An Assignment on

“Prohibition of Riba”
(PLD 2000 SC 225)

Submitted to

Dr. Naureen Akhtar

By

Hafiza Ramsha Sadiq

For the degree of

LLM
Roll no: 4 Session: 2020-2022

Gillani Law College,

Bahauddin Zakariya University Multan
Contents

I. Introduction.........................................................................................................................................3
II. Concept of Riba...................................................................................................................................3
A. What is Riba?............................................................................................................................3
B. Categories of Riba....................................................................................................................4
Riba al-Jahiliyya.....................................................................................................................................4
'Riba al-Fadl' or 'Riba-al-Sunnah'.............................................................................................................4
III. Brief history of the case...................................................................................................................5
IV. Objections raised before the Court.................................................................................................6
Preliminary objection:.............................................................................................................................6
First objection:.........................................................................................................................................6
V. Arguments on Objections raised by the Appellants.............................................................................6
VI. An Objective Study of the Constitutional Provision and Islamic Sources Dealing with Prohibition of
Riba 8
A. The Constitution of Pakistan............................................................................................................8
B. The Islamic law................................................................................................................................8
a) In Holy Quran...................................................................................................................................8
b) In Hadiths..........................................................................................................................................10
VII. Opinion of the Court on Objections raised by Appellants..............................................................10
VIII. Conclusion.....................................................................................................................................16
 I. Introduction

In 1992, the Pakistani Federal Shariat Court (FSC) declared riba un-Islamic. The Shariat
Appellate Bench (SAB I) of the Pakistani Supreme Court upheld this decision in 1999. This
decision of Shariat Appellate Bench of supreme court is considered as one of the most important
judgements in constitutional history of Pakistan. Through this Judgement the Shariat Appellate
Bench declared Interest in all kinds as illegal and a violation of Quran and sunnah, resultantly
All the laws that dealt with or justified Ribah/interest were also declared null and void.
Consequently various organs of government were ordered to bring our existing laws and statutes
in conformation with the orders of Allah and sayings of Holy Prophet(S.A.W).

In this paper I will be discussing the various arguments raised by the appellants against the order
of Federal Shariat Court and how those arguments were countered in light of Quran and Sunnah

II. Concept of Riba

A. What is Riba?
Literally: increase, addition, expansion or growth
Technically: a predetermine excess or surplus over and above the loan received by the creditor
conditionally in relation to a specified period
Riba in the Shari`ah: It refers to the ‘premium’ which must be paid by the borrower to the
lender along with the principal amount as a condition for the loan or for an extension in its
maturity.
In Fiqh terminology: Riba means an increase in one of two homogeneous
equivalents being exchanged without this increase being accompanied by a return.
Technically (2 definition depending on the nature of transaction):
 Trade transaction
 Loan transaction
 Trade transaction: Unlawful gain derived from the quantitative inequality of the
counter-values in any transaction purporting to effect the exchange of 2 or more species
which belong to the same genus(category) and are governed by the same efficient cause.
 Loan transaction: A predetermined excess or surplus over and above the loan received
by the creditor conditionally in relation to a specified period.
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B. Categories of Riba

Riba al-Jahiliyya
"The Riba al-Jahiliyya was a transaction whereby a person used to sell a commodity for a price
payable at a future specific date, thereafter when the date of payment came and the buyer was not
able to pay, the seller used to increase the amount due and give him more time."

 The seller used to keep on increasing the amount in exchange of additional time given to
the buyer.
 Also Known As Riba Al Quran and Riba Al Nasiah.

'Riba al-Fadl' or 'Riba-al-Sunnah'

It means that the quantity on both sides must be equal to each other and if the quantity of any one
side is more or less than this transaction is also a Riba transaction, because in the tribal system of
Arab these commodities were used as money. However, this transaction was termed as riba by
the Holy Prophet(PBUH) and this meaning was not covered by the term ' riba al-Jahiliyya '.
Therefore, it was called as ' riba al-fadl ' or ' riba-al-sunnah '.

Classifications of the commodities:

 Medium of currency: Gold and Silver

 Staple foods: barley, wheat, dates and salt

''Gold for gold, silver for silver, wheat for wheat, barley for barley, date for date,
salt for salt, must be equal on both sides and hand to hand. Whoever pays more or demands
more (on either side) indulges in Riba''.

