Riba case pending before Shariat Court since 2002

ISLAMABAD: Initially decided by the Federal Shariat Court in 1992, Riba case has been pending before the Federal Shariat Court (FSC) since 2002 mainly because of successive governments’ reluctance inflating the interest payments beyond 80 per cent of country's net receipt of income in the year 2020-21.

The case has been pending since June 24, 2002, when civil Shariat review petition No 1 of 2000 filed by the United Bank Limited was allowed. The November 14, 1991 judgment passed by FSC the declaring Riba as un-Islamic and the December 23, 1999 judgment passed by Supreme Court's Appellate Shariat Bench upholding the Shariat Court's 1992 order, were set aside by the Supreme Court during Musharraf tenure.

Riba's case was remanded back to the FSC for determining the issue afresh based on a few points. These cases were remanded back to Federal Sharia Court with four major points: (a) Jurisdiction of the FSC, (b) Hurdles in Practical Implications of the judgments, as raised under the affidavit of Ministry of Finance and State Bank of Pakistan, (c) Observations related to definition and interpretations of Riba including distinguishing legal and moral aspects of Riba, Inflation, and Indexation of modern time, (d) errors floating on the surface of record in the judgment dated of December 1999.

The FSC saw many judges during these two decades, but the Riba case remained undecided with most judges taking not much interest in deciding the case.

Sources associated with the case said the FSC had asked for the experts' opinion from all the relevant parties for Riba definition and prohibition. Many parties submitted their rejoinders before the previous first constituted Bench. The bench decided to have arguments on the subject after finalizing its decision related to Jurisdiction.

The then Attorney General Anwer Mansoor Khan, during his arguments, confirmed that the FSC has jurisdiction.

On a parallel basis, during 2020, the FSC had also raised seven questions with the objective to assess the performance of the Government of Pakistan for the elimination of "interest". The questions were related to the performance of Islamic Countries for promoting Islamic Banking, Islamic Financial System, and how these systems operate.

The FSC also asked the government of Pakistan to inform the court on steps taken by the State Bank of Pakistan for promoting Islamic Banking. The court, though indirectly, also asked about the status of elimination of Riba and government’s future framework/timelines in this respect.

The FSC also asked about the response of various international lending institutions in providing financing on Islamic principles. It also asked for the latest status of compliance of the Commission for Transformation of Financial System (CTFS) for which two task forces were created in the Ministry of Finance and Ministry of Law. The court also sought the opinion of the Shariah Board of the State Bank of Pakistan (SBP) on the interest-free banking transactions. The Court had asked for the expert opinion from the economists.

On requests by the SBP lawyers and the Deputy Attorney General of Pakistan, the Court provided extensions in Riba case for several times. The sources said the answers to the seven questions from the government and the SBP were pending until September 30, 2021.

On September 30, 2021 hearing, Attorney General Khalid Javed Khan again sought more time from the Court to submit the answers to the seven questions. Referring to the order sheet, these sources said that except Mr. Shahzad Shaukat, Chartered Accountant, no one had submitted replies to the questions raised.

Jamaat-e-Islami is reportedly taking keen interest in getting the case decided, and in the last hearing a few days back, the JI Amir Sirajul Haq also made his appearance.

In a recent hearing and following an objection raised by JI's ex-Senator Professor Ibrahim on extension, the FSC Chief Justice replied that he was giving more time to the Attorney General so that they do not claim in the future that the time was not given to them to prepare the answers to the questions.

The sources said that it has been over a year that the SBP and the federal government have not submitted their remarks for the seven questions, though they did submit a rejoinder to discuss FSC's jurisdiction with a view that was different from the former Attorney General Anwer Mansoor Khan's.