ISAS Insights

Summary

The Constitution of the Islamic Republic of Pakistan contains numerous provisions aimed towards the political, legal and economic system of the country conforming to Islamic norms and injunctions. The difficulty in achieving this goal, however, is that numerous ambiguities exist in the text of the document, including the absence of clear definitions of key and relevant terms. The absence, often, of a decisive and coherent action plan to realise high aspirational Islamic goals further provokes enduring political and legal contestation. These tensions are perhaps most evident in Pakistan’s struggle to establish a just, equitable and moral economic order through the elimination of riba. This paper shows how the struggle to eliminate riba demonstrates fundamental tensions in the constitutional order concerning the jurisdictional boundaries between the secular and Islamic courts.

Article 38 of Pakistan’s Constitution details a list of governmental priorities for the promotion of social and economic well-being of the people. It speaks about the importance of preventing the concentration of wealth and means of production and distribution in the hands of a few. It further declares that the state shall provide for all citizens with facilities for work and adequate livelihood with reasonable rest and leisure, social security (by compulsory social insurance or other means), provide all citizens with the basic necessities of life (such as food, clothing, housing, education and medical relief) and reduce income disparity between individuals. Article 38(f), in a brief clause, states that the state shall eliminate riba as early as possible. Unlike many of the preceding sub-clauses of the Article, no further details are given concerning the justification for the state’s prerogative to eliminate riba. Article 38 is also silent on the impact of riba or the method through which it ought to be eliminated – only that it be eliminated as early as possible. Although, Article 38, like much of the early part of the Constitution, is aspirational and serves akin to something like a mission statement where the priorities and prerogatives of the state are stipulated, there are striking features about the clause on riba which attract attention. For one thing, asides Article 38(f), the word riba is not mentioned anywhere else in the current Constitution. Nor is the word defined in the text of the document which is most notable. The word riba appears in the Quran¹ and the basis for its unlawfulness is based both on Quranic verses and scholarly consensus (ijma) amongst classical Muslim jurists.² However, the meaning of the term riba is decidedly complex and contested in both classical Islamic law and modern interpretations of the sharia. “What defines riba”, explains Ahmed Affi and Hassan Affi, “is fraught with many challenges.”³ They note that “there are many uncertainties surrounding the issue of riba, particularly what exactly is and is not forbidden under Sharia law, leading to a myriad of confusion and various intellectual discussions and interpretations of what the Qur’an really means when it talks about riba.”⁴ That the Constitution avoids positing a definition for riba in this regard may not be surprising, particularly since Muslim jurists of both the classical period and the modern era remain divided on the issue of whether riba constitutes usury or simply means interest⁵ or in fact refers to a much broader category of transactions involving gain without due effort.⁶ Despite the difference of opinion on the semantic meaning of the term, what renders riba coherence is that it is a decidedly Quranic concept with profound theological connections and implications. In this regard, it is surprising that this provision neither references Islam nor appears in the chapter on Islamic provisions (Part IX of the 1973 Constitution). Moreover, the Constitution does not articulate any Islamic basis for the elimination of riba but rather on the broad objective of promoting the social and economic welfare of the people.⁷

The ambiguities around whether the constitutional prescription of eliminating riba is an Islamic goal or not raise numerous practical governance questions. For one thing, some consensus is required on what constitutes riba in order to eliminate it. How should this consensus be achieved? Should the Council of Islamic Ideology, the constitutional body created to advice the government on Islamic matters, be involved? Who should be responsible to oversee the achievement or implementation of this goal? Is it the responsibility of legislatures? And if so, what connection does this objective relate to Article 227(1) which requires that all legislation must conform to Islamic injunctions?⁸ Or is it a matter for the courts? What role should the Federal Shariat Court (FSC) play? Does riba fall within the FSC’s jurisdiction to exercise Islamic judicial review? The answers to these questions remain opaque and the subject of heated political contestation.

Most recently, debates on riba intertwine with questions around the function and jurisdiction of the FSC. In 2016, a three-member bench of the Supreme Court (SC) of Pakistan headed by Justice Mian Saqib Nisar dismissed a petition filed by Aakif Saeed, the head of the Tanzeem-e-Islami and the son of late religious scholar Dr Israr Ahmed, seeking elimination of riba from the financial system of the country.⁹ The Tanzeem-e-Islami has long campaigned for the eradication of riba and has often thrown its weight behind legislation which has sought to further this agenda.¹⁰ The SC in this instance argued that the matter lay within the purview of the FSC and that the FSC was in fact looking into the matter.¹¹ Article 203D (1) of the Constitution establishes the FSC as the body responsible for aligning laws to Islamic legal norms and principles. Article 203B (c) ensures that the jurisdiction of the court is limited and that key areas of law remain outside its purview. Article 203B (c) states that the Constitution itself, Muslim personal law, any law relating to the procedure of any court or tribunal or, until the expiration of ten years from the commencement of Chapter 3A of the Constitution, any fiscal law or any law relating to the levy and collection of taxes and fees or banking or insurance practice and procedure all remain outside of the jurisdiction of the FSC.

