Shariat Court rejects SBP request to defer Riba case

Asks parties to submit their written replies on December 18

Our Correspondent December 08, 2020


The Federal Shariat Court (FSC) has rejected the central bank’s request to defer hearing of petitions filed against Riba-based banking and asked the parties to submit their written replies.

A Three-judge FSC bench presided over by Chief Justice Muhammad Noor Meskanzai on Monday took up a number of constitutional petitions filed against Riba-based banking system.

Salman Akram Raja, counsel for the State Bank of Pakistan (SBP), told the bench that he had held consultations with the Attorney General for Pakistan (AGP) and the SBP officials who had suggested seeking time from the court so that he might assist the bench on the matter after preparations.

“I also need to consult government officials in this regard,” Raja said.

The bench said the AGP and the provincial advocate generals has accepted jurisdiction of the court and their stance has been made part of the court record. The court cannot wait anymore as the AGP has submitted his views, the bench noted.

Raja said the Supreme Court has instructed the FSC in its remand order to also rule on its jurisdiction. The bench noted that it was bound to follow the SC order.

The bench noted that there are five Islamic banks working in the country and the World Bank is also supporting Islamic financing. It said that former AGP Anwar Mansoor Khan has already presented the stance of the federal government before the bench.

The SBP’s counsel said a legal court could not implement the principle of policy.  He said it is a policy matter under Article 29 of the Constitution and the court cannot interfere in it. “Article 38 also does not bind the government to abolish Riba in a certain timeframe, he said.

“Article 38 says the state shall eliminate Riba as early as possible. It is the job of the parliament and the executive to implement this provision of the constitution and judiciary cannot pass a judgment in this regard,” he said.

Salman Akram Raja said the parliament, the government and the SBP are looking into the matter and legislation in this regard is also under way.  “The SBP is also taking all possible steps,” he said.

The bench asked the counsel to provide details of the legislation so far done in this regard as well as the proposed legislation to end Riba-based system.

The counsel for the Jamaat-e-Islami, one of the petitioners, said the FSC is competent to hear the case under Article 203 of the Constitution. He said neither the petitioners have challenged any constitutional provision nor requested the court erase the word “interest” from the relevant clauses.

He said the government and other respondents must explain to the court what do they define as Riba.

“The makers of the Constitutions were aware that Riba was part of the system and that is why they talked about eliminating it. We ask the government to explain its definition. It is possible that interest and Riba have same meaning in some cases and different meanings in some other cases,” he said

JI leader Professor Ibrahim Khan said under the Constitution, the legislature can make no law violating the Quran and Sunnah. He said the AGP and all provincial advocates general have accepted the jurisdiction of the court but the SBP lawyer is challenging it.

Chief Justice Muhammad Noor Meskanzai said the FSC can neither change the Constitution and law nor stop the legislation from making a new law.

The court later rejected Raja’s request to defer the hearing till January and adjourned till December 18. It also ordered the parties to submit their written arguments in the court.



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