I. Riba is considered as one of the elements of oppression leading to an

II. economic system based on exploitation by the rich unto the poor.
III. Brief history of the case
According to Article 203D of the Constitution of Pakistan 1973,
“The Federal Shari ‘at Court has power to examine and decide questions
on whether or not laws being enacted by the federal or provincial
governments are repugnant to the injunctions of Islam”
While exercising such powers, the Federal Shari at Court (FSC) gave its verdict on riba in
November 1991 and ordered the government to adopt the necessary measures for eliminating
interest from the economy of Pakistan by 30 June 1992.
In response, the government and financial institutions lodged appeals against the FSC judgment
at the Shariat Appellate Bench of the Supreme Court of Pakistan. The appeals against the FSC
judgment remained pending at the SC for some years due to the lack of a full quorum of judges
to conduct hearings. After achieving its quorum in February 1999, the SC commenced hearing
the appeals, and declared its verdict on 23 December 1999.

As a consequence of this judgement, certain laws will cease to take effect from 31 March 2000,
some other laws from 31 July 2000, and all other laws permitting or condoning interest from 30
June 2001.

The Bench consisted of the following judges:

 Mr. Justice Khalil-ur-Rahman

 Mr. Justice Munir A Shaikh
 Mr. Justice Wajeehuddin Ahmad
 Maulana Justice Muhammad Taqi Usmani.

All these appeals arise out of the same judgment of the learned Federal Shariat Court dated 14
November 1991, whereby the Court has declared a number of laws of the country repugnant to
the Injunctions of Islam as they have provided for charging or paying interest, which according
to the findings of the learned Federal Shariat Court, falls within the definition of riba clearly
prohibited by the Holy Qur'an.

The basic issues involved in all these appeals being similar, all of them were heard together and
are being disposed of by this single judgment.

IV. Objections raised before the Court

The appellants challenged the impugned order of Federal Shariat Court and raised the following
objections:
Preliminary objection:
 Firstly, FSC acted beyond its jurisdiction because, according to Article 38(f)[10] of the
Constitution, only the Government has the power to regulate riba.
 Secondly, both the FSC and SAB faulted for not examining the FSC’s jurisdiction under
the relevant articles of the Constitution.
  Thirdly, FSC simply asserted its jurisdiction on the grounds that the Constitution
required the government to endeavor to eliminate riba as soon as possible, and the
government’s failure to act forced the court to step in.
 Fourthly, The SAB agreed, affirming that on initial review it did not “examine all the
jurisdictional aspects of the case.”
First objection:
 Generally, fault the FSC for not undertaking a nuanced linguistic analysis of the term
“riba.”
 For example, `petitioners argued that SAB I did not properly distinguish “usury,”
“riba,” and “interest.”
 Further, they argued that only that which is “doubled and multiplied” is prohibited,
whereas present-day banking in Pakistan is covered by the term bay’ (which refers to
lawful sale, business, or trade).

V. Arguments on Objections raised by the Appellants

st
1 Argument

The first approach to interpret the term riba, as adapted by some of the appellants, was that the
verses of the Quran prohibiting riba were revealed in the last days of the Prophet’s (Allah bless
him and give him peace) life - he did not have an opportunity to interpret them properly. So,
there is no proper definition of riba and the same falls in the area of mutashabihat (the verses
having ambiguity or confusion in their meaning).

2 Issues raised in such Argument

In his last days, Holy The Definition of Riba

Prophet (PBUH) did not Ambiguous
interpret Riba properly.

2nd Argument

The second line of argument runs on the basis that the word 'riba' refers only to the usurious
loans on which an excessive rate of interest used to be charged by the creditors which would
entail exploitation. As far the modern banking interest, it cannot be termed as 'riba' if the rate of
interest is not excessive or exploitative.

ISSUE Does the Word 'Riba' Only Refer to Excessive Interest?

3rd Argument
The third argument differentiates between consumption loans and commercial loans. The
excessive rate of interest charged on consumptive loans of the poor people is prohibited as it
amounts to injustice. The commercial loans are used for generating a profit so the interest
charged on them does not amount to riba as it is no injustice to the debtors. The appellants also
contended that the modern commercial loans were neither prevalent in the days of the Holy
Prophet (SAW), nor has the Holy Qur’an addressed them while prohibiting ‘riba‘.