The 10-year exclusion of fiscal laws from the FSC’s jurisdiction is most relevant. When the FSC was established by General Zia ul Haq in 1980, its functions and jurisdiction were the subject of continual tinkering.¹² The FSC was set up to hear sharia-related petitions from citizens and provincial and federal governments. A number of petitions were then lodged before the FSC to examine provisions for laws which permitted the payment of interest – but these were all dismissed on the basis that they were ‘fiscal laws’ and that fiscal laws were outside of the Court’s jurisdiction.¹³ This exclusion of fiscal laws from the FSC’s jurisdiction was set to initially last three years, but Zia went ahead and further extended the time span first to four years, then five years and then to 10 years. “Therefore”, Charles Kennedy writes, “the FSC was effectively banned from consideration of all laws relevant to riba until 1990.”¹⁴

When the 10-year term for the exclusion expired, the FSC received some 115 petitions to examine some 20 laws which purportedly contradicted Islam.¹⁵ These petitions mostly based their arguments on verses 275-278 of the second chapter of the Quran.¹⁶ The cause against riba found a sympathetic ear with the Chief Justice of the FSC, Tanzil-ur-Rahman, who had also previously served as the chairman of the Council of Islamic Ideology and authored reports on riba in 1980 and 1983.¹⁷ The landmark 564-page judgement in the case Mahmood-ur-rahman Faisal v. Secretary, Ministry of Law, Justice and Parliamentary Affairs, Government Of Pakistan, Islamabad, relied heavily on these reports and their findings. The judgment declared that “the literal meaning of riba is, ‘increase’. In Shari’ah it means ‘an addition, however slight, over and above the principal’, and thus includes both usury and interest.”¹⁸ Moreover, the FSC reasoned that “Riba forbidden in the Qur’an and Sunnah includes interest due on the loans taken or given for commercial and productive purposes by Banks or other financial institutions as well as interest on consumptional loans.”¹⁹

This ruling continues to be the subject of much contestation. While an appeal against the verdict was heard before the Shariat Appellate Bench (SAB) of the Supreme Court, the SAB however upheld the original FSC verdict in 1991 and allowed the government two years to reform banking laws and statues in order to eliminate riba. ²⁰ When the government and some banks filed a review petition before a Supreme Court bench headed by Chief Justice Sheikh Riaz, the bench returned the issue back to the FSC in 2002 for a “hearing afresh”. ²¹ The bench explained: “Since the Federal Shariat Court did not give a definite finding on all the issues involved the determination whereof was essential to the resolution of the controversy involved in these cases, it would be in the fitness of things if the matter is remanded to the Federal Shariat Court which under the Constitution is enjoined upon to give a definite finding on all the issues falling within its jurisdiction.”²² The review petition was also grounded on the basis that the implementation of the anti-riba judgment would risk the economy of the country.²³

In December 2020, similar issues presented before both the FSC and the SC when a threejudge bench of the FSC led by Chief Justice Muhammad Noor Meskanzai took up constitutional petitions filed to examine whether the banking system in Pakistan conforms to Islamic injunctions.²⁴ The State Bank of Pakistan (SBP) requested the FSC to defer its hearing of these petitions arguing that the enforcement of Article 38 of the Constitution was a matter for the legislative and executive arms of government – and not the judicial apparatus of the state.²⁵ The counsel for the SBP further added that the mandate of eliminating riba in Article 38, whilst important, did not in fact specify a timeframe.²⁶ While the FSC rejected the request, in February 2021, the federal government challenged the FSC arguing that the Court did not have jurisdiction to hear the case regarding interest.²⁷ The attorney general contended that the Supreme Court was the appropriate avenue to settle the issue since the case against interest was a matter of constitutional interpretation.²⁸ While the hearing has been adjourned, it can be seen that the issue of riba continues to raise questions and contestation concerning jurisdictional boundaries between the FSC and the SC in Pakistan.

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Dr Imran Ahmed is an Honorary Associate at the University of New England, New South Wales, Australia, and a consultant with the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS). He can be contacted at iahmed5@une.edu.au. The author bears full responsibility for the facts cited and opinions expressed in this paper.
 

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