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money invested used for a different purpose and then stolen. Can we claim back our money?

Last updated: 17th October 2022
Question ID: #7644
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As salam alaykum respected shuyukh... I need a fiqhi answer to a financial issue...can you kindly please help me .. Jazakumullahu khayran... . Here is my question : In February 2020, my husband and I invested money with one of his friends. The basis of that investment initially was that, after every 3 months, we get 25 % profit of the amount of money invested. HIs activity was buying expensive cars at a cheaper price through channels, fixing them and reselling them for more. According to him, his business was successful and no mention of any risk or loss has been mentioned at that time. After a couple of days, I realised that it was a form of ribaa to get a fixed amount so my husband contacted him to change the conditions of the deal, so this becomes halal. We agreed on continuing on a basis of partnership, and on the fact that we may not make a fixed and expected profit, and that our profit will depend on how much profit he makes. The brother sent to my husband this message : “The percentage is based on 5.5% return more or less on 10K. That makes roughly around 5k up and down as profit based on the product value. This is an investment only and if you investing same amount roughly then it’s same figure roughly unless you invest more amount.” After a year, my husband enquired about the investment and the brother informed him that he lost all the money. He invested the money in a different activity, which is importing or exporting cars to sell them. He told my husband that the cars he bought have been stolen on the journey, hence he lost all the money. I have personally invested all my savings on the basis that the investment is sure and will generate profit. My husband also on his side invested a big amount. Now when we try to contact the brother, his answers are not clear, in the sense we don’t know when, how much and if he is going to give us our money back. Also, from his message, it seems that for him, giving the money back is not a must but rather out of his benevolence. Now, more time passes and less he is willing to give the money back. So my questions are : Are we in our right to ask the money back and still consider this money as ours? Or is this money a debt upon him if he decides not to give them back? Was it right for him to invest in another activity without consulting us? Do we have to pay zakat al maal upon this money? (I am maliki, my husband is hanafi) What do you advise as a solution? Jazakumullahu khayran for your time and guidance.



بسم الله الرحمن الرحيم

الجواب حامداومصليا

This is not a correct Mudaraba contract in Shariah.

N.B. Mudaraba is when one party invest his capital into a business venture with a working partner and he returns to the investor the principal and a pre-agreed share of the profit. Any loss should be borne by the investor and the working partner losses his work.

In your case, as there is no agreement of profit sharing in proportions and neither sharing of loss in the contract. This is similar to lending money for a fixed profit which is Haram. Hence, this contract is invalid.

The correct way in the Mudaraba contract is whatever profit is accrued you share the profits according to the agreed proportions I.e. 40% for one party and the other 60% etc.

When loss occurs from the business, the profits and then the investment capital will be deducted and the working partner will lose his work only unless he breached the contract with misconduct and negligence then he will be liable to pay back the capital.

In Mudaraba contract the working partner can invest into a business without the involvement of the investor unless it was mentioned at the time of the contract agreement.

As the working partner is regarded as a trustee he has that responsibility to invest the money in the best interest of the investors. Generally as a trustee if he has no fault of loss then he won’t be liable. However, if it was established that he has acted with misconduct and negligence then he will be liable for the whole money.

As your money was lost then Zakat is not liable.

المضاربة تفسد بأشياء منها إذا شرط لأحدهما من الربح ما يقطع الشركة نحو أن يجعل له دراهم مسماة مأة او أقل أو أكثر فسدت
(فتاوي قاضيخان ٣/١٦١)

وما هلك من مال المضاربة فهو من الربح دون رأس المال فإذا زاد الهالك علي الربح فلا ضمان علي المضارب لأنه أمين
(الدرالمختارمع ردالمحتار ٥/٦٥٦،سعيد )

وإذا هلك المال بعد وجوب الزكاة سقطت
(اللباب في شرح الكتاب )

And Allah knows best .

05 Jumadal Ula 1444/ 29 November 2022

Mufti
Answer last updated on:
1st December 2022
Answered by:
Ulamaa ID 04
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