A transaction’s validity is not based on a party’s financial

status
Doesn’t differentiate btw consumption and commercial loans
ISSUES
Commercial loans were common amongst the Arabs
Quran and not human reason sets the measure of injustice

4th Argument

The fourth argument was that the Quran prohibits Riba-al-Jahiliyya which means that after the
due date the creditor gave further time to the debtor on the condition of charging an increased
amount. If the increased amount is stipulated in the loan agreement, it does not constitute riba-al-
Quran. It is riba-al-fadl, prohibited by the Sunnah. And it is not haram but Makrooh.

Interest on bank loans is equivalent to Riba al Fadal which has not been
ISSUE prohibited by the Quran; the Quran only prohibits Riba al Jahiliyya
where the interest amount is imposed after the loan’s maturity.

5th Argument

Though modern interest-based transactions are covered by the prohibition of 'riba,' yet
commercial interest is the back-bone of the modern economy. Islam, being a practical religion,
recognizes the principle of necessity and permits eating pork in extreme situations for survival.
The same principle of necessity should be applied to interest-based transactions and the laws
permitting interest should not be declared repugnant to Islamic injunctions.

ISSUE Is Interest a ‘Necessity’?

VI. An Objective Study of the Constitutional Provision and Islamic Sources Dealing
with Prohibition of Riba
Before analyzing the above-mentioned arguments, let us undertake an objective study of the
provision of the Constitution and Islamic law about Riba.

A. The Constitution of Pakistan

Article 38 (f) of the Constitution of the Islamic Republic of Pakistan states that:

“the State shall eliminate Riba as early as possible.”

B. The Islamic law

Islam stands for establishing a just and economic system free from all kinds of exploitation.
In this section I will discuss the prohibition of riba from the two primary sources of Islamic
law, which are the Qur’an and the Sunnah.

a) In Holy Quran
Allah (swt) prohibited Riba in 4 different stages.

a) The First Stage:

“And whatever you give for interest to increase within the wealth of people
will not increase with Allah. But what you give in Zakat, desiring the countenance of Allah –
those are the multipliers.” (Quran 30:39)

In this verse, Allah hasn’t prohibited Riba directly but compares Riba with Zakat and charity.

Allah encourages the giving of Zakat by mentioning that Riba(usury) does not increase wealth
and it is not blessed but Zakat and Sadaqa increases and is blessed by Allah.

Purpose: to prepare the minds and hearts of believers for the future prohibition of Riba. It
recommends not to put the borrowers in a more difficulty by taking Riba but it is much better to
alleviate the burden of those in need [ the upper (giving) hand is better than the lower (taking)
hand].

b) Second Stage:
 “And their taking usury though indeed they were forbidden it and their
devouring the property of people falsely, and we have prepared for the unbelievers from
among them a painful chastisement.” (Quran 4:161)

In this verse, the term riba is used in the context of sinful acts of the Jews.

This verse declares the taking of riba (usury) as an iniquity because it consumes the property of
people falsely.

In this verse, riba is not directly prohibited but believers are advised not to disobey Allah’s
commandments because when Jews disobeyed and started indulging in Riba they went through
several calamities.

c) Third Stage:

“O ye who believe! Devour not usury, doubled and multiplied; but fear Allah; that
ye may (really) prosper.” (Quran 3:130)

This verse underlines the propensity of riba of becoming double and multiplying. So, this verse
prohibits the system of charging double and multiple interests.

d) Fourth Stage

The fourth phase is the grouping of verses which finally prohibit Riba.

“Those who devour usury will not stand except as stand one whom the Evil one
by his touch hath driven to madness. That is because they say: “Trade is like usury,” but
Allah hath permitted trade and forbidden usury. Those who after receiving direction from
their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge), but those
who repeat (The offence) are companions of the Fire: They will abide therein (forever).”
(Quran 2:275)

The above verse establishes a clear distinction between trade and riba and describes the
punishment prepared for those who do not obey the prohibition of riba. These signify and put it
very clearly that riba is not allowed at all for those who profess Islam as their religion.

“If there is one in misery, then (the creditor should allow) deferment till (his) ease,
and that you forgo it as alms“is much better for you, if you really know. Be fearful of a day
when you shall be returned to Allah, then every person shall be paid, in full, what he has
earned, and they shall not be wronged.”(Quran 2:280, 281)

In these verses, the prohibition of interest is directly linked to obedience to Allah and the
Messenger of Allah (saw) and not obeying this commandment is mentioned as an open act of
revolt against Allah and His Messenger (saw).
Also, indulging in Riba is considered as the closing the door of Allah’s mercy doors of mercy.

b) In Hadiths
a) In the Sunnah, the prohibition of riba was being made clear by the
b) Prophet during the khutbah al-wida’ or the final and farewell sermon. The
c) Prophet was reported to have said that: "God has forbidden you to take Riba,
d) therefore all riba obligation shall henceforth be waived. Your capital,
e) however, is yours to keep. You will neither inflict nor suffer inequity. God
f) has judged that there shall be no riba and that all the riba due to `Abbas ibn
g) `Abd al Muttalib shall henceforth be waived."
h) In the Sunnah, the prohibition of riba was being made clear by the
i) Prophet during the khutbah al-wida’ or the final and farewell sermon. The
j) Prophet was reported to have said that: "God has forbidden you to take Riba,
k) therefore all riba obligation shall henceforth be waived. Your capital,
l) however, is yours to keep. You will neither inflict nor suffer inequity. God
m) has judged that there shall be no riba and that all the riba due to `Abbas ibn
n) `Abd al Muttalib shall henceforth be waived."
In the Sunnah, the prohibition of riba was being made clear by the Prophet during the
‘Khutbah-al-Wida’ or the final and farewell sermon. The Prophet was reported to have said
that:

"God has forbidden you to take Riba; therefore all riba obligations shall henceforth
be waived. Your capital, however, is yours to keep. You will neither inflict nor suffer inequity.
God has judged that there shall be no riba and that all the riba due to `Abbas ibn `Abd al
Muttalib shall henceforth be waived."

In another hadith, the prophet mentioned that riba is considered amongst the seven heinous
sins as mentioned in the hadith narrated by Abu Huraira. The Prophet said:

"Avoid the seven great destructive sins." The people enquire, "O
Messenger of Allah! What are they? "He said, "To join others in worship along with
Allah, to practice sorcery, to kill the life which Allah has forbidden except for a just
cause (according to Islamic law), to eat up riba (usury), to eat up an orphan's wealth,
to give back to the enemy and fleeing from the battlefield at the time of fighting, and
to accuse, chaste women, who never even think of anything touching chastity and are good
believers.

VII. Opinion of the Court on Objections raised by Appellants

Opinion on the 1st Argument

The court stated that;

Firstly, it has been reported in a number of traditions that the Holy Prophet(PBUH), announced
the prohibition of riba in his last sermon during his last Hajj.
The Holy Prophet(PBUH) not only prohibited riba on that occasion but had also declared that the
first riba decreed to be void is the riba payable to his uncle Abbas ibn Abdul Muttalib

A deeper study of the relevant material reveals that this argument is misconceived. In fact the
prohibition of riba was effective at least from the 2nd year of Hijra but the Holy Prophet(PBUH)
deemed it necessary to announce the basic injunctions of Islam at the time of his last sermon
which was the most attended gathering of his followers.

Some of the appellants have termed the verses of riba as Mutashabihaat. They opined that the
Holy Qur’an has directed to follow only those verses which are clear in meaning (Muhkamaat)
and not to follow Mutashabihaat. The verses of riba being of the second category, they are not
practicable.

The verses having ambiguity or

confusion in their meaning

Secondly, This argument is fallacious on the face of it, because in the verse of Surah al-Baqarah
Allah almighty declared war against those who do not avoid the practice of Riba. How could one
imagine that Allah Almighty, the All-Wise, the All-Merciful, can wage war against a practice,
the correct nature of which is not known to anybody.

Opinion on the 2nd Argument

This argument seeks support in the verse:

“O ye who believe! Devour not usury, doubled and multiplied; but fear Allah;
that ye may (really) prosper.” [Al-Imran 3:130]

This argument overlooks the fact that the different verses of the Holy Qur’an relating to the same
subject must be studied in correspondence with each other. No verse can be interpreted in
isolation from the other relevant material available in other parts of the Holy Qur’an. As
explained at the very beginning, the Holy Qur’an has dealt with the subject of Riba in four
different Surahs . The most detailed treatment of the subject of riba is found in Surah Al-
Baqarah. These verses include the following command:

“O those who believe, fear Allah and give up what still remains of the riba if
you are believers. But if you do not, then listen to the declaration of war from Allah and His
Messenger. And if you repent, yours is your principal. Neither you wrong, nor be wronged.”
[Al-Baqarah 2:278-279]

In this Verse, “whatever remains of riba” indicate that every amount over and above the
principal has to be given up.
A combined study of Surah Aal-e-Imran and Surah Al- Baqarah's leaves no doubt that Surah
Aal-e-Imran "doubled and multiplied" are not restrictive in nature, and that "doubled and
multiplied" is not a necessary condition for the prohibition of riba. Instead, these words were
used to refer to the worst kind of Riba practice rampant at that time.

Secondly, the Holy Qur'an interpretation should always be based on the explanation provided by
the Holy Prophet's ahadith (peace be upon him). We find that the prohibition was intended to
cover every amount charged in excess of the principal, however small it may be, from the
following hadith.

Evidence from hadith: The Holy Prophet (SAW), has said: “If the creditor received a goat as
a mortgage from the debtor, the creditor may use its milk to the extent he has spent in
providing fodder to the goat. However, if the milk is more than the price of the fodder, the
excess is riba.”

Opinion on the 3rd Argument

The court paid due consideration to this argument but it could not stand the academic scrutiny for
these reasons:
a) Validity of a Transaction is not based on the Financial Status of a Party
The first ground on which argument is not tenable is that
 The validity of a commercial transaction depends on the nature of the transaction itself,
not on the financial status.
 If a transaction is valid by its nature, it is valid irrespective of whether the parties are rich
or poor.
 Moreover, the prohibited transactions are equally applicable to everyone. For example,
gambling is prohibited for both rich and poor persons.
b) The Nature of Quranic Prohibitions

The second reason for which this argument is not tenable, is that the verses which banning riba;

 Do not differentiate between the riba from consumption or commercial loans

 Even for the sake of argument, it was to be believed that commercial loans did not exist
at the time the verses were revealed and not the forms that are prevalent today!

The prohibition of riba encompasses all forms of excess over and above the principal amount for
all times.

c) Commercial loans were common amongst the Arabs at the time

This portion of the argument is invalid because;

  All forms of commercial, agricultural and industrial loans were common amongst the
Arabs and were extended before and after the advent of Islam.
 The proof of the presence of commercial loans_ Law promulgated by the Byzantine
Emperor, Justinian (527-565 A.D).  This law determined the rates of interest which
could be charged from different types of borrowers. The categorization was as under: 4%
was charged as interest from illustrious people, 6% was charged from general people,
8% was charged from the manufacturers and merchants.

The basic economic activity of the Arabs was Trade. Commercial caravans used to travel for the
purpose of import and export. Abu Sufyan’s caravan at the time of Badr comprised 1000 camels
and returned with a 100% profit.

Huge caravans such as these were funded collectively by contributions from tribe members.
Hence it is inaccurate to believe that the Arabs were unfamiliar with commercial loans.
References to commercial loans

a) Abu Lahab, the uncle of the Holy Prophet (SAW), was one of the most inimical persons
towards him, but he did not participate personally in the battle of Badr. The reason was
that he had advanced a loan of four thousand dirhams on interest to one Asi bin Hisham
and when he could not repay it, he hired his debtor against his loan to replace him in the
battle. Obviously, this amount of four thousand dirhams was too big to be borrowed by a
starving person to satisfy his hunger. It was certainly borrowed for the purpose of trade
which could not bring fruit and the debtor stood bankrupt.
b) Ibn Jarir reported that Abu Sufyan's wife, Hind, borrowed four thousand dirhams from
Sayyidna Umar (RA) for the purpose of trade. In purchasing goods and selling them on
the market of the tribe of Kalb, she invested this money.

This shows that the concept of commercial loans was not alien to the Holy Prophet (SAW) or his
companions when riba was prohibited.

d) The Quran and not human reason sets the measure of injustice

This argument is invalid because measure of injustice is what is set by the Quran as a command
from Allah and not independent, individual opinion.

Reference from Quran: Riba as Injustice

"And if you repent (from claiming riba), then you are entitled to get your
principal back. Neither you wrong nor be wronged." [Al-Baqarah 2:279]

The Quran establishes that the one who repents from riba, withdrawing from its practice and
giving it up completely — as the one entitled to the principal. If the debtor fails to pay the
principal, he commits injustice against the creditor and if the creditor claims any amount over
and above the loan, he commits injustice against the debtor.
The Quran does not leave the standard of justice for transacting parties to decide but in fact sets
the standard for it — where anything contrary to it is injustice.

Opinion on the 4th Argument

This contention did not appeal to the court, on the ground that on the ground that a thorough
analysis of the related material in Tafseer's original resources clearly shows that the claim of an
increased amount on the principal had different forms in the days of jahiliya.

