QABD
(POSSESSION):
AN OVERVIEW
Monthly Publication – June, 2015 Edition
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INTRODUCTION
MOHD BAHRODDIN BIN BADRI*
Qabd (possession) is a fundamental condition that must
be satisfied by the contracting parties who are involved
in the contract. Failure to observe this requirement will
trigger some implications that contravene the Sharīʿah. It
is essential to comprehend the concept of qabd and its
application to ensure that financial instruments offered in
the market are in compliance with the Sharīʿah. Hence,
this article will provide an overview of the nature of qabd
in Islamic financial transactions and highlight some of the
Sharīʿah issues arising from it.
DEFINITION OF QABD AND ITS CLASSIFICATION
Qabd means taking possession, receipt or control of
something that arises from a transaction. In an exchange
contract, the effect is that the seller becomes liable to
hand over the object of sale to the buyer. However, in
a unilateral contract such as hibah (gift) contract, the
donor shall deliver the gift to the recipient. While in a
rahn (pledge) contract, the pledgor is liable to deliver the
pledged asset to the pledgee. Hence, qabd is essential
in all forms financial transactions.
From a fiqhi perspective, jurists have classified qabd into
two types—namely, qabd haqiqi (physical possession)
and qabd hukmi (constructive possession).
i) Qabd haqiqi, which is sometimes referred to as
qabd hissi, takes place when the buyer has physically
possessed the asset that is delivered by the seller. This
type of qabd involves two types of assets:
a) Mal manqul (movable asset) – For this type of asset,
it is inclusive of all movable assets such as vehicles,
food, minerals, commodities, etc. Qabd haqiqi is
established when the seller hands over the purchased
physical asset to the buyer upon the execution of the
sale contract. The buyer shall hold the asset and has
full liberty to deal with it without any restriction.
Mal ʾaqar (immovable asset) – This type of asset
includes immovable properties such as land and
building. Qabd haqiqi takes effect when the seller gives
the buyer full permission to own the purchased asset, to
have full control of the asset and to utilize it freely without
any hindrance. As an example, in a sale transaction that
involves an exchange of a piece of land, it is sufficient to
affect the qabd if the seller gives the buyer full control of
the land and gives him full freedom to utilize it.
ii) Qabd hukmi refers to a kind of possession, in which
the purchaser has taken constructive possession of the
asset even though he does not possess it physically. Qabd
hukmi is established once the seller gives the buyer full
access and control over the asset even though the physical
asset has yet to be delivered. The transfer of ownership
from seller to buyer is fully executed in Qabd hukmi, which
thereafter implies that all rights and liabilities are transferred
to the buyer. The buyer enjoys all rights of the asset as well
as bears the risk of ownership and is liable for any damages
to the asset.
Qabd hukmi may happen in a variety of scenarios. The
following are few situations where qabd hukmi takes place.
a) Takhliyah (Giving full access and permission)
The seller gives full permission to the buyer to possess
the purchased asset without any restriction. The release
of the asset by the seller to the buyer implies that the
delivery has taken place even though the buyer has not
yet taken actual possession of it. For instance, a car
dealer shows the buyer a car in a garage, hands over the
key and grants the buyer the permission to take the car
at his liberty. The full permission that is granted to the
buyer to take the purchased asset is deemed as an act of
transfer of the asset. With such permission, qabd hukmi
is established even if the buyer decides to leave the car
in the garage.
b) Muqassah (Set-off)
In a situation where two persons are financially indebted
to each other, it is permissible for one party to settle his
debt to another party by way of muqassah (set-off). For
example, if party A borrows RM100 from party B who
was earlier indebted to party A for the same amount, it
is allowed for both parties to set off their debt. Though,
both parties do not take the physical possession of the
currency in this situation, qabd hukmi on the amount of
debt is deemed to take place by way of muqassah.
c) Itlaf (Spoiling)
In the event that the buyer causes damage or spoils the
item (while the item is still in the possession of the seller),
qabd hukmi shall take immediate effect. Therefore, the
buyer is liable to pay the price of the damaged item. Jurists
further discussed that even if the seller does something to
the item upon request by the buyer, such as asking him to
grind the wheat grain into flour, which unexpectedly spoils
the item, qabd hukmi takes place immediately.
* Researcher, International Shariah Research Academy for Islamic Finance (ISRA)
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d) Qabd sabiq (Preceding possession)
All the above situations indicate that the transacted
asset is in the possession of the seller. What if the
asset is already in the possession of the buyer due to
a transaction that was executed earlier such as ijarah
(renting), iʾarah (borrowing) or wadiʾah (custodian)?
Does the buyer need to renew the qabd in the later sale
transaction? In this case, if someone who has borrowed
a car or has rented a house would like to purchase
the asset from the owner, qabd hukmi is immediately
established upon the execution of the sale contract. It is
deemed that the seller has already fulfilled his obligation
to deliver the asset and the buyer has taken delivery of
the asset.
SHARI’AH ISSUES
The function of Qabd in some types of sale contract is
to complete the transaction. The fulfilment of qabd is
essential to affect the validity of sale contracts. For sale
transactions that require immediate payment of price while
the delivery of the asset is deferred, such as bayʾ al-salam
(deferred delivery sale) and bayʾ al-istisnaʾ (manufacturing
sale agreement), the contract shall only be completed
upon the receipt of payment by the seller. The execution
of the contract is impossible without the seller making the
settlement. Similarly, in bayʾal-sarf (currency exchange), the
contract is not complete unless both contracting parties
mutually receive the transacted currencies.
