The Dynamism Of Fiqh Of Property In Malaysia

Fiqh of Property

Dynamism of fiqh means the strength of Islamic fiqh that is able to deal with the changing times and its ability to make adjustments to be always relevant to the various needs of the people (Abdullah, Ramli, & Jamaludin 2013). This has been discussed by Islamic scholars since a long time ago with the term murunat al-fiqh or flexibility of fiqh. Fiqh of property in this article refers to human understanding of the set of laws on property in the context of obtaining, granting and managing property rights based on specific and detailed evidences from the sources of the Quran and prophetic hadith . In terms of ownership whether to obtain ownership (tamalluk) or to give ownership (tamlik) , the law of property hovering around topics like sale and purchase (with all its types such as absolute sale and purchase, muqayadah, sarf, musawamah, muzayadah, amanah, munajjaz, mu'ajjal, salam, istisna‘, murabahah, wadi'ah, tawliyah, musawamah and so on), rental, grant, ibra', waqf , loan, mortgage, inheritance and ihya 'al-mawat . In terms of management, the law of property is hovering around the law of wadi'ah, mudarabah, musharakah, wakalah , wills and so on. In terms of the obligation the law of property hovering around the law of zakat and maintenance (nafkah ). Hence, the purpose and scope of fiqh meant here is broader than the scope of fiqh al-muamalat commonly known today, the law concerning the business transactions between parties, whether individuals or financial organizations. The breadth of the concept of fiqh of property intended here can be seen with its coverage of the topic of zakat which is usually discussed under fiqh of worship (fiqh al-ibadat) , maintenance (nafkah) and inheritance which that are usually discussed under fiqh of family institution (fiqh al-munakahat) . The table below summarizes the scope of fiqh of property referred to in this article.

The reality of the dynamism of fiqh of property in Malaysia

In general, the discussion of the fiqh of property in Malaysia can be broken down into two categories namely the fiqh of property lies under the jurisdiction of the states administration such as zakat , family members' maintenance, inheritance, wills and waqf and fiqh of the property beyond jurisdiction of state administrations such as fiqh muamalat applied in the Islamic financial institutions. For the fiqh of property under the jurisdiction of state administration, it is subject to the provisions in the Islamic law or enactment or ordinance regulated in each state concerned. Most of the states in Malaysia have clearly stated their attachment to the Shafi‘i sect as the main sect which was followed in the application and enforcement of Islamic law. Only in certain circumstances the views of the other sects are taken into account if maslahah demands it. For example, the Islamic Religious Administration Enactment (State of Penang, 2004) in Section 54 explains the guidelines for the mufti in issuing a fatwa as follows;

“Section 54. Qaul muktamad to be followed.

(1) In issuing any Fatwa  under section 48, or certifying an opinion under section 53, the Fatwa  Committee shall ordinarily follow the qaul muktamad (accepted views) of the Mazhab Syafie .

(2) If the Fatwa  Committee is of the opinion that following the qaul muktamad of the Mazhab Syafie will lead to a situation which is repugnant to public interest, the Fatwa  Committee may follow the qaul muktamad of the Mazhab Hanafi, Maliki or Hambali .(3) If the Fatwa  Committee is of the opinion that none of the qaul muktamad of the four Mazhabs may be followed without leading to a situation which is repugnant to public interest, the fatwa  Committee may make the Fatwa  according to ijtihad without being bound by the qaul muktamad of any of the four Mazhabs ”.

Similar provision is also found in the enactment of other states except Perlis which stipulate that the Qur'an and the Sunnah only as the main reference. This means that fiqh of family and others which are under the jurisdiction of the Islamic religious affairs of the states is legally controlled and guided. It hovers within the framework of the Shafie sect only and also the other three major fiqh sects in certain circumstances. For the time being the limitation to this sect is felt to be sufficient to deal with the issues that arise in society and that it can preserve the well being of society and reject unwarranted condition from it. Additionally, these sanctions are also felt reasonable to contain the widespread differences that result in endless quarrel and argumentation.

However the implementation of fiqh in Islamic financial institutions is not tied to the provision of the enactments as it is outside the jurisdiction of the Islamic religious affairs of the states and the shariah courts. Since 2013, Islamic finance in Malaysia is governed by two major acts namely the Islamic Financial Services Act 2013 (Act 759) and the Central Bank of Malaysia Act 2009 (Act 701). These Acts only require that Islamic financial institutions operate in accordance with Islamic law as decided by the appointed Shariah Committee in every Islamic banking and BNM Shariah Advisory Council. These Shariah committees may determine their own rules in providing shariah views to the bank without being bound by a particular sect or opinion. (Section 27-33 of Act 759 and section 51-58 of Act701) This means in the field of Islamic finance, the scope of fiqh is more dynamics and wide. The Shariah Committee in every Islamic banking, and the Shariah Advisory Council of BNM may issue its fiqh resolution pursuant to any scholarly views of the authoritative scholars in any school or they can conduct their own legal inference (ijtihad) which is more likely to conform to the objective shariah and meeting the needs of general maslahah .

