ISLAMABAD, June 14: The federation informed the Supreme Court’s Shariat Appellate Bench on Friday that the apex court had deviated, on some points, from Holy Quran and Sunnat while declaring all kinds of interest-based banking un-Islamic.

Representing the federation, Syed Riazul Hassan Gillani laid down his formulations on which he would elaborate his arguments on Monday.

The government is seeking reversal of the 1992 Federal Shariat Court judgment, declaring all forms of interest-based banking un-Islamic.

On Dec 23, 1999, the SC’s Shariat Appellate Bench had upheld the FSC’s judgment, and directed the government to transform the economy in accordance with Shariat principles by eliminating all forms of interest-based banking.

Mr Gillani, a prominent jurist considered an authority on the subject, said that Supreme Court’s failure to distinguish between moral and legal aspects of Riba had resulted in an amalgamation which was violative of the teachings of Holy Quran and Sunnat as well as opinion of Imam Abu Hanfia and other great jurists of Islam.

The counsel explained that while appearing in a case involving interpretation of Holy Quran and Sunnat, he had never sought instructions from any party, and always tried to expound and interpret the injunctions of Islam relevant to the proceedings.

The SC judgment, he said, had tried to enforce “Makrooh Riba” through state apparatus which was against the tenets of Sunnat of Holy Prophet (peace be upon him). The counsel added that Riba had been wrongly applied to non-Muslims.

He said that while attempting to define Riba, the court had violated the fundamental rules of Tafasir, and misread the prevalent practices in Arabia about Riba.

He said that court’s failure to define Qarz had rendered the entire complexion of the judgment against the Shariat. The English word “loan” is not what is meant by the Qarz, he pointed out.

The alternative modes of finance introduced by the so-called Islamic banks, he stated, were not Islamic. He further said that while suggesting measures for Islamization the views of Mohammad Baqir Saadad, a prominent scholar of Iraq, had been ignored.

The counsel said he would try to persuade the court that the SC judgment suffered from material misreading, while analyzing views on Riba expressed by prominent jurists like Abdul Razak Sunhori.

The counsel said he would also elaborate that the SC judgment had declared indexation as repugnant to Shariat without quoting any supporting material from Holy Quran and Sunnat. While doing so the juristic opinion of Maulana Shah Ahmad Raza Khan Barelvi and Syed Baqir Saadad had been ignored.

Zulm (exploitation) is sine qua non of Riba, he said and added that the court had wrongly held that Zulm was not “Ilat but Hikmet”.

The express verses of Holy Quran and juristic opinion of Imam Ibne Rushd and Maulana Ashraf Ali Thanvi had also been ignored by the bench, he stated.

The counsel narrated the story of a contractor from Karachi who had requested him to inform the court about his plight. The contractor had told the counsel that he wanted to purchase a crane and he, instead of going to the Citibank, decided to approach an Islamic bank operating in the country.

The machine was imported from Switzerland at the cost of Rs10 million, and the bank leased it out to the contractor who was required to repay on the basis of 24 per cent interest. The contractor said if he had obtained loan from the Citibank he would have required to pay around 15pc interest on the loan.

The contractor said he had paid 70pc of the total cost when his business started dwindling. The bank people came to him and told him that under the Islamic banking modes, the crane remained the property of the bank and it had been only leased out to him. The crane was taken away and now the contractor has no claim to the machine.

The counsel said he would explain to the court that predetermined fixed profit was not the only criterion which made a transaction un-Islamic. He said he would try to establish that fixed profit was the characteristic of Mozarba.

Some portions of the judgment, he said, simply needed deletion as elementary mistakes were made by attributing one book to some other author who was born centuries after that.

The counsel said that an independent judicial mind was not applied which was the requirement of law.

Justice Tanzilur Rehman is the author of the FSC judgment. While writing the judgment, he quoted his own books on the subject. The judge then referred profusely to the report of Council of Islamic Ideology which was also authored by him.

The counsel said that not only that but the Supreme Court, while hearing appeal against thee FSC judgment authored by Justice Tanzilur Rehman, also quoted him as a writer on the subject. The counsel said what he was stating were verifiable facts and he would provide evidence in this connection.

Earlier, Raza Kazim, another counsel for the federation, who confined himself to the practical difficulties which the government was facing in implementing the judgment, stated that Pakistan being a member of the World Trade Organization could not live in isolation which would be the case if the Riba judgment was implemented.

He said that Sudan was no model for Pakistan to emulate and Iranian system was not interest free. He said the Supreme Court judgment required that no interest or profit earned without the element of risk was Islamic.

He said that small depositors who had 60pc shares in the accumulated bank deposits could not afford to take risk.

Mr Kazim said that small depositors, including retired persons, widows and house-wives, were incapacitated to enter into partnership and they could not risk their life-long savings.

He said that depositing money and taking fixed rate of return was a necessary evil, and added that the government was determined to allow parallel Islamic banking.

Charging of interest was a necessary evil without which no banking institution could survive, he said.

The counsel, Raza Kazim said that courts were not required to decide every matter which was brought before them and added that they should confine themselves to their jurisdictions.