Question:-
Person A has invested R50 000.00 in a business venture with person B, whose profession is making glasses. He invested on the basis that person B claimed to have plenty of business and government contracts. The agreement was, that person A would receive a monthly return of 13% on his original investment of R50 000.00. This was agreed upon, but it was only signed on a piece of paper in March 2021. There is no legal document or contract in place. Since March 2021, person B has only paid R5000 and nothing more. Can person A now claim his capital and his profits? Does person B have to pay for any losses incurred by person A, as person A states that he incurred interest on his credit card and medical bills etc. due to person B not paying his monthly returns? What is person A entitled to?
Answer:-
In the queried scenario, the partnership enacted between partner ‘A’ and partner ‘B’ is referred to a ‘Mudhaarabah’ partnership. This simply means that one partner will lay out the capital (which is partner ‘A’ in our scenario), whilst the other partner will engage in work (which is partner ‘B’), and the profit accrued (from the partnership) will be shared between both partners, according to the ratio stipulated in the Mudhaarabah partnership agreement.
However, it is not correct to agree upon a fixed or stipulated return for any of the partners in the partnership. By fixing the returns, the Mudhaarabah agreement becomes corrupt. In the case where the Mudhaarabah agreement becomes corrupt, any profits accrued from the investment will belong to the Rabb-ul-Maal (the investor) who is partner ‘A’ (in our example), and partner ‘B’ will receive a salary (which people in a similar occupation receive) for his work, with the proviso that the Mudhaarabah partnership has accrued profits. If the partnership did not accrue any profits, then the Mudhaarib (who is partner ‘B’) will not be entitled to a salary.
Now, coming to our scenario, a fixed monthly return was stipulated for partner ‘A’ who is the Rabb-ul-Maal (investor.) He was to receive a 13% return on his investment amount of R50 000.00 monthly, which is R6500.00 per month. As a result of such an agreement between the partners, the Mudhaarabah will be considered as corrupt. If the Mudhaarabah has accrued profits, then all such profits will belong to the Rabb-ul-Maal (the investor), and the Mudhaarib (working partner) will be paid a salary which people generally receive for a similar type of occupation.
Partner ‘A’ cannot hold partner ‘B’ liable for any losses or charges that he may have incurred for delaying in paying his medical bills or credit card bills.
(هي) — عقد شركة في الربح بمال من جانب رب المال وعمل من جانب المضارب. (رد المحتار ص645 ج5)
“ومن شرطها أن يكون الربح بينهما مشاعا لا يستحق أحدهما دراهم مسماة” من الربح لأن شرط ذلك يقطع الشركة بينهما ولا بد منها كما في عقد الشركة. (الهداية ص200 ج3)
وان لم يظهر ربح فلا شيء عليه اي المضارب (الدر المختار ص447 ج8)
و(ومنها) أن يكون المشروط لكل واحد منهما من المضارب ورب المال من الربح جزءا شائعا، نصفا أو ثلثا أو ربعا، فإن شرطا عددا مقدرا لا يجوز والمضاربة فاسدة (بدائع الصنائع ص119 ج5)
إستحقاق رب المال للربح بماله فيكون جميع الربح له في المضاربة الفاسدة والمضارب بمنزلة أجيره يأخذ أجر المثل لكن لا يتجاوز المقدار المشروط حين العقد ولا يستحق أجر المثل إن لم يكن ربح مادة 1426 المجلة
ALLAH TA’ALA KNOWS BEST!
ANSWERED BY:
Mufti Mohammed Desai
Date: 04 Shabaan 1443 / 07 March 2022