Some selected examples of the dynamism of fiqh of property within the states jurisdiction.

Time frame for Mua’llaf

The previous scholars did not put a certain period of time for someone who had just converted to Islam to be called as a mu’allaf. The Muzakarah of the 71th Malaysian Islamic Religious Affairs Council Fatwa Committee convened on 22 - 24 November 2005 discussed the 'Limitation of the mu’allaf Call Period'. The Muzakarah has decided that in Islam there is no law requiring a new convert to Islam to be called the mu’alaf . The terms and time limit of the term of the mu’allaf are purely urf. Following that, the time limit of the status of mu’allaf is referred to and decided by the State Fatwa Committee respectively. Hence every states in Malaysia make their own decisions in determining the time limits of the status of mu'allaf (Abdullah, A. 2016). The National Fatwa Committee, the Kedah, Penang, Kelantan, Sarawak and Perak committees, for example, did not specify a certain period of time. Its execution is based on the local customs and the needs of each case. The Selangor and Negeri Sembilan and Malacca State Fatwa Plans set the mu'allaf period for 5 years, The Perlis for 5 years than need to be assessed to continue, Pahang 7 Years, Terengganu 3 Years, while Sabah set a base period of 5 years and can reach 7 years (Azman et al., 2015).

Cash waqf (endowment)

Cash waqf means to endow cash to any waqf trustee, in which the capital money is retained to the beneficiary. The money will be collected and then converted into a permanent property called badal (substitution). Benefits of the cash waqf will be used for the welfare and development of the ummah (Wakaf & dan Haji, 2009) such as the construction of mosques, prayer room, religious schools and cemeteries. The scholars hold different views about the validity of cash waqf practice. The decisive view in Shafi'i school which is the official school in most states in Malaysia, cash waqf is invalid. This is also the view of some of the Hanafi scholars, the Maliki and Hanbali scholars. The argument is that the nature of the money itself cannot be used unless by changing or releasing it to another owner which contrary to the basic understanding of waqf itself ie to hold a substance as it is. Similarly, they do not approve the endowment of food for its lack of immortality (Al-Zuhail, 1989). However there is also a minority of scholars within the Hanafi, Shafie and Hanbali schools who opined that cash waqf is valid. Muzakarah of the Council of Fatwa for the National Council for Islamic Religious Affairs Malaysia The 77th meeting which took place on 10-12 April 2007 has decided that the waqf in the form of cash is permissible and valid in Islam. Based on this position most of the fatwa of the states in Malaysia also approve cash waqf . For example, the Fatwa Committee of the State of Selangor 2006 and the State Fatwa Committee of Terengganu 2007, the Kedah Fatwa Committee and the Johor Islamic Religious Council (MAIJ) allowed cash waqf although it contradictory to the decisive view in Shafi'i school of law which regarded as the main reference in the field of fiqh in Malaysia.

Harta sepencarian (assets acquired by spouse during their marriage by their joint efforts)

In legal term, ‘harta sepencarian’ is defined as “property jointly acquired by husband and wife during the subsistence of marriage in accordance with the conditions stipulated by Hukum Syarak ”. In essence, the concept of harta sepencarian has no unambiguous and clear-cut textual evidence from the Quran and the prophetic hadith . Even in the works of fiqhi scholars there is no specific discussion on the concept of harta sepencarian or its equivalent. The closest one could get is discussion on the shared (sharikah) property between wife and husband. The discussion on this topic can be traced in the works like I‘anat al-Talibin of al-Dimyati, Bughyat al-Mustarsyidin of al-Sayyid ‘Abd al-Rahman, Qurrat al-‘Ayn bi Fatawa Ulama’ al-Haramayn of Saleh al-Zubayriy, al-Fatawa al-Fataniyyah of Wan Ahmad al-Fataniyy, al-Turuq al-Hukmiyyah of Ibn al-Qayyim and others(Ahmad, Husni, & Said, 2014). In view of the past history, harta sepencarian could be considered as a form of customary practice in the Malay community (Ibrahim, 2000). In Adat Pepatih for example harta sepencarian is called ‘carian laki bini’ (literally means effort of husband wife). Before the amendment of the article 121 (1A) of the Federal Constitution, judges' were more likely to refer to Malay custom when it came to harta sepencarian. For example in the case of Roberts@Kamarulzaman v Umi Kalthom, it was decided that the disputed property was considered as harta sepencarian and the court had divided every half part if the parties agreed. This is based on the assumption that it is a custom rather than Islamic law (Abdullah, Martinez, & Radzi, 2010). In Malaysia although there is no specific discussion on harta sepencarian in any of the four schools fiqhi treatises, all states in Malaysia accepts this concept and incorporate it in the Islamic family law legislations.