Unlike many other sale contracts, the sarf contract is unique
in that it requires that both parties shall mutually receive
the transacted currencies on the spot during the majlis
al-ʾaqd (contract session). The contract does not permit
any clause of deferment or khiyar shart (option to annul that
is contingent upon a condition). The possession may take
place whether it is in the form of physical or constructive
possession. The Islamic Fiqh Academy of OIC in its meeting
on 20th March 1990 resolved that constructive possession
of currencies takes place by way of crediting a sum of money
in the bank account of the contracting parties or by way of
receipt of a cheque (provided that its amount stands in the
account of the issuer).
Taqabud (mutual receipt) is a mandatory condition that
must be fulfilled for the contract to be valid. The deferment
of delivery of the currency from one party renders the
contract to be fasid (voidable) according to the Hanafi.
Majority jurists hold the view that the contract is batil
(void). All jurists agree by consensus that the absence of
qabd from one party during the contract session triggers
a very serious Sharīʿah issue, which is riba al-nasa’(a
type of usury in sales, which takes place when two
ribawi (usurious) items of the same type of category are
exchanged with deferred delivery).
In the current practice of spot foreign exchange transactions
undertaken by Islamic Financial Institutions, the delivery and
settlement are commonly not made on the same day as the
transaction date. The payment is only made on T+2 (two
days after the transaction date). Thus, it raises a question
whether the delay of the settlement contravenes the basic
ruling of Sharīʿah. In this regard, the Shariah Advisory
Council of BNM (Central Bank of Malaysia) resolved in its
38th meeting dated 28th August 2003 that the delivery
and settlement of spot foreign exchange transaction based
on T+2 are permissible. The T+2 is deemed as spot even
though the date of delivery and settlement differ from the
day that the contract was executed. The 48-hour period
after the foreign exchange transaction date is required by
the Islamic financial institutions to confirm the transaction.
This payment method based on T+2 has been widely
accepted and recognised as uruf tijari (a customary
business practice). Similarly, the Islamic Fiqh Academy of
OIC resolved that the delay of delivery and settlement of the
transacted currencies is allowable provided that it does not
exceed the usual period in such a transaction.
With regard to selling a purchased item not yet in
possession, the majority of the jurists hold the view that
it is not permissible. It is mandatory to ensure that qabd
must take place before one sells it to the other party. This is
evident by the Prophetic hadith that prohibited reselling food
before having it in possession as narrated by Ibn Umar that
the Prophet (P) said, “Whoever buys food, he shall not resell
it before he procures it.” According to Ibn Abbas, reselling
food which is not in possession is tantamount to riba. The
reason is, if someone pays 100 dirhams for food and resells
it for 120 dirhams (before taking full possession of the food);
it is similar to exchanging 100 dirhams with 120 dirhams,
which is tantamount to riba al-fadl. The Hanafi, Shafiʾi and
Hanbali Schools of Islamic Law hold the view that the ʾillah
(cause) of prohibition in trading an object that is not in the
possession of the seller is the element of gharar (ambiguity).
CONCLUSION
In summary, the Sharīʿah acknowledges that qabd may take
place in a variety of means. The qabd implies that the relevant
contracting parties are liable to settle the payment or to
deliver the asset. In some contracts, qabd is very essential,
in which the contracts cannot be completed and are not valid
without qabd. A very cautious treatment must be given if the
transaction involves currencies exchange, to avoid riba.
A clear understanding of the concept of qabd and its ruling
is very important, considering that the failure to comprehend
and to abide by the rules related to qabd may trigger Sharīʿah
issues, which could unexpectedly be very serious!
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POSSESSION: ITS FORMS, EMERGING TRENDS
AND ITS LEGAL RULES
The Council of the Islamic Fiqh Academy, in its 6th Session
held in Jeddah, Kingdom of Saudi Arabia, from 17-23
Sha’ban 1410H (14-20 March 1990).
Having studied the papers presented to the Academy on
the subject of “Possession: Its Forms, Emerging Trends
and Its Legal Rules”,
And having to listen to the discussions that took place on
the subject,
RESOLVES:
First: Just as the possession of commodities may be
physical, by taking the commodity in one’s hand or
measuring or weighing the eatables, or by transferring or
delivering the commodity to the premises of the possessor,
similarly the possession may also be an implied or
constructive possession which takes place by leaving the
commodity at one’s disposal and enabling him to deal with
it as he wills. This will be deemed a valid possession has
not taken place. As for the mode of possession, it may vary
from commodity to commodity, according to its nature and
pursuant to the different customs prevalent in this behalf.
Second: Some of the forms of the constructive
possession recognized both in Sharīʿah and the custom are
enumerated hereunder:
i. Crediting a sum of money in the bank account of a
customer in the following cases: If such crediting takes
some time to enabling the beneficiary to draw the amount
so credited, this delay can be allowed, provided that it
does not exceed usual period normally allowed in such
transaction. However, the beneficiary of such crediting
cannot deal in the currency during the allowed period until
the crediting takes its full effect by enabling the beneficiary
to draw the amount.
a. Where a sum of money has been credited to the
account of the customer, either directly or through
a bank transfer.
b. Where a customer contacts a sale of sarf by
purchasing a currency for another currency standing in
his own account.
c. Where a bank, on order of the customer, debits a sum
of money from his own account and credits it to another
account, in another currency, either in the same bank or in
another bank, no matter whether it is credited in favour of
any other person. But it is necessary for the banks to keep
in view the Islamic rules governing the contract to sarf.
ii. Receipt of a cheque, provided that its amount stands in
the account of the issuer, and can be drawn in the currency
specified in the cheque, and the bank has closed it (for the
payee).
Source: Majma’ Al-Fiqh Al-Islami (2003)
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