holy Prophet, a transaction which contains excess or addition over and above the principal amount of loan, which is pre-determined in relation to time or period to be conditional on the payment of that pre-detrained excess or ,.Addition, payable to the creditor (such a transaction containing the said elements) constitutes Riba and any sale, transaction or credit facility, in money or in kind has been considered to be a transaction of Riba, which is unlawful Haram {{ARABIC TEXT}} in territory of Islam, Dar al-Islam {{ARABIC TEXT}} , in Muslim Society. There is concensus {{ARABIC TEXT}} of the Muslim Jurists on it. 14. The word Riba in its various linguistic forms,, has been used at about 20 places (See: S.11-265, 275, 276, 278, 111: 130, IV: 161, XIII : 17, XVI, 92, XVII : 24, XXII : 5, XXVI : 18, XXX : 39, XLI : 39, LXIX: 10) in t' e Holy Qur'an. The relevant for the present( discussion are the following verses:- {{ARABIC TEXT}} "Those who live on usury will not rise (at Resurrection) but like a man possessed of the devil and demented. This because they say that trading is like usury. ' But trade has been sanctioned and usury forbidden by Allah. Those who are wanted by their Lord and desist will keep (what they have taken of interest) already, and those who revert to it again are the residents of Hell where they will abide forever. ' Allah takes away (gain) from usury, but adds (profits) to charity; and God does not love the ungrateful and unjust.
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' 0 believers, fear Allah and forego the interest that is owing if you really believe. ' If you do not beware of war on the part of Allah and His Apostle. But if you repent, you shall keep your principal. Oppress none and no one will oppress you. ' If a debtor is in want, give him time until his circumstances improve; but if you forego (the debt) as charity, that will be to your good, if you really understand. ' Have fear of the day when you go back to Allah. Then each will be paid back in full his reward and no one will be wronged." {{ARABIC TEXT}} ' 0 you, who believe, do not practise usury,- charging doubled and redoubled (interest): but have fear of Allah: you may well attain your goal., (Al-Imran 3:130) {{ARABIC TEXT}}} ' What you invest at usury in order to increase (your capital) on other people's wealth, does not find increase with Allah; yet what you give in alms and charity, seeking Allah, will be doubled. (Al-Rum 30:39) {{ARABIC TEXT}} (Because of the wickedness of some among the Jews and because they obstructed people from the way of Allah, we forbade them many things which were lawful for them; And because they practised usury although it had been forbidden them; and for usurping others' wealth unjustly. For those who are unbelievers among them we have reserved a painful punishment (Al-Nisa'. 4:160- 161). (Translation of the above versus has been reproduced from (Prof.) Ahmad Ali's "AI-Qurtan" a contemporary translation" (with the only substitution by Allah for God, by me). 15. It is stated in Al-Muntakhab fi Tafseer al-Qur'an al Karim, written by a Committee of the Qur'an & Sunnah of the Supreme Council of Islamic Affairs, Ministry of Auqaf, Arab Republic of Egypt that: {{ARABIC TEXT}} (Ribs stated in the verse (11-275) is a Riba prevalent among Arabs in pre-Islamic era and that is the increase in loans in lieu of period of time (granted to the debtor for repayment of loan), and that is unlawful (r-) whether it (ribs) be less or more). (P.66, footnote No,1 Surah II, Verse 275), ' Reference may also be made to Alkashshaf 'An Haqatiq Ghawamid al-Tanzi{{ARABIC TEXT}} by Imam, Jadallah Mahmood bin mar al- Zam k hshari {{ARABIC TEXT}} A.H.) Vol. 1 pp. 319-323). 16. Muhammad Ali al-Sabyni (no, based in Sa'udi Arbia) in his Tafsir Ayat al-Ahkam {{ARABIC TEXT}} Damascus, 1397 A.H. 1977 A.C. Vol. 1 page 383 writes that the dictionary meaning of Riba is i,e, an absolute increase (without any attribute or qualification) qnd in Shari'ah it means{{ARABIC TEXT}} the increase or excess which the credit&' Cakes from his debtor in lieu of the deferred period (for repayment of loan). 17. Syed Qutub Shaheed (may Allah have his infinite Mercy on him) of Egypt, in his notable work, Tafsir fi Zilal al-Qur'an (verses 275-81, Surah Al-Baqarah), has dealt with the question of Riba elaborately. In short, as stated by him "interest and Islam cannot1 remain together in a (Muslim) Society". An extract from the translation' of the above Tafsir reads: {{URDU TEXT}} (Reference may also be made to late Syed Abut Aga Maududi's book "Sud" Interest) Islamic Publication, Lahore, 1968, and his Commentary on the Qur'an, "Tafhim al-Qur'an" {{ARABIC TEXT}}Vol. 1, pp. 210-18, 287-88 and 422. Also see Ma'arif al Qur'an late Grand Mufti of Pakistan, Multi Muhammad Shaft', Vol. 1 pp.585-622. 18. There are also a number of traditions of the Holy Prophet which, forbid Riba. These traditions have been narrated by Imam Malik, Bukhari,--Miislim, Abu Daud, Tirmizi, Nasail, Ibn Majah, Ahmed I
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ibn Hanbal, Dar Qurtni and several other Traditionalists (Muhaddithin {{ARABIC TEXT}} in their Collections of Ahadith through various chains of authorities. Here I may refer to few of them: (i) Muwatta, Imam Malik ,ay) (Arabic-Urdu), Karkhana-i-Tijarat Kutub, Karachi, P. 575. Trans. By Professor Mr. Rahimuddin, published by Sh. Muhammad Ashraf, Lahore 1980, page 303 states the following Tradition. {{ARABIC TEXT}} (Zaid b. Aslam reported that interest in pagan times was of this nature: When a person owed money to another man for a certain period and the period expired, the creditor would say: You pay me the amount or pay the interest. If he paid the amount, it was well and good, otherwise the creditor increased the loan amount and extended the period for payment again). (ii) Al-Tarteeb wal-Bayan by Muhmmad Zaki Saleh, Vol.II Egypt 1374 A.U. = 1957A.C.p.234: states that: {{ARABIC TEXT}} (According to Jabir, the Holy Prophet cursed those who receive and pay interest and the scribe of the deed and those who bear witness to it and said they all are equal, (Muslim). (iii) Muslim has also reported from Abdullah Ibn Masud that the Holy Prophet cursed the receiver of interest as well as its giver, the scribe of the interest deed and the witnesses to it; and further said that they all are equal (in the act of committing sin). (Muslim). 19. Let .Me also refer to the last Sermon of the Holy Prophet in the presence of about a lac of his reverend J. Companions The following words of the Holy Prophet are very significant: {{ARABIC TEXT (The Holy Messenger of Allah, on his last Pilgrimage and in his last address, declared the prohibition of interest in these words: "Every form of interest (Riba) is cancelled; capital indeed is yours which you shall have; wrong not and you shall not be wronged. Allah has given his Commandment totally prohibiting interest (Riba). I start with the amount of interest which people owe to Abbas and declare it all cancelled. "He then, on behalf of his uncle, Abbas, cancelled the total amount of interest due on his loan capital from his debtor). 20. Dr. Hameedullah, based at Paris and widely respected for his piety and scholarship, in his book 'Muhammad Rasulullah (Salla-Ilahu alaihi wa sallam) Karachi, paragraph 34, tracing the history of Ka'ba and writing about its repairs/construction/reconstruction at one point of time, somewhere in 605 A.C., when on a tempestuous day sparks of fire were thrown by the wind on the curtains of the Ka'ba, which caught fire and the building was burnt out, and tempest was followed by torrential rains, and these dealt the final blow, so that the building of the Ka'ba crumbled down in heaps, writes that "Contributions were asked everybody in the town, and it was solemnly announced that for the sacred building only honest money should be offered; prostitutes and usurious peoples were asked not to contribute anything" (underlining is mine). This implies that even among the pagans of Arabia, in those dark days of human civilization, usury (interest) was considered to be the money earned by dishonest means. I may also refer to paragraphs 144 and 226 of the same book. In a general meeting of all the population, both Muslim and non-Muslim, convened by the Holy Prophet, a Constitution for the State in Madina with Buffer states around, was reduced into writing, constituting the earliest written Constitution of a State, promulgated by its Head in the world. The Christians of Najran who were highly organized religious people and were more fanatically attached to their faith, sent a delegation to Madina consisting, among others, of a bishop and a vicar (second Priest). They voluntarily acceded to the said Muslim State of Madina, as non-Muslim subject, and obtained a Charter which conferred on them autonomy, both religious and administrative. It was covenanted that "they need no more pay the interest to their creditors, but only the capital of the loans. Naturally he (the Prophet) asked them not to take interest themselves either in future. All was reduced to writing, and the document has come down to us".
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21. Analysing the material on the Holy Qur'an and Sunnah of the Holy Prophet, referred to above, forbidding Muslims to devour interest, it is noticed that as the interest-bearing transactions were prevalent among the Arabs for a long time and it had taken roots in their economic and social life, the prohibition of interest came gradually, The injunction as contained in S.XXX : 39 of the Holy Qur'an is of an advisory nature, on moral plane, that interest, in reality, does not increase the wealth, but it is the charity, seeking Allah's pleasure, that increases manifold. The other injunction (S.III : 12 forbids Muslims to take compound interest (usury), in order to be dutiful to Allah the Almighty, so that real prosperity may come to them. Some people thought that 'trade' and 'interest' resembled each other. By verses 275-76 of S.II, they were condemned by saying that Allah has permitted 'trade and forbidden 'interest'. Then came the admonition that whoever devours interest will stand like the one whom Satan has bewildered and maddened by his touch. Then they were ordered to desist from taking interest and he who abstains from taking interest shall be pardoned for his past actions, but he who repeats the same shall go to Hell, where he shall abide forever. Then came an absolute injunction to Muslims to forego interest, if they really believe in Him and then came the warning, that if you do not forego interest, which has already accrued to you, and desist from taking it any forever, beware of war on the part of Allah and His apostle. This wag, in fact, implies that whoever wants to be in peace with Allah and his apostle he is to desist from taking interest, otherwise state of war with Allah and His Prophet continues. Then came another injunction to be satisfied with receiving back the principal amount, followed by an advice that if the debtor is in difficulty, time be given to him (S.I1:277-80). At the end, (S.II:281), there is a reminder to have fear of Allah and that when they will go back to Allah, on the day of resurrection, each one will be paid back for what he has earned in this world. 22. Those who are of the view that it is the interest doubled and…
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