The Federal Shariah Court, after ruling on the petitions against the prevailing interest rate system in the country for 19 years, declared i...
The Federal Shariah Court, after ruling on the petitions against the prevailing interest rate system in the country for 19 years, declared it illegal and directed the government to take all loans under interest free system and free the economic system from interest till December 2027. Go
The court ordered the government to immediately remove the word 'interest' from all laws. Photo courtesy of Radio Pakistan
A three-member bench comprising Chief Justice Shariah Court Noor Mohammad Miskanzai, Justice Mohammad Anwar and Justice Khadim Hussain heard the case on petitions seeking to rid the economic system of interest.
Read more: Petitions for abolition of interest rate set for hearing
The Federal Shariah Court said that the opinion of all the parties including the Attorney General was taken in the case and all the parties gave their opinion about the interest free banking system.
The Federal Shariah Court, after ruling on the petitions against usury for 19 years, banned the taking of interest on delay in repayment of loans and also declared the West Pakistan Money Laundering Act to be against Shariah.
Justice Syed Mohammad Anwar while reading out the verdict said that elimination of interest from the economic system is a shariah and legal obligation and elimination of usury from the country must be done in any case.
He said that over-lending by banks falls under the category of usury and Islamic banking system is risk-free and against exploitation.
The Shariah court directed the government to take internal and external loans under interest free system.
Also read: Senate Standing Committee calls for interest-free economic system
The court declared the Interest Act 1839 and all the laws and provisions that facilitate interest to be illegal and prohibited taking interest on delay in repayment of loan.
The Shariah Court, while declaring all the clauses related to taking interest from June 1, 2022 as non-Shariah, directed the government to immediately remove the word 'interest' from all laws.
The ruling said five years was enough for an Islamic and interest-free banking system and that the government was expected to present an annual report on interest rates in parliament.
The decision said that Islamic banking data was presented in court and interest free banking is possible all over the world.
He said that he did not agree with the negative effects of interest free banking from the federal government and elimination of interest from the economic system is a Shariah and legal responsibility therefore the decision of the Federal Shariah Court should be implemented.
Read more: Why the state is reluctant to legislate according to Sharia, Federal Sharia Court
The court said that two decades have passed but the governments have not taken any action against usury and ordered the federal and provincial governments to change the laws by December 31, 2022.
The Federal Shariah Court has given the government five years to implement the judgment and ordered the government to make the country's economic system free from interest rate by December 31, 2027.
It was further stated that annual reports would be tabled in Parliament on anti-interest rate laws.
It should be noted that the case against the interest rate system has been pending in the Federal Shariah Court for decades but no decision has been reached till date.
Amir Sirajul Haq of Jamaat-e-Islami and several other leaders were also present in the court.
Talking to media outside the court after the verdict, Ameer of Jamaat-e-Islami Sirajul Haq said that Pakistan has achieved a great victory today. It is his Islamic, constitutional and legal responsibility to take immediate action.
Background of interest litigation
The first petition was filed in the Federal Shariah Court on June 30, 1990 regarding the abolition of usury system, after which a three-member bench of Shariah Court headed by Dr. Tanzeel-ur-Rehman was constituted in 1991, which However, the decision was challenged by the federal government in the Supreme Court.
Nine Chief Justices of the Federal Shariah Court have completed their term, while from 2002 to 2013, there was not a single hearing of the case. Photo: Sobia Shahid
Later, the Supreme Court upheld the decision of the Shariah Court and ordered the government to implement the decision by June 2000. However, the then General Pervez Musharraf's government filed an appeal against the decision. Was After which, on June 24, 2002, the decision of the Shariah Court was suspended and the case was referred back to the Shariah Court for interpretation.
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