First, the borrower used to demand an increased sum on the principal when advancing a loan and
would advance the loan on this clearly stipulated basis, as Imam Al-Jassas stated in his Ahkamul
Qur'an.

"And the riba which was known to and practiced by the Arabs was that they
used to advance loan in the form of Dirham (silver coin) or Dinar (gold coin) for a certain
term with an agreed increase on the amount of the principal advanced."

Secondly, the creditor used to charge a monthly return from the debtor while the principal sum
would remain intact up to the day of maturity as stated by Imam Ar-Raazi.

"As for the riba An-Nasiah, it was a transaction well-known and recognized
in the days of Jahiliyya i.e. they used to give money with a condition that they will charge a
particular amount monthly and the principal will remain due as it is. Then on the maturity
date they demanded the debtor to pay the principal. If he could not pay, they would increase
the term and the payable amount. So it was the riba practiced by the people of Jahiliyya."

It is thus established that the additional sum was often charged on a monthly basis, while the
principal was to be paid on a fixed date and was sometimes charged along with the principal. All
these forms used to be called riba because 'increase' is the lexical sense of the word.

Opinion on the 5th Argument

This claim asserts itself based on the doctrine of necessity. The doctrine of necessity is not a
vague term, but actually one based on sound principles, while Islam is practical and does not
demand the impossible. It requires the fulfillment of certain conditions before it is deemed
applicable in a given situation. The need must be real; one that can not be fulfilled but by the
unacceptable.

There is a common misconception that;

 Eradicating interest is synonymous with the transfer of charities to banks and financial
institutions; no return to banks or depositors. It's untrue. Although there is no basis in an
Islamic economic framework for the idea of a loan as it exists today in the modern
economy-the shift from conventional to Islamic finance does not entail extending
 

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interest-free loans rather it is basing transactions on well worked out modes of finance
which are not without return and of which profit and loss sharing is one.
Islamic finance is not yet developed or practiced widely enough to be depended upon to
support an entire economy.

Islamic banking and finance is not a phenomenon in theory, but in fact a framework that has
been worked on for the last half century by jurists and economists. In the 1970s, the effects of
these efforts began to become a reality. Since then, Islamic banks have risen in number to more
than 200 in 65 countries worldwide, with US$90 billion in capital at a growth rate of 15 percent
per year.

An equity-based system has more potential for distributive justice and stability to be brought
about. Depositors are expected to earn much more in equity-based banking than they are
receiving today in the form of interest, which is often negative in real terms due to inflation
caused primarily by debt-based money expansion.

Therefore, with reference to foreign loans incurred by Pakistan, it is suggested that they could be
converted into equity.

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 The "mark-up system in Pakistan as in vogue" is not a transaction by Murabahah. It is just a
name change. In Murabaha, as long as it stays in its ownership and possession, the bank must
assume the risk of the product. In a Murabaha trade, the price of the commodity is more than the
price of the same commodity on the spot market.

If the seller is willing to sell his goods at a higher price in a cash transaction, the seller can also
charge a higher price in a credit sale, subject only to the condition that the purchaser is not
misled or coerced to buy, and the purchaser agrees to pay the price free of charge. Any excess
sum paid against late payment is riba only where money on both sides is the subject matter. But
if a commodity is sold in exchange of money, the seller, when fixing the price, may take into
consideration different factors, including the time of payment.

Other modes of Financing: Ijara, Salam and Istisna that can be used in different types of
financing.

To sum up, the doctrine of necessity cannot be applied to protect the present interest based
system for an indefinite period. However, this doctrine can be availed of for allowing a
reasonable time to the government necessarily required for the switch-over to an interest-free
Islamic financial system.

VIII. Conclusion
After a very deep and detailed analysis of teachings of Holy Prophet (S.A.W) and the guidelines
laid down by Allah in the holy scripture Quran the Shariat Appellate Bench came to the
conclusion that no matter how necessary it may be deemed by some experts the role of interest in
the strengthening of economy but it being prohibited in Quran and Sunnah cannot be allowed to
prevail anymore.

The Bench proposed the idea that as various alternates have now been introduced internationally
and locally hence the system of interest shall be abolished and laws relating to it shall also be
declared null and void. However, keeping in view the time required for switching of economy
from one system to another a time period was allowed by the court to the government with a
direction that within the prescribed time period government should assure a smooth transition.