Some selected examples of the dynamism of fiqh of property beyond the states jurisdiction

• al-Inah sale

al-Inah sale is when a person sells his assets to another person at a certain price to be paid later, then buys them back from the same person at a lower price in cash. Generally Islamic scholars agree that al-inah sale is not permissible if both sales are tied up to one another or in other words the existence of inter-conditionality as it construes performing the prohibited riba through the medium of buying and selling. In the event of no inter-conditionality, there are two views of fiqhi scholars regarding al-inah sale (Abdullah, 2005). The first view is al-inah sale is unlawful and invalid although in its appearance al-inah sale contracts fulfils both pillars and conditions. This view is supported by the majority of fiqhi scholars of Hanafi, Maliki and Hanbali schools. The second view comprises of some scholars in the Hanafi, Maliki and Shafie schools who opine that the contract of al-inah sale is valid and permissible so long as all its pillars and conditions are fulfilled (Sawari et al., 2018). Based on the view that allows this contract and considering the urgent need of Islamic banking institutions in Malaysia to replace the lending activities with prohibited riba as practiced by the conventional banking system, the shariah committee of Islamic banking institutions in Malaysia has allowed this al-'inah sale to be practiced by Islamic banking institutions until better mechanism is found. The argument is, at least there are scholars who allowed al-inah sale contract and therefore it is better than the contract of loan with riba which is no disagreement at all among the scholars regarding its prohibition. However, due to its close resemblance to the practice of loan with riba, this contract becomes highly controversial, thus it is gradually marginalized by Islamic banking institutions in Malaysia to be replaced by tawarruq arrangement.

• Tawarruq

Tawaruq arrangement comprises of at least two contracts and a promise. It involves the contract of sale, agency and a promise to buy from one of the party (Yusof, 2014). The main difference between tawarruq and al-inah sale is that the subject matter of sale will not return to the first seller. This is in order to create a situation similar to the genuine sale and purchase contract and therefore distant this practice further from the contract of loan with riba. Basically the practice of tawarruq in its natural form is not a problem in the view of the majority of fiqhi scholars. However to make it practical and workable in the modern Islamic banking system the practice of tawarruq needs to be adjusted and organized. Thus the phrase of ‘organised tawarruq ’ arises which renders different opinion from the fiqhi scholars. The International Islamic Fiqh Academy in its resolution in 2009 defines organised tawarruq as "a buyer (mustawriq) buys goods in a market place locally or abroad with deferred payment and he appoints the financier(bank) to arrange the sale of the goods either by the financier itself or through agents and at a price which lower than the purchase price”. Regarding this practice the Academy has issued its resolution which considers organised tawarruq as unlawful. (The International Islamic Fiqh Academy, 2018) Nevertheless, this form of tawarruq transaction is also adopted by some shariah bodies such as the Shariah Supervisory Council of the al-Rajhi Bank, Kuwait Finance House. The Islamic Financial Shariah Resolution issued by Bank Negara Malaysia in the 51st Shariah Advisory Council meeting has decided that deposit products, financing products and sukuk issuance using the tawarruq concept is permissible and tawarruq is the best alternative over riba based financing.

• Safe keeping (wadi’ah) based deposit to loan (qard) based deposit

Wadi`ah means a contract to store property in trust to another person. Through wadi'ah contract, the trustee is responsible for safekeeping the property and cannot use or take any benefit from it. In the event of any damage or loss of the property not due to negligence, the trustee shall not be liable to pay any damages to the owner of the property. This contract is used in Islamic banking when the customer deposits cash as a bank deposit. However, the practice of wadi’ah in Islamic banking institutions is different from the actual wadi’ah rules. Islamic banking normally uses the deposit for its own business and if anything happen to the deposited cash the bank will responsible to pay the money to the owner. Banks also states its intention to give certain percentage of the deposited amount to the owner after a certain period of time as a gift on the discretional basis. Because of the elements mentioned above, the nature of wadi’ah contract is totally changed from a trust contract to a guarantee contract. Hence in the context of Islamic banking in Malaysia this practice is called wadi'ah yad damanah (Qaed, 2014). This make the whole exercise similar to the contract of loan. Hence each reward given by Islamic banking to the owner of the money is classified as riba even though it is called a gift. This means the branding of this practice as wadi’ah yad damanah does not conform to the true fact according to the Islamic fiqh (Ibrahim & Noor, 2011). As such, Bank Negara Malaysia which control the operation of all banking institutions in Malaysia has directed all Islamic banking institutions to change the title of the product from wadi’ah to its true nature which is qard or loan. (Bank Negara Malaysia, 2018) However, the gift granted by Islamic banking based on its discretion to the depositor is continued even though the gift has a very close resemblance to the prohibited riba in a loan contract. This has to be maintained to be an attraction to Islamic banking and to ensure its ability to compete with conventional banking